3 Stocks to Watch This Month

Saputo Inc. (TSX:SAP), Dollarama Inc. (TSX:DOL) and Transcontinental Inc. Class A (TSX:TCL.A) all have earnings results in the next month that investors should be watching closely.

With earnings reports just around the corner, Canadians should be keeping a close eye on stocks that are due for a bump or a dive. Whether you’re looking to see a share rise or take advantage of a dip, looking at these stocks could be your chance to sincerely increase the bottom line of your TFSA or RRSP.

Saputo Inc. (TSX: SAP) is a stock linked to the consumer, offering a defensive option during even the slowest of growth periods. The dairy giant has produced solid economic profits in the last decade, averaging 14% adjusted returns on invested capital.

The company is now in the process of cost saving initiatives that have added up to $20 million in annual savings, or 2% of operating income. Analysts remain optimistic about this stock, with its P/E ratio of 23.2, much higher than the industry average. In fact, in the next 12 months, analysts predict the stock to rise to $52 per share from $45 per share at writing.

When its earnings release comes out on June 6, investors should be looking for continued costs savings and growth in sales and revenue. If these numbers are achieved, expect the share price to continue its upward trend.

Dollarama Inc. (TSX: DOL) may be indeed a powerhouse, but many analysts believe that it hit its peak in January of 2018, when the company reached about $56 per share. Since then, the stock dropped with the markets back in December, climbing to where it is now at about $44 per share.

After some disappointing quarters, the company is on the rise again after the last quarter showed some surprisingly strong growth and an increase in its dividend of 10%. The problem is, that growth came with the opening of 33 new stores and the company isn’t planning to open many more. Once those openings halt, revenue may be struck rather hard.

So if results are strong on June 13 — and analysts aren’t too sure they will be — this might be more of a buy and quick sell stock. While the company still contends that it has a lot more growth to give, the proof will have to be in continued strong earnings results. For right now, investors just aren’t ready to give up on this growth stock.

Transcontinental Inc. Class A (TSX: TCL.A) is the stock I’m most looking forward to this month on June 6. The company has fallen hard since August 2018, from around $32 per share to $14.45 per share at writing.

Most of the slump is due to market performance, but some of it is due to the company’s organizational restructuring. The company is selling assets and acquiring others to create a flexible packaging business. This type of transition can take awhile, but it doesn’t mean analysts don’t foresee some growth.

In fact, in the next 12 months alone, analysts expect growth of between $22 and $32 per share, which equates to 121% in share growth. So while the company is continuing to diversify from just printing to both printing and packaging, expect some slumping results. But if you’re patient, this stock could be a huge long-term winner.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. Saputo is a recommendation of Stock Advisor Canada.

More on Investing

Tractor spraying a field of wheat with fertilizer
Dividend Stocks

B.C.’s Premier-Elect Wants to Double Gas Output: This Vancouver Stock Sells the Equipment

Finning could benefit from more energy investment, with equipment servicing giving shareholders a business beyond the next big order.

Read more »

Real estate investment concept with person pointing on growth graph and coin stacking to get profit from property
Stocks for Beginners

The Home Buyers’ Plan Limit is $60,000, and This Mortgage Lender Could Benefit

The HBP can strengthen a down payment, while EQB offers investors a different way to participate in Canadian housing.

Read more »

A worker gives a business presentation.
Tech Stocks

How Inflation Quietly Raises Your Retirement Target

Get insights into inflation and its effects on your savings. Discover what influences inflation and how to manage it.

Read more »

dividends can compound over time
Energy Stocks

This Power Stock Raised Its Dividend 8% This Year, yet the Cash Behind it Deserves a Look

TransAlta's small dividend leaves most of its cash available for the power business and its next growth opportunities.

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

Delaying CPP to 70: Is the Bigger Payout Worth the Wait?

Understand CPP and how the timing of your payout affects your retirement income. Explore the best age to start collecting.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Dividends in a TFSA vs. a Non-Registered Account: What’s the Difference?

Explore the advantages of TFSA and understand how to invest wisely to minimize your dividend tax load in Canada.

Read more »

arrows hit bullseye on target
Dividend Stocks

Retirement Target Up From $1.54 Million to $1.7 Million: What’s Behind the Jump?

Is $1.7 million your Retirement Target? Learn how inflation is driving changes in retirement planning for Canadians.

Read more »

ETF is short for exchange traded fund, a popular investment choice for Canadians
Stocks for Beginners

Freelance Income in Canada: A Beginner’s Tax Guide

Once emergency and tax savings are secure, invest regularly for the long term using TFSA and RRSP to save taxes.

Read more »