The Motley Fool

3 Stocks That Could Be Breaking Out!

Image source: Getty Images

It’s been a good start to the year for many companies on the TSX, and the three stocks listed below have been turning things around after a troubling 2018. They’ve increased in value recently and still have the potential to rise even further.

Stars Group (TSX:TSG)(NASDAQ:TSGI) has climbed more than 9% in just the past month after another strong earnings report has generated some bullishness around the stock. In the past year, its share price has declined by more than 25% after a bad quarter sent the stock reeling. And with the stock showing some recent momentum, it could be ready to soar.

Stars Group is a bargain, trading at just over its book value. Some investors might be concerned about its lack of profitability, but in three of the past five quarters, the company has been able to net a profit. And it’s been non-operating expenses that have brought Stars Group into the red, as it has had no trouble generating a profit from its operations.

With the company being busy on acquisitions and growing its brand, it’s understandable that it would have incurred some big expense along the way. However, Stars Group has significant growth potential and it’s a stock that could see tremendous upside this year.

Crescent Point (TSX:CPG)(NYSE:CPG) has been an even hotter stock, soaring 23% in just one month. The company is coming off a difficult quarter, where it wrote down $2.7 billion in assets and had a significant net loss from the prior year.

However, with the stock trading around all-time lows and oil prices finding a lot of momentum lately, investors have likely spotted a huge opportunity to pick up the stock at a significant discount. Crescent Point is trading nowhere near its book value and is a very cheap buy for investors that are not risk-averse. The markets have not been very bullish on oil and gas in recent years, but there are signs that things are starting to pick up and it could be an opportune time to buy, especially if the momentum in the industry continues.

Dollarama (TSX:DOL) has had a challenging year as well, as low growth rates have resulted in the stock falling out of favour with many investors. The share price has risen 18% since the start of the year, but at less than $40, it’s still nowhere near where it was last year when the stock reached highs of well over $50.

In its most recent quarter, Dollarama still struggled with growth as same-store sales were only up 2.6% year over year. However, with the company still promising more new stores and with an attractive price-to-earnings ratio of around 23, it’s not hard to see why investors may have decided to take a chance on the stock. With online sales potentially giving the company boost this coming year, Dollarama may have unlocked a yet another opportunity to grow. And in the process, it could also provide the company with even stronger margins.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor David Jagielski owns shares of The Stars Group.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.