Boosted by January’s gross domestic numbers, jobs returning and Biden’s $2.3 trillion infrastructure pitch, the Canadian equity markets have been rising, with the S&P/TSX Composite Index up close to 9% for this year. Amid increased investors’ confidence, here are the four top Canadian stocks you can buy this month for superior returns.
With small-scale and medium-scale businesses shifting towards omnichannel solutions and increased online shopping adoption by customers, the demand for Lightspeed POS’s (TSX:LSPD)(NYSE:LSPD) products and solutions could only rise. The company is also strengthening its competitive positioning and expanding geographically through aggressive acquisitions and launching new innovative products.
Meanwhile, Lightspeed POS has also strengthened its financial position by raising US$676.2 million, which could fund its growth initiatives and also future acquisitions. Along with these new acquisitions, a robust pipeline of products and penetration into newer markets bode well with its growth prospects. Meanwhile, amid the recent sell-off in high-growth tech stocks, Lightspeed POS has fallen by over 23% from its recent highs, providing an excellent buying opportunity.
BlackBerry (TSX:BB)(NYSE:BB) is my second pick. After its weak fourth-quarter sales, the company has continued its downward trend to trade over 70% lower from its January’s high. The pullback offers an excellent buying opportunity, given its multiple growth drivers.
Amid increased remote learning and working, the demand for endpoint security services has been rising, which could benefit BlackBerry. The company is also looking at expanding its market share in the cybersecurity segment through its recent launches Spark suites and Cyber Suite and a robust pipeline of new products.
Further, BlackBerry’s recent partnerships with Amazon Web Services and Baidu could be a significant driver, given the rising demand for autonomous electric vehicles. The company’s management is also hopeful of delivering double-digit growth in its Cybersecurity and BTS verticals during this fiscal year.
Boosted by its impressive fourth-quarter performance and promising management’s guidance, Magna International (TSX:MG)(NYSE:MGA) is trading over 24% higher for this year. Meanwhile, I believe the uptrend will continue, given its exposure to the high-growth EV (electric vehicle) market and attractive valuation. Fast & Factor projects the global EV market to reach US$700 billion by 2026, representing an average annualized growth rate of 22%.
Meanwhile, Magna International is looking to strengthen its position in the EV market through its joint ventures with Beijing Electric Vehicle Company and LG Electronics. Apart from these joint ventures, the company also produces a wide range of electric powertrain products, which could witness strong growth amid rising demand for EV vehicles. Despite the strong growth in its stock price, its forward price-to-sales and forward price-to-earnings stand at attractive 0.6 and 10.9, respectively.
Algonquin Power & Utilities
My final pick would be Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN), which operates a low-risk energy utility business serving around 1 million customers and renewable power generating facilities. The company sells its power through long-term contracts, shielding its financials from price and volume fluctuations.
Further, the company plans to invest approximately $9.4 billion over the next five years, which could increase its rate base at a compound annual growth rate (CAG) of 11.2%. Supported by the rate base growth, the management expects its adjusted EPS to grow at an annualized growth rate of 8-10%. So, the company’s growth prospects look healthy.
However, as of Monday, the company trades over 11% lower than its 52-week. The deep freeze had severely dented power production in some of its facilities, lowering its financials. With its long-term growth potential remaining intact, I believe investors should utilize this correction to accumulate the stock for superior returns.
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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 owns shares of Lightspeed POS Inc. The Motley Fool recommends BlackBerry, BlackBerry, and Magna Int’l 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.