Despite the near-term volatility, the Canadian equity markets have delivered solid returns this year. However, few high-flying stocks have corrected over 35% from their recent highs. So, let’s assess whether buying opportunities exist in any of these stocks.
Amid the pandemic-infused restriction, the demand for Docebo’s (TSX:DCBO)(NASDAQ:DCBO) products and services rose, driving its stock price. However, amid the concerns over high valuation and expectations of life and businesses returning to pre-pandemic ways due to the ongoing vaccination drive, its stock price has corrected 42.6% from its December highs.
The correction offers an excellent buying opportunity, given its expanding customer base, increasing average contract value, and higher retention rate. Further, many businesses are adopting digital learning tools to upskill their employees due to their convenience and cost-effectiveness. So, I believe the demand for the company’s products and services could sustain even in the post-pandemic. Also, Docebo is focusing on launching innovative platforms to capture the expanding addressable market.
Aurora Cannabis (TSX:ACB)(NYSE:ACB) has corrected over 53% from its February highs amid the pullback in the cannabis stocks due to speculative trading fears. The retreat provides an excellent entry point for investors, given its improving operating metrics, expanding addressable market, and strong liquidity position.
After acquiring a significant market share in the Canadian medical cannabis markets, Aurora Cannabis is focusing on strengthening its position in Germany, Israel, France, and Australia. Further, the company’s management hopes that some of these medical channels would migrate to recreational channels in the coming quarters. The company is targeting the premium segment in the recreational cannabis market.
Further, the company has taken several cost-cutting initiatives, such as closing excess production facilities, slashing headcounts, and lowering its SG&A expenses, which could help the company to become profitable soon.
With investors shunning gold in search of better-returning asset classes, gold prices have been falling since August. The decline in gold prices has weighed heavily on Kinross Gold’s (TSX:K)(NYSE:KGC) stock price, which has fallen by 38.7% from its September highs. The company’s valuations are also looking attractive, with its forward price-to-sales and forward price-to-earnings multiples standing at 2 and 8.1, respectively.
Meanwhile, the rising COVID-19 cases worldwide, slowdown of vaccination in Europe, and rising tensions between the U.S. and China could drive gold prices higher, benefiting Kinross Gold. Further, the company has also planned to raise its production over the next three years, while its operating expenses could come down. So, higher realization price and increased production could boost its financials and stock price in the coming quarters.
BlackBerry (TSX:BB)(NYSE:BB), which had become a target of Reddit users, has witnessed wild swings this year. The company is currently trading 66% lower than its January highs, while its valuation looks reasonable. With an increased number of people preferring to work and learn from their homes, cybersecurity spending is rising at a higher rate, benefiting BlackBerry, which specializes in end-point security services. The company has also introduced several innovative products, which have helped in acquiring many blue-chip clients.
Amid the growing interest in autonomous cars, BlackBerry’s recent partnerships with Amazon Web Services and Baidu could be vital for its growth prospects. So, given its multiple growth drivers and attractive valuation, I expect BlackBerry to deliver superior returns this year.
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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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.