Investing in stocks that are on the way down can be risky, because sometimes it may not be certain when the bottom has been reached. Although it may be tempting to buy a stock that appears to be a deal, trading at a 52-week low, there’s no guarantee that it will start to magically turn things around.
Investing in stocks that have been ascending at a rapid pace can be dangerous as well, since the potential upside might be limited. However, with stocks on the rise, at least there is positive news or momentum that could lead the stock even higher.
Below are four stocks that have seen big increases in the past three months and that could still be great buys today.
Bombardier, Inc. (TSX: BBD.B) has seen its share price rise over 25% in just the past three months. The stock has been on the rise since the company announced it was partnering with Airbus to produce its CSeries jets. It wasn’t a good deal, and it still isn’t, but it did help push the stock’s value up.
Demand for the CSeries jets has appeared to have increased since the deal was struck, and that has made investors more bullish on the stock. If the orders keep coming in, we could see the stock continue to climb in price.
Baytex Energy Corp. (TSX: BTE)(NYSE: BTE) has been a big benefactor of rising oil prices as the share price, which, year to date, is down more than 30%, has risen over 40% in the past three months. The company posted a strong Q3 back in November, which also helped give the share price a boost.
With OPEC recently agreeing to extend production cuts until the end of 2018, we could see oil prices continue to rise, and that could mean Baytex’s share price might have even more room to grow.
Canada Goose Holdings Inc. (TSX: GOOS)(NYSE: GOOS) had a strong quarter in Q2. The company raised its net income 85%, and the guidance for 2018 was raised as well. The news prompted the stock to take off, and in the past three months the share price has risen more than 50% and is trading near all-time highs.
The danger with Canada Goose is that the stock has a lot of expectations priced in, and if the company falls short, it could be due for a big correction. However, if Canada Goose is able to continue to build on its strong results, then the share price could still have a lot of upside left.
Dollarama Inc. (TSX: DOL) has been almost unstoppable this year with year-to-date returns of more than 56%. The company has seen significant growth this year, and as housing and other costs continue to rise, dollar stores will likely continue to grow in popularity.
Dollarama has an appealing low-cost business model that allows it more flexibility in deciding which products it chooses to carry, as opposed to conventional retailers and department stores that might feel the need to stock certain brands. Dollarama can simply opt for the cheapest option, which will help to ensure that it maximizes its potential profit.
