It’s still far too early to tell how long this market crash will last, but one thing’s for sure: investors shouldn’t be missing out on the deals out there right now. While it may be worrying that stocks will continue to head lower, history has taught us that the markets will recover from any setback. If you’ve got at least three more investing years left to go, buying today could earn significant returns for you later on. And if you hold even longer, you could even make yourself a millionaire.
Two stocks that can help get you there: Air Canada (TSX:AC)(TSX:AC.B) and BlackBerry (TSX:BB)(NYSE:BB). The market crash has made them both very cheap buys today.
Why Air Canada is a bargain that could more than just double or triple
Shares of Air Canada are trading at less than three times their earnings. And while their earnings will definitely decline this year, they’ll also recover once the coronavirus pandemic ends. Sure, it may take a year, perhaps even two or more, but when it does, there’s lots of potential for the stock to climb in value. Here’s how Air Canada’s price-to-earnings (P/E) ratio has looked this past year:
AC PE Ratio data by YCharts.
The stock’s 52-week high is $52.71, and while it may not get back to that level anytime soon, odds are that Air Canada could soar past it in a few years’ time when the market crash is long over and people are looking to make up for lost time. After all, 2020 is shaping up to be a lost year, and there could be excess demand in a few years for travel, as people take vacations they had to cancel this year.
It wouldn’t be surprising for Air Canada’s stock to even hit $60 within the next three to five years, more than quadrupling from Friday’s closing price of $14.55. And the longer you hold on to Air Canada, the more potential there is for your investment to grow over time as population growth will contribute to even more revenue growth down the road. Buying shares of Air Canada during this market crash may be one of the best decisions you make as an investor.
BlackBerry could do just as well once the market crash is over
Shares of BlackBerry are down as a result of the market crash, and they fell again this past week after the company released its fourth-quarter results. The numbers, unfortunately, weren’t good enough to make all investors happy. Even though the company’s per-share earnings were better than analyst expectations, its revenue number wasn’t good enough.
But what’s important is that the company keeps making progress, especially in artificial intelligence (AI). Revenue from Cylance, which is the AI company BlackBerry acquired in 2018, grew to US$43 million in Q4 from US$40 million in the third quarter. That’s a quarter-over-quarter increase of 7.5%.
I plan to hang on to BlackBerry stock during this market crash and over the long term because one of two things will likely happen. The first is that the company will continue making slow progress to the point where investors realize its value and the stock starts to take off. The second is that it will keep dropping, and a big tech company buys out BlackBerry for its capabilities, and the stock will soar as well.
Either way, BlackBerry is a solid business, and it may take multiple years to realize its potential. But this is another stock that can triple or quadruple your returns over the long term. And along with Air Canada, these stocks can put you on track to earning significant returns as a result of buying during this market crash.
