Many TSX stocks are skidding due to the COVID-induced bloodbath in 2020. However, a business turnaround is looming for two popular companies. Investors can take positions in both right now while the share prices are absurdly low.
Parkland Fuel (TSX: PKI) and BlackBerry (TSX: BB)(NYSE: BB) should be returning to market prominence soon. The last quarter of this year could also be the springboard to a more prosperous 2021 for would-be investors.
Non-cyclical business
Parkland hit rock bottom when it dropped below $20 for the first time in a long while. From $46.25 on February 18, 2020, the price fell 57.8% to $19.50 on March 18, 2020. No one expected one of North America’s fastest independent marketers of fuel and petroleum products to sink severely due to COVID-19.
The stock has since recovered, although it’s still down by 30%. Analysts covering Parkland are recommending a buy rating and setting a 50.6% appreciation (from $32.54 to $49) in the next 12 months. The company currently pays a 3.67% dividend.
This $4.85 billion company deserves attention, given its growing portfolio of supply relationships and storage infrastructure. Aside from supplying and marketing trusted fuel brands, Parkland also operates convenience stores. From 2017 to 2019, revenue grew by an average of 39%.
Supply and trading are the cornerstones of Parkland’s fuel marketing business (retail, commercial, and wholesale). The recent acquisition of the licence for the exclusive use of the “On the Run” trademark in most of the U.S. states is a positive development. Parkland plans to create a unified North American convenience brand in 2021.
Holistic growth model
BlackBerry is also developing strong channel partnerships to drive long-term, sustainable growth. The erstwhile phone maker is now a leading player in the enterprise mobility management space. It’s gaining recognition as a security and productivity innovator.
The tech stock is incredibly cheap at $5.98 per share. Analysts project the price to soar between 90% and 134% in the next 12 months. BlackBerry’s holistic growth model is the key to expanding and cementing its market leader position in the enterprise mobility segment.
BlackBerry takes pride in the most secure mobile enterprise solutions available in the market. Its end-to-end software and services platform for the Enterprise of Things enable smart business processes, whether the endpoint communication is through computers, vehicles, sensors, and equipment.
Prem Watsa, Canada’s Warren Buffett, is among the top investors of BlackBerry. The tech stock is the second-largest holding of Fairfax Financial Holdings at 14.28% of the total portfolio with 46.7 million shares. If the long-term earnings growth expectation is 51.8%, BlackBerry is an exciting option today.
Creating shareholder value
The stock market remains volatile in the fourth quarter of 2020, but it doesn’t mean you can’t find companies that will create value for shareholders post-pandemic. Parkland Fuel and BlackBerry are well positioned for a turnaround. Both companies should see organic growth very soon.
Parkland is capitalizing on its supply advantage and integrating successfully. BlackBerry continues to leverage AI and machine learning to deliver innovative solutions in cybersecurity, safety, and data privacy solutions. You have a pair of assets that promise many years of growth. Initiate a position now before the stocks become red hot and expensive.
