The S&P/TSX Composite Index was up over 20 points in early afternoon trading on September 11. If it holds this gain it will break a seven-day losing streak. Fall is now bearing down on investors after what has been an eventful summer. Economic news was mixed in Canada with GDP still posting gains in line with projections, but August surprised with a poor jobs report.
The two stocks we will cover today have had a difficult 2018. Both offer attractive income but have stumbled well into double-digit losses for the year. Why should investors consider these options in the fall? Let’s dive in.
Maxar Technologies is an integrated space and geospatial intelligence company that services the private and public sector. Shares of Maxar have dropped 45.6% in 2018 so far. However, the stock has climbed 12.1% over the past week. Back in August, I’d discussed why Maxar was a potential buy-low candidate.
Maxar stock was the victim of yet another short-selling campaign that took aim at the stability of its current dividend. On August 24, the company provided a comprehensive response to the early report. It reiterated its growth in several segments including Imagery and Services and a return to growth in Space Systems.
The company released its second-quarter results back on July 31. For the first six months of 2018, net earnings were $12.4 million compared to $23.6 million in the prior year. However, year-to-date adjusted earnings have climbed to $153.1 million over $69 million in the first two quarters of 2017. Adjusted EBITDA has also increased to $358.6 million compared to $129.1 million in the previous year.
Maxar declared a quarterly dividend of $0.37 per share, which represents a 3.3% dividend yield. It is not too late for investors to buy the dip before the weather cools.
Cineplex stock began its difficult period in mid-2017. The North American box office posted its worst summer in over two decades last year. Shares of Cineplex have dropped 14.4% in 2018, but there are far more positives to glean in the movie business. The stock is up 8% over the last three months.
There have been four films this year that have surpassed the $1 billion mark, and one that exceeded $2 billion. Those included Incredibles 2, Jurassic World: Fallen Kingdom, Black Panther, and, now the fourth-highest grossing movie of all time, Avengers: Infinity War. The second-quarter report for Cineplex reflected box office success in North America.
Total revenues rose 12.4% year over year to $409.1 million in the second quarter. Attendance also climbed 5% to 17.3 million, while adjusted EBITDA surged 78.3% to $67.8 million. In the second quarter, the board of directors also announced a 3.6% increase to its monthly dividend to $0.145 per share. This represents a 5.3% dividend yield. With the stock still down 16% year over year, Cineplex comes at a solid price before the fall season.
When you buy heavily cyclical stocks at low prices… and then hold the shares until the cycle reaches its peak… you can make a very healthy profit.
Every investor knows that. But many struggle to identify the best opportunities.
Except The Motley Fool may have a plan to solve that problem! Our in-house analyst team has poured thousands of hours into their proprietary research – and this is the result.
Our top advisor Iain Butler has just identified his #1 stock to buy in 2018 (and beyond).
The last time this stock went from the low point of its cycle to the peak… shares shot from $12 to $40 inside of 4 years. That’s an 300%-plus return. And if you missed out on that ride, today might just be your second chance.
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. Maxar is a recommendation of Stock Advisor Canada.