The coronavirus pandemic came out of nowhere, and a lot of TSX stocks have been hit badly. Naturally, though, others operating in industries that have been deemed essential are seeing a significant increase to business.
Companies like Netflix have made numerous headlines about the increase in usage. Given the stay-at-home orders across most of the world, businesses like these have seen a natural increase in sales.
And though some of the increase to this business will only be temporary, the best companies will use this opportunity to improve the relationship with their customers. So even after this ends, they can retain those sales and use it to continue to grow the business.
E-commerce TSX stock
Shopify provides a platform for businesses to set up an online marketplace easily. It’s extremely popular because it handles much of the necessary functions of online businesses, such as payments and shipping.
Already, Shopify has been a top growth stock in the last few years. The company continues to see more and more merchants look to e-commerce to expand their sales.
However, with many stores forced to shut down, those that have been slow to adopt this strategy have been left with no choice.
This no doubt will provide a big boost to business for Shopify, especially over the long run, as most of these merchants will likely keep operating online following the shutdowns.
Not surprisingly, the stock has already rallied by roughly 60% in the last month. However, if the shutdown remains in place for longer than expected, look for Shopify to be one of the top-performing stocks for a while.
Overnight delivery TSX stock
Just as Shopify sees a big increase in demand for its services with the rise in online shopping, Cargojet is positively impacted by this as well.
An investment in Cargojet has always been a long-term play against the growing e-commerce industry — and this rapid acceleration from consumers is sending demand for Cargojet’s services through the roof.
At the same time, one of the company’s most significant expenses, fuel, has come down considerably in price, putting Cargojet in an opportunistic position going forward.
Because it has more than 90% of the market for overnight deliveries in Canada, it may be one of the highest impacted businesses today.
Although the top TSX stock initially sold off, it has since rallied back considerably. The stock’s now trading just off its all-time highs. So if there’s another pullback, I’d use the opportunity to buy some shares.
Sometimes stocks do well not because the business gets a boost, but because the demand for their shares go up. This is what we see out of many of the defensive TSX stocks.
Fortis is a different investment than Cargojet or Shopify, as the primary purpose in it is for defence, not major growth. Investors buy this stock to help add stability to their portfolio and protect their hard-earned capital — and receive a stable dividend at the same time.
It’s essential to have a balance of both growth and defence, to maximize your long-term performance.
It’s natural to only consider the major upside you can make in top growth stocks like Shopify and Cargojet.
But overdoing it and buying those stocks can leave your portfolio highly exposed. And that’s what you want to avoid, especially in these uncertain times where another big stock market crash is not out of the question.
These are three of the top-performing stocks in today’s environment. All three are top business capable of maximizing shareholder returns over the long run. So if you think this economic environment is likely to last, you may want to consider adding these top TSX 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.
Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. David Gardner owns shares of Netflix. Tom Gardner owns shares of Netflix and Shopify. The Motley Fool owns shares of and recommends CARGOJET INC., Netflix, Shopify, and Shopify.