Some have described the ongoing coronavirus outbreak as a “once-in-a-century crisis,” while many termed it the “black swan.” Irrespective of the narrative, the pandemic has indeed gobbled years of the global economic growth. However, some companies have significantly benefited from the pandemic and accelerated in the last few months. Let’s take a look at three such top Canadian stocks.
Shopify (TSX:SHOP)(NYSE:SHOP) is undoubtedly one of the biggest winners of the coronavirus crisis. The tech giant witnessed a huge demand surge for its platform amid travel restrictions and lockdowns. Its revenue growth almost doubled in the second quarter compared to the same period last year.
This financial growth was very well reflected in its market performance as well. Shopify stock surged to its all-time high of $1,502 earlier this month, marking a more than 190% gain in 2020.
However, the stock has trended lower since then and is currently trading close to $1,166 levels. That’s a 22% correction in just two weeks.
Investors should note that the pandemic will likely have a prolonged impact on consumer behaviour, which will continue to boost Shopify. The online store enabler Shopify still has a large market to serve and has attractive growth prospects. The recent weakness is an attractive opportunity for long-term investors.
Air cargo operator Cargojet (TSX:CJT) also sported superior revenue growth in the first half of 2020, thrashing pandemic worries. The stock has soared more than 80% this year. Canadian stocks at large are trading roughly 10% lower compared to the end of 2019.
Cargojet mainly generates its revenues from its air cargo services between 14 major Canadian cities. It runs 29 aircraft and moves over 1.8 million pounds of time-sensitive air cargo each business night.
Cargojet’s scale and unmatched network are big advantages that make it stand tall in the industry. The e-commerce market in Canada is still an underpenetrated market compared to the U.S. and U.K.
Thus, Cargojet has a huge growth potential given the booming e-commerce sector and the stay-at-home culture.
Cargojet stock looks overvalued after such a steep rally. Conservative investors can wait for a pullback or can consider buying in tranches.
Goodfood Market (TSX:FOOD) is another Canadian stock that witnessed substantial growth during the pandemic. It has more than tripled since its record lows in March amid the epic crash.
Goodfood Market saw its subscriber base increase significantly during the peak of lockdown in the second quarter of 2020. It’s a meal-kit company that delivers fresh meal ingredients to its subscribers.
The company management expects the current swing in consumer behaviour will have an extended positive impact on its demand. Notably, a larger subscriber base and higher profit margins could play very well for its earnings growth.
Goodfood Market stock has fallen almost 30% since its second-quarter earnings in August. The stock looks attractively valued after the correction and looks poised to soar higher. It is a relatively smaller stock and could be more volatile than Canadian stocks on average. However, it looks like an interesting play that’s worth the risk.
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 Vineet Kulkarni has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends CARGOJET INC., Shopify, and Shopify. The Motley Fool recommends Goodfood Market.