You might be tired of the COVID-19 pandemic, but let me tell you: the virus isn’t. Unfortunately for Canadians, it looks like we still could have months or even years of the virus. Wave after wave is expected, with some health officials predicting no end until as late as 2024!
So for investors, it’s a time when you should be looking over your portfolio with a fine-toothed comb. What TSX stocks could continue to drop during the pandemic? What stocks are defensive? What other stocks could even take advantage of the pandemic?
The work-from-home economy will continue for as long as this pandemic lasts. Then after, the world will likely be changed. People will continue to work from home, and so TSX stocks that could continue to climb are important to add to your portfolio. Here are three options to consider.
When you hear about BlackBerry Ltd. (TSX:BB)(NYSE:BB) these days, it’s usually tied to vehicle software. But the main function of BlackBerry these days is its focus on cybersecurity. Businesses are able to use BlackBerry to protect their data, both while in the office and at home. Whether that business is a food truck or a hedge fund, you’ll need security.
While revenue was down, much of this was due to a one-time good will impairment charge. Revenue still came in at $214 million for the quarter, with recurring software product revenue reaching over 90%. Shares today have remained around $6.50 per share over the last few months. But earnings are around the corner, and there should be a huge boost in revenue from businesses signing on to BlackBerry now and in the coming months as more work becomes remote.
Another business taking advantage of a work-from-home economy is Kinaxis Inc. (TSX:KXS). This company provides supply chain management software for mainly enterprise businesses around the world. Each business signs on for years in most cases, and there isn’t one business that takes more than 5% of its revenue. As more businesses sign on to this essential service, Kinaxis should continue to soar to all-time highs.
Its recent earnings report showed just how strong this company is. Total revenue was up 45%, with software as a service (SaaS) revenue up 26% for the quarter. There’s no doubt these numbers will remain strong. The company has contracts to last years, and now more clients than ever before. That clientele should only continue to climb. Shares are up 160% since the crash, and don’t show signs of stopping.
Finally, Enghouse Systems Ltd. (TSX:ENGH) is similar to Kinaxis in how it provides software for enterprise companies. So again, we see just how needed this industry has been with more people working from home. Businesses need companies that can make sure the company continues to run smoothly. Especially with employees potentially around the world in the future.
Many businesses have clearly seen the need for Enghouse. During its latest quarter, net income rose 63.9%. Adjusted EBITDA meanwhile was up a whopping 81.3%! The company has been using any cash on hand to acquire businesses, so investors can look for continued organic growth and growth through acquisition. Shares are up an incredible 114% since the crash, and continue to trade at all-time highs.
It can be a scary time for investing, but there are plenty of opportunities to be had. The work-from-home economy is here to stay. So looking at companies that take advantage of this new world is a pretty safe bet. Add a few of these companies to your watch list and you should see some stellar growth continue over the next few years and beyond.
For more great portfolio options, consider this next big hit.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry, BlackBerry, Enghouse Systems Ltd., and KINAXIS INC.