The Motley Fool

A Top Stock to Buy in June

Stephanie Bedard-Chateauneuf: Air Canada

Air Canada (TSX:AC), Canada’s largest domestic and international airline, is my top stock for June.

Air Canada is one of the best performing stocks of the TSX so far this year, with a return exceeding 55%.

The airline reported a very good first quarter despite the continued grounding of its fleet of Boeing 737 Max aircraft. Results were boosted by an increased number of passengers and the recent acquisition of the Aeroplan loyalty program.

Air Canada earned an adjusted profit of $17 million or $0.06 per share in the quarter compared with an adjusted loss of $26 million or $0.10 per share a year ago.

Operating revenue rose to a first-quarter record of $4.45 billion compared with $4.07 billion in the same quarter a year earlier.

Analysts from Thomson Reuters had expected on average an adjusted loss of $0.18 per share and revenue of nearly $4.39 billion for the quarter.

What also helped to fuel the share price is a news that came out a few days ago stating that Air Canada is in exclusive negotiations to buy the company that owns Air Transat for about $520 million.

Earnings are expected to grow by 19% on average annually for the next five years. The stock’s five-year PEG is only 0.55, so Air Canada is very cheap relative to its high growth prospects.

Fool contributor Stephanie Bedard-Chateauneuf owns shares of Air Canada.

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!

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.