The stock market is a platform for wealth creation. However, most stocks fail to live up to expectations. Others take far longer than expected to deliver results. For investors seeking growth, I believe these three stocks offer the best prospects over the next decade.
While Elon Musk’s SpaceX and Richard Branson’s space venture get all the attention, Maxar Technologies (TSX:MAXR)(NYSE:MAXR) deserves a closer look. The spacetech firm has been slowly building a robust platform for years. However, the management team borrowed too much capital to fund acquisitions.
Even before the stock market crashed, Maxar’s debt burden was starting to look precarious. The stock was hammered down 93% between 2015 and 2019. Billions in shareholder wealth was incinerated.
However, now the company has redefined itself. Some assets have been spun off to lower the debt burden. The company has also redomiciled in the U.S. to gain access to government contracts. Veteran investor Michael Burry has made a hefty bet on the company’s recovery.
Considering the limitless potential of the industry and the stock’s oversold valuation, Maxar stock could be worth a fortune in 10 years. The stock has doubled over the past three months alone.
However, the government has stepped in and saved the firm from bankruptcy twice before. After 9/11 and the 2008 financial crisis, Air Canada was bailed out with taxpayer cash. That’s because the airline is systemically important and supports plenty of jobs. Those factors remain true even in the current crisis.
If Air Canada can avoid bankruptcy in 2020, it could spend the next 10 years generating phenomenal wealth for shareholders. The stock returned an astounding 3,162% between 2009 and early-2020. There’s no reason why it can’t deliver similar returns over the next 10 years.
A government bailout and swift recovery in air traffic is far from certain right now. However, for investors willing to make a speculative bet, there’s no better candidate than Air Canada.
While stock market volatility is disastrous for most people, private equity firms thrive in this environment. Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) will inevitably face losses this year and perhaps next year as well. Some clients might pull money from their various funds. Meanwhile, the value of their holdings could decline.
However, the economic downturn allows Brookfield to snap up great assets at bargain prices. Deals over the next few months could bolster the company’s portfolio. Over the long term, this stock should deliver steady returns.
BAM stock was knocked down 72% in the previous crisis. However, from 2009 to 2020, the stock delivered a whopping 821% return. That’s nine-fold in 11 years, without considering the impact of dividends along the way. Similarly, the stock is now down 24% from February.
The stock could be worth 10 times as much before 2030. That’s assuming the Brookfield team lives up to expectations and strikes great deals in the year ahead.
$10,000 invested evenly in Air Canada, Maxar, and Brookfield Asset Management could be worth a fortune in 10 years.
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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 Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends BROOKFIELD ASSET MANAGEMENT INC. CL.A LV and MAXAR TECHNOLOGIES LTD.