Many avoid investing in stock markets because of the volatility risk. However, this risk gets effectively diversified when you are investing for the longer term. Here are three TSX stocks that offer striking growth prospects for the long term.
Canada’s top freight carrier stock Cargojet (TSX:CJT) has fallen 20% so far this year. Investors must have disheartened with the recent fall, mainly after the stock doubled last year.
However, this fall could be a lucrative opportunity for long-term investors. It was the company’s stretched valuation that largely brought the stock down. Cargojet reported solid revenue growth last year and could continue this year as well.
Evidently, the company might not see as steep top-line growth as last year because it was driven by the surge in e-commerce activities amid the pandemic. But its growth could still be attractive this year, driven by its competitive advantages.
Cargojet operates between 16 major airports in Canada and ensures next-day delivery for over 90% of the Canadian population. Its operational efficiency, scale and cost-effectiveness stand tall in the industry.
Even if the pandemic somewhat diminishes, e-commerce will likely continue to drive Cargojet’s top line. Investors can consider making the most of the stock’s recent weakness.
Almost all gold mining companies reported record profits as the yellow metal soared in 2020. However, gold stocks have come down significantly this year as the gold retrenched. One stock that has seen a notable fall recently is B2Gold (TSX:BTO)(NYSE:BTG). It has fallen more than 40% after topping last month and is currently trading close to its 10-month lows.
For the year 2021, B2Gold aims to produce 1 million ounces of gold, close to its 2020 output. It is a $6 billion gold producer that operates three mines in Namibia, Mali, and Burkina Faso. Higher production and higher realized gold prices could boost its earnings in 2021. B2Gold is a financially sound, dividend-paying company that has delivered substantial shareholder returns over the long term.
Interestingly, B2Gold stock is remarkably undervalued at the moment. If the yellow metal resumes its upward journey, BTO stock could see enormous gains and could outperform peers mining stocks.
Air Canada (TSX:AC) stock is up almost 40% since February. Though many analysts are dubious about the flag carrier’s recovery, I am hopeful and bullish on the stock.
What matters right now for Air Canada is to sustain longer amid the restrictions. There is a high probability that its strong balance sheet will make it through the crisis.
Notably, Air Canada stock looks overvalued at these levels. Conservative investors can consider buying in slices.
The worst seems to be over for the country’s largest airline. The government aid for the struggling airline sector could come soon, which will likely take care of Air Canada’s near-term challenges.
If you are a long-term investor, you really should not worry about the short-term noise. Perhaps after two or three years, Air Canada would be operating at a significantly higher capacity, and its stock would be at incredible levels.
Before you consider Air Canada, you may want to hear this.
Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now... and Air Canada wasn't one of them.
The online investing service they've run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.
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. The Motley Fool owns shares of and recommends CARGOJET INC.