October is right around the corner, and it could be a busy month for the markets. We should have a clearer picture of what (if anything) is happening with NAFTA talks, recreational pot sales will commence, and there will also be some big companies reporting their earnings during the month.
Below are four stocks that I’d keep an eye on during the month that could be great buys.
Aphria (TSX:APH) is at the top of the list for a couple of reasons. The first is that as one of the top pot stocks on the TSX, it will be impacted heavily marijuana legalization, which is slated for October 17. While I’m not optimistic that we’ll see much in the way of pot sales right out of the gate, over the long term that will certainly be a different story.
Secondly, I wouldn’t be surprised to see some sort of announcement from the company regarding edibles and finding a dance partner of its own. We’ve seen deals and rumours relating to big beverage makers and cannabis stocks hooking up, but nothing solid relating to Aphria just yet, and it’s likely only a matter of time before we do.
Aphria is also expected to report its first-quarter earnings in October, and a good result could send the stock soaring. It’ll be interesting to see whether the low-cost producer will be able to return to the black after a disappointing Q4 that saw it record a net loss of $5 million.
Corus Entertainment (TSX:CJR.B) is finally showing signs of stability, and in September it was able to generate some momentum as it looked to have finally found a bottom. Where the stock goes from here depends a lot on how the company’s next earnings look. In Q3, Corus disappointed investors yet again with an underperforming result and a big loss.
There’s still hope that Corus can turn things back around, but that has to start with a good fourth quarter. In addition to profits, investors will be looking to see whether the company is able to find a way to grow sales — something that’s proven to be a big challenge in recent quarters.
Canadian Pacific Railway (TSX:CP)(NYSE:CP) and Canadian National Railway (TSX:CNR)(NYSE:CNI) both are expected to report their earnings in October, and they could be good indicators of where the economy is headed. It’s no coincidence that both CNR and CP have been doing well this year alongside the economy, with the stocks up 10% and 19%, respectively.
With a lot of finished goods and raw materials transported by these two railway operators, an increase in volumes is a welcome sign that the economy is continuing to chug along at a strong rate, while the opposite could indicate that things are slowing down. NAFTA-related issues could impact how much is shipped in and around Canada, as companies affected by tariffs could scale back production.
It will be interesting to see how well CP and CNR do in terms of financial performance and to see the mix of what’s driving the results, as it could offer hints as to which sectors and industries might be doing better than others.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor David Jagielski owns shares of CORUS ENTERTAINMENT INC., CL.B, NV. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.