As is normal with any market crash, a short-term catastrophe has created a tonne of uncertainty, which has led to fear throughout the world and caused the panic selling of numerous stocks. Although the short-term fear and uncertainty is justified, it still creates opportunities for those investors who are willing to make the long-term investment in top TSX stocks.
Initially when markets crash, a lot of high-quality stocks fall at levels similar to less-appealing stocks. This makes those companies much more attractive, but the discounts don’t last long.
This makes acting quickly and decisively paramount in these situations. There are specific stocks that investors like and have higher demand for their shares. So, the longer you wait, it’s likely the discount in the shares will erode.
In market crashes like this one, these investor favourites usually consist of utilities or real estate stocks. Those stocks are safe businesses that investors can count on in a recession.
The top TSX stock
One stock that has also held up better than the broader market recently is CargoJet (TSX:CJT). CargoJet isn’t a utility or real estate company; it is a cargo airline responsible mainly for overnight time-sensitive products.
The company’s position in Canada’s marketplace is dominant. It’s responsible for shipping more than 90% of overnight time-sensitive products.
CargoJet is thriving in this environment
With the closure of many stores across the country, Canadians have turned to online shopping to get the products they need. That demand and those products need to be shipped by someone, and that’s where CargoJet comes in. And because CargoJet has such a large share of a rapidly growing market, the company is one of the top TSX stocks you can buy.
The major increase in only shopping has meant that CargoJet has seen a major increase to its demand in recent weeks and could potentially see more for longer, depending how things go with store closures.
The increased volume in online shopping has been quite apparent already. Amazon even announced it was hiring a whopping 100,000 new workers to deal with all the demand.
Furthermore, CargoJet has announced it may even need to start daytime flights soon to meet demand. That would be in addition to the numerous overnight flights it already completes on a daily basis.
Top growth stock opportunity
An investment is CargoJet is essentially an investment in the growing online shopping industry, which is why it’s a top TSX stock.
Even before most retail stores were shutdown, CargoJet’s growth rate was exceptional. It managed to more than double its revenue from 2014 to 2018 and continues to see strong growth.
And whatever happens through this, online shopping will only continue to get more popular. When comparing Canada’s e-commerce as a percentage of retail sales, it’s clear Canada is still extremely underpenetrated, especially in comparison to a number of our peers.
As of 2018, just 5% of retail sales in Canada were made online. This creates a major runway for growth over the next few years.
So, even though the discount isn’t that great anymore, it is still a major opportunity, given the stock was more than 15% higher than Monday’s closing price just one month ago.
At this point, CargoJet is ready for a rally. All it needs is stronger sentiment from the market in the short run. It seems like that sentiment may have returned on Monday, when CargoJet gained more than 10%, as the TSX fell roughly 5%.
The company is the perfect growth stock to add to your diversified portfolio. And even if that rally is short-lived or the stock doesn’t rally in the short term, it shouldn’t matter to investors. Because a long-term investment at these prices still makes it one of the top TSX stocks to buy today.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and CARGOJET INC.