It’s been nearly six months since the vaccine launch. Despite slower vaccinations and continued restrictions, stock markets have been soaring high on the re-opening hopes. TSX stocks at large are up almost 25%, while some Canadian names have more than doubled. But investors should think that if this is the case amid partial re-openings, what will it be like when the economy attains full swing? So, here are top TSX stocks that have gained big in the last six months and could continue to gain amid a re-opening.
Once mobility restrictions wane and people are allowed to spend, they will likely spend a large chunk on travel and leisure. In that case, BRP, which owns popular brands like Ski-Doo and Sea-Doo, should see higher demand.
The company already saw robust demand recovery in the last few quarters. The management even issued increased guidance for 2021 due to better-than-expected quarterly performance. Notably, BRP also announced its plans to make its fleet electric in the next five years.
That’s why the stock has seen a terrific surge recently. BRP stock plunged to $18 levels in the pandemic-led crash last year. It is currently trading at $119 — its all-time highs. That’s a stupendous 560% rise in just 13-odd months. Interestingly, the stock does not seem stretched from the valuation perspective. Given the bullish guidance for 2021 and robust demand prospects, the stock probably has room to grow.
Canada’s energy giant Suncor Energy (TSX:SU)(NYSE:SU) stock has surged more than 50% in the last six months. Its disciplined cash management and improved crude oil prices helped during the crisis last year. Interestingly, the stock is still trading 40% lower than its pre-pandemic highs last year.
Recovering energy demand and higher quarterly earnings will likely drive Suncor Energy stock in 2021. It will release its Q1 2021 earnings next week. The crude oil prices have relatively stabilized this year compared to last year. How Suncor management sees things ahead amid re-opening could be a bigger driver for the stock.
Suncor Energy stock pays stable dividends that yield 3.5% at the moment. Investors can expect a reversal of last year’s dividend cut in 2021 if things continue to play in favour of the energy giant.
The pandemic has indeed changed the landscape of global aviation. Air Canada (TSX:AC), one of Canada’s most profitable airlines in 2019, reported more than $4.6 billion in losses last year.
The Canadian government’s $5.9 billion bailout package to Air Canada could be a game changer, though. First of all, it provides liquidity to the airline, remarkably strengthening its balance sheet. Although Air Canada’s debt has substantially increased since last year, the added debt is way cheaper.
Air Canada plans to report its Q1 2021 earnings on May 7. Its revenues and earnings will most likely repeat the same old story, but its cash burn in Q1 will be vital to watch. AC stock is still trading 50% lower than its pre-pandemic highs. Whether its Q1 earnings push the stock closer to those levels remains to be seen.
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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.
Fool contributor Vineet Kulkarni has no position in any of the stocks mentioned.