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3 Best Canadian Stocks to Buy This Fall

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Are you looking for the best Canadian stocks to buy this fall? Look no further. Here are three Canadian stocks poised for strong gains this fall.

Alimentation Couche-tard

Alimentation Couche-Tard (TSX:ATD.B) is among the few Canadian stocks that saw their price surge during the pandemic. The convenience store giant most recent quarter was solid despite a difficult environment. Couche-Tard’s profits were boosted by higher fuel demand and lower fuel prices.

In the first quarter of 2021, net income was US$777.1 million, an increase of 44% from US$538.8 million in the same quarter of last year. Adjusted net earnings per share on a diluted basis were 49.9% higher, from US$0.48 to US$0.71. Operating expenses were 0.3% lower due to tight expense management.

The pandemic positively impacted the results of Couche-Tard, as people prefer to shop near their homes. While customers went to the convenience store less often, they purchased more and spent more on groceries.

Total revenues coming from the sale of merchandise worldwide rose by 7%. While Couche-Tard saw a drop in fuel sales during the lockdown, it earned a higher profit on each liter sold. Lower fuel prices boosted gross profit margins at its gas stations by 13.1%.

Couche-Tard’s total revenue fell by 31.4% to $9.71 billion due to the drop in fuel demand. On the plus side, demand is starting to pick up, especially in Europe.

The company is ready to invest in its activities to support its five-year growth plan and is on the lookout for acquisitions. Couche-Tard shares are up about 15% for the year.

Constellation Software

Constellation Software (TSX:CSU) stock has witnessed a slow and steady surge of 20% year to date.

The company distributes a quarterly dividend of US$1.00 per share. Its current dividend yield is 0.4% and the forward P/E ratio is 36.3.

Constellation provides software services to public and private companies. The tech giant acquires smaller companies, expanding and developing their software verticals.

In its second-quarter results ending June 30, 2020, the company’s revenue grew 9% year-over-year to US$922 million. Net income increased 12% to US$83 million from US$73 million in Q2 2019.

Constellation went public on the TSX in 2006. In the last two decades, the company has returned over 4,000%.

Shopify

Shopify (TSX:SHOP)(NYSE: SHOP) stock — alongside the rest of the tech industry — fell off a cliff in September. While the hot stock was expected to retreat after a meteoric rise since March, the selloff has gone too far and investors have started buying the downside. Shopify shares are still up more than 160% year-to-date.

Nothing changed in all of Shopify’s long-term fundamentals in September.

Consumers are still switching from offline shopping to online shopping. Small- and medium-sized businesses – many of which did not have an online presence before the pandemic — continue to rapidly migrate to the online channel and build e-commerce stores. Shopify is still the number one e-commerce platform in the market, providing the best solutions to help these SMBs succeed online.

The opportunity is huge, with Shopify accounting for 1.7% of global online retail sales last year, but U.S. retail businesses accounting for 35% of total online retail sales. Gross margins are still strong, up around 60%. And the opportunity for Shopify to generate huge profit growth over the next five to 10 years remains compelling.

In other words, Shopify is still one of the best growth companies in the market. Shopify stock is a long-term winner. Short-term growth trends remain favourable. Shopify topped the list of TSX’s top-performing stocks since 2017. 

The only thing that has changed is that Shopify’s share price is about 8% lower than it was a month ago. It’s time to buy Shopify stock while it’s attractively priced.

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 Stephanie Bedard-Chateauneuf owns shares of ALIMENTATION COUCHE-TARD INC. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Constellation Software, Shopify, and Shopify. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC.

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