2 Stocks Professional Investors Are Buying Right Now

Buy stocks as the market crash subsides. Long-term investors should probably add quality stocks such as Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) to their list.

| More on:
Business people shaking hands

Image source: Getty Images

What do savvy professional investors do when markets crash? They buy stocks. In fact, the best investors buy stocks more aggressively when prices are falling and economic conditions worsen than at any other time. 

There’s a simple reason for this: professionals are looking for bargains. When the stock market is in a state of shock, investors panic and sell their holdings for less than they’re actually worth. This creates an opportunity for patient investors with a long-term outlook and cash on hand. 

With that in mind, here are three stocks institutional investors, hedge funds, and family offices have been buying. You should certainly add them to your list. 

Restaurant Brands

Bill Ackman’s Pershing Square Capital, a hedge fund, made an incredible 100-fold return on a bet against the stock market this month. The investment firm turned US$27 million into US$2.6 billion in a mere two weeks. 

Pershing deployed much of that capital into Canadian quick-service food giant Restaurant Brands (TSX:QSR)(NYSE:QSR). Pershing Square Capital now owns a double-digit percentage stake in the company and is one of its largest shareholders. The other major shareholder is Warren Buffett. 

The owner of Tim Hortons, Burger King, and Popeyes could deploy its capital in a major acquisition this year. That could further bolster the portfolio. Meanwhile, its stock is down 26.3% over the past month. It’s currently trading at 31 times earnings and offers a 4.8% dividend yield.   

Value investors looking for a robust brand with great fundamentals should certainly add this to their list. 


Banks like CIBC (TSX:CM)(NYSE:CM) have obviously been squeezed during this crisis. With rising unemployment, mortgage and credit card delinquency ratios could spike substantially over the next few months. Meanwhile, commercial loans and small businesses face even larger cash flow hurdles. 

Unsurprisingly, Canadian banks have collectively lost billions of dollars in value over the past month. If the residential property market collapses, there could be more downside left. 

However, CIBC’s upper management doesn’t seem to be worried. The company’s chief executive officer and most senior executives have decided to buy the stock during this market crash. Insider activity is clearly a green flag for the company’s valuation. 

My Fool colleague Nelson Smith took a closer look and figured out that CIBC was actually better placed than most of its rivals to weather this storm. The bank is less exposed to Canada’s residential mortgage market and derived nearly half of its revenue from overseas. 

CIBC’s shares currently offer a 7% dividend yield, are trading at 7.5 times last year’s earnings, and are nearly on par with book value per share. This could be a once-in-a-lifetime opportunity to buy stocks this cheaply. 

Dumping real estate

With not a single soul in bars, restaurants, hotels, and malls, commercial real estate faces a deep crisis. Mortgage investment companies and real estate investment trusts are now in a tight spot. 

Legendary investor Carl Icahn has made a bet against the commercial property market this year. He sees the coronavirus-driven shutdown as a cataclysmic event for global commercial real estate. Investors should probably take a closer look at their own REITs. Especially the ones focused on commercial real estate. 

Too much debt and a sudden loss of income is never a good recipe to buy stocks. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC. Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned.

More on Investing

calculate and analyze stock
Bank Stocks

Better Than Banks: Why goeasy Is 1 of the Best Stocks to Buy Now

Bank stocks are typically excellent long-term investments, but right now, this growth stock is so cheap that it's one of…

Read more »

Female hand holding piggy bank. Save money and financial investment
Dividend Stocks

RRSP Savings: 2 Top TSX Dividend Stocks to Build Retirement Wealth

Here's how investors can turn small initial RRSP contributions into substantial savings for retirement.

Read more »

question marks written reminders tickets

Is Restaurant Brands International (TSX:QSR) Stock a Good Value Pick?

Consumer discretionary stocks like QSR could be good buys right now.

Read more »

Man holding magnifying glass over a document
Dividend Stocks

2 BMO ETFs Are Less Volatile Than BMO Stock

Two ETFs of a big bank are more suitable for risk-averse or ultra-conservative investors than its stock.

Read more »

gold stocks gold mining
Metals and Mining Stocks

3 Discounted Gold Stocks to Buy Now

Gold stocks, especially at their current discounted state, can be promising short-term investments, since they can reverse course anytime due…

Read more »

Gold bullion on a chart
Metals and Mining Stocks

Why TSX Gold Stocks Are Falling in May 2022

Will TSX gold stocks shine in the second half of 2022?

Read more »

grow money, wealth build

2 Profitable Growth Companies I’d Buy Right Now

Alimentation Couche-Tard (TSX:ATD) and Enbridge (TSX:ENB)(NYSE:ENB) stocks are cheap earnings growers that long-term investors should look to buy.

Read more »

Happy Retirement” on a road

Retirement Investors: 2 Oversold Stocks With Great Dividend Growth

Stocks with strong track records of dividend growth deserve to be on your retirement radar.

Read more »