The U.S. election results euphoria was continued in the stock markets this week on the vaccine news. Pfizer and BioNTech announced yesterday that their vaccine is more than 90% effective, the first-ever vaccine to reach such efficacy levels.
The S&P/TSX Composite Index is now 47% up from its March lows, just shy of a few percentage points from its all-time highs. While TSX stocks at large gained more than 2%, some beaten-down names surged more than 25% yesterday.
Air Canada (TSX:AC) investors must have started seeing the light at the end of the tunnel with visible developments on the vaccine front. The airline stock jumped a notable 29% on November 9 and reached its five-month high.
There was a significant surge in Air Canada volume yesterday. More than 27 million shares exchanged hands against its average three-month daily volume of approximately 5 million.
The vaccine news is substantially positive for airline stocks such as Air Canada. A prompter distribution of the same will notably speed up Air Canada’s recovery.
Apart from the vaccine, Air Canada reported much better quarterly numbers yesterday. Its revenue for the third quarter increased by 44% compared to Q2, while losses narrowed as well. Its cash burn slowed to $9 million per day in Q3 against $15 million in the earlier quarter.
While many global airlines are on the verge of filing for bankruptcy, Air Canada is very well-positioned due to its strong balance sheet. Its strong market share and operational efficiency will likely fuel a relatively faster recovery in the post-pandemic environment.
Suncor Energy (TSX:SU)(NYSE:SU) was unarguably one of the hardest-hit stocks in the energy sector amid the pandemic. It surged almost 25% on the vaccine news yesterday and reach a two-month high. The entire energy sector zoomed after crude oil prices soared 6.6% on November 9.
The integrated energy giant Suncor Energy has lost more than $4 billion in the nine months of 2020. Lower demand for crude oil drove prices lower, ultimately putting a burden on Suncor’s financials.
However, Warren Buffett-led Berkshire Hathaway has been doubling down on Suncor Energy stock for the last couple of quarters. It held more than 19 million shares of Suncor at the end of Q2 2020.
Suncor Energy operates at each node of the energy supply chain. That means it produces oil from its oil sand assets, refines and markets as a finished product. Suncor Energy stock yields a decent 5.5% and looks attractive, particularly for income-seeking investors.
The entertainment and media company Cineplex (TSX:CGX) breathed a sigh of relief on the vaccine news yesterday. Its fortunes were significantly hampered this year amid movie delays and stay-at-home orders. The stock soared approximately 32% on November 9.
The vaccine is certainly positive news for Cineplex and its investors. However, how fast it will be distributed and will that help return patrons to movie theatres remain to be seen.
Cineplex stock is among some of the top-losers among TSX stocks this year. It has lost almost 80% year-to-date.
Its debt has considerably increased in the last few years. To add to the woes, liquidity is a key concern for Cineplex, and weaker demand for longer could force the company to go bankrupt.
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Fool contributor Vineet Kulkarni has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short December 2020 $210 calls on Berkshire Hathaway (B shares).