Industrial stocks have long held a reputation for cash intensity. While it’s true that many industrial stocks have annual capital expenditure budgets of $1 billion or more, that doesn’t mean there isn’t money to be made.
There are bargains to be had, especially on the lower end of the market. The following list includes low-priced shares with substantial upside in 2019 and beyond.
Bombardier, Inc. (TSX: BBD.B)
Bombardier is one of the most controversial stocks on the TSX. With shares down to just $2.85 each, this once renowned company is still trying to figure out its future. Since 2005, shares have returned roughly 0%.
In 2016, shares actually bottomed at around $0.80 apiece. Bankruptcy rumors swirled aggressively. Eventually, the company received support from the Canadian government and offloaded a majority interest in its troubled CSeries program.
Can the company ever turn things around? Fool contributor Andrew Walker makes a good case that shares may bounce back in 2019 given rock-bottom sentiment. He cautions investors to be careful, however, as “Bombardier has an unfortunate tendency to disappoint.”
Ballard Power Systems Inc (TSX: BLDP)(NYSE:BLDP)
Ballard made my Top 3 Small-Cap Stocks for 2019 list for good reason.
By designing and manufacturing battery systems for renewable energy technologies, Ballard is well positioned to take advantage of the shift to green energy. From wind farms and solar applications to electric vehicles and distributed grid infrastructure, the company has plenty of ways to benefit.
Notably, auto manufacturers will be dedicating billions of dollars to batteries and fuel cells, both of which Ballard specializes in. Daimler AG recently announced that it will purchase $23 billion worth of battery cells by 2030, while Hyundai will spend $7 billion to jumpstart its portfolio of clean fuel vehicles.
Tesla Inc recently purchased competitor Maxwell Technologies Inc., so buyout speculation may be on its way for this high-growth stock.
Uranium Participation Corp (TSX:U)
This is perhaps the greatest pick on this list when it comes to upside potential and downside protection.
Uranium Participation Corp simply buys uranium and stores it, giving investors direct exposure to swings in uranium prices. The company keeps its headcount and overhead low in order to invest more than 90% of its operating budget into uranium. Uranium prices have been depressed in recent years following the Fukushima disaster, but conditions are finally signaling a resurgence.
“In the past, uranium was often sold on long-term contracts,” I wrote recently. “Those contracts haven’t been renewed due to regulatory uncertainty, so a lot of money (i.e., potential demand) remains on the sidelines.”
Uranium Participation Corp is a speculative bet, but with supply and demand drivers looking favourable over the next few years, shares could provide a nice level of diversification and upside to your portfolio.
