The recent global stock market rout has once again struck fear into the hearts of younger investors. My generation, the millennials, came of age in the wake of the 2007-2008 financial crisis. In some ways, this was tragic, as many young investors witnessed the fallout from the financial crisis and grew pessimistic and suspicious of the stock market and the investing world in general.
This resulted in many millennials missing out on one of the longest bull markets in history for stocks in the U.S. and Canada. The S&P/TSX Index has dropped 4.6% in 2018 as of close on February 16. We are now in a period in which millennials should be scoping for bargains that could result in big gains in the long term. Let’s take a look at four stocks younger investors should target as they gear up for the long haul.
BlackBerry Ltd. (TSX:BB)(NYSE:BB)
BlackBerry is a Waterloo-based designer, manufacturer, and marketer of wireless solutions for the mobile communications market. BlackBerry stock has dropped 8.8% month over month but is still up 7.9% in 2018 thus far. In its 2017 third-quarter results, BlackBerry posted record software and services revenue of $199 million, which represented 85% of its total revenue.
BlackBerry should benefit in the long term from its focus on cybersecurity and autonomous vehicle software. Global spending on cybersecurity is expected to grow by a compound annual growth rate of 10% or more into the 2020s. The autonomous vehicle industry is projected to grow at a CAGR of almost 40% over the next decade.
Toronto-Dominion Bank (TSX:TD)(NYSE:TD)
TD Bank is the second-largest Canadian bank by market cap. Canadian banks have proven to be monster profit generators for the long term. TD Bank stock has dropped 1.5% in 2018 but is up 4.4% year over year.
In 2017, TD Bank saw adjusted earnings per share rise to $5.54 from $4.87 in 2016 and adjusted net income climb to $10.58 billion compared to $9.29 billion in the prior year. TD Bank has the largest U.S. footprint of any Canadian bank, and leadership expects U.S. tax reform to have a positive impact on earnings going forward. The bank is expected to release its first-quarter results on March 1.
Aurora Cannabis Inc. (TSX:ACB)
Aurora recently became the largest producer in Canada with the pricey acquisition of CanniMed Therapeutics Inc. Aurora stock has climbed 5.5% in 2018 and has increased 310% over a six-month span. Recreational cannabis legalization was pushed back to August 2018 in Canada and may not ramp up until September 2018. The hiccups in the industry give young investors the opportunity to buy into a multi-billion-dollar industry at what is still an early stage.
Kinaxis Inc. (TSX:KXS)
Kinaxis is an Ottawa-based company that provides supply chain solutions to its clients. Kinaxis stock has climbed 8.5% in 2018 and was given a big boost after Toyota Motor Corp. announced it had chosen the company to manage its supply chain software. The company is at the forefront of a growing industry and has even dipped into AI research to improve its modeling. Kinaxis is expected to release its 2017 fourth-quarter and full-year results on March 1.
