As an investor, you should always be on the lookout for stocks that outperform market expectations.
As of June 30, 2019, three unlikely names emerged as winning stocks. Ero (TSX: ERO), Bellus (TSX: BLU), and WestJet (TSX:WJA) weren’t expected to be on the list but these stocks surpassed all the others.
Surprise winner
Ero, a $1.83 billion base metals mining company, is one of the best performing stocks on the TSX. The stock became a winner thanks to the rising price of copper. Ero ended 2018 at $9.81 but is now trading at $21.52, a magnificent increase of 119.4%.
The price of copper spiked to a new high on March 1. Many thought the price wouldn’t hold because China, the world’s largest copper importer, reduced imports as a result of its trade war with the U.S.
An unexpected deal, however, came Ero’s way in late 2018. The company was granted a licence to begin production at a mine in Bahia, Brazil. The new deal meant an additional 7,000 tonnes of copper.
In the first six months of this year, Ero’s major feat was to produce more than 75% of the copper it produced in the whole of last year. This was also more than the total amount of copper produced in 2017. In 2019, Ero is projected to double the production of two years ago.
Health is wealth
Bellus is making waves in the healthcare sector. Shares of this $418.56 million clinical-stage biopharmaceutical company has soared by 174.5% at the end of June. In the next 12 months, analysts are forecasting another 88.7% increase from the current price of $2.65.
According to Bellus President and CEO Roberto Bellinis, the company made many important strides this year. He was referring to the biotech’s lead drug candidate, BLU-5937, which has been developed to treat refractory chronic cough.
Last July 30, Bellus announced the start of its clinical Phase 2 study for BLU-5937, when the first patient enrolled. The complete enrollment is expected by Q1 2020, with top line results expected by mid-year. BLU-5937 could be the blockbuster drug that will ensure Bellus’ future prominence.
Wings to fly
WestJet flapped its wings as it climbed by 72.5% from six months ago. The planned $5 billion acquisition of this airline company by Onex Corp. has boosted the stock’s value. But what’s even more interesting is WestJet’s better-than-expected Q2 2019 earnings.
The company was expected to take a big hit when Boeing’s 737 MAX jets were grounded. But WestJet reported a net profit of $44.3 million, compared to a $15.8 million net loss a year ago.
Despite the grounding of its thirteen 737 MAX jets, WestJet managed to re-accommodate most of its passengers on alternative flights.
The greater volume of domestic traffic in Swoop, its budget airline, as well as its regional carrier, WestJet Link, boosted the company’s load factor by 3.3 basis points to 87.2% in Q2.
There was a 4.5% increase in the average fare per passenger per mile, and a 6.8% increase in traffic. Operating expenses per available seat mile rose by 4%, as the rest of the WestJet fleet was not as fuel-efficient as the 737 MAX jets had been.
Best year-end finish
ERO, Bellus, and Westjet have been riding a strong wave in 2019. If the streak continues, you could be looking at the respective stocks’ best year-end finish.
