The TSX isn’t as hot as Canada’s housing market, but stocks are gaining a lot of ground in Q2 2020. Some investors will take profits while the index is up nearly 12% year to date. But if you want higher returns, now is the time to pick up the right stocks.
Inter Pipeline (TSX:IPL) and BlackBerry (TSX:BB)(NYSE:BB) had a forgettable 2020. However, both have promising business outlooks this year and beyond. The companies appear undervalued, too, and the stocks should seek their intrinsic values soon.
The promise to shareholders
Maximizing value for all shareholders is the promise of the Inter Pipeline following its strong financial and operating results in Q1 2021. The most notable result was the 43% increase in net income to $127.8 million over Q1 2020. Its total revenue grew by 15%. On March 31, 2021, the available capacity on revolving credit facilities was approximately $2 billion.
Christian Bayle, Inter Pipeline’s president and CEO, said the successful execution of its business plan was the reason for the solid quarterly results. He also cited the considerable progress made in contracting and completing the Heartland Petrochemical Complex (HPC).
Bayle added, “The ongoing construction work at HPC is progressing well, and we remain on track to begin generating significant additional cash flow for shareholders in early 2022.” Inter Pipeline’s board of directors unanimously rejected the hostile takeover bid by an affiliate of Brookfield Infrastructure Partners in February 2021.
The board said the hostile bid is highly opportunistic. It doesn’t reflect Inter Pipeline’s full and fair value. If you were to invest today, the share price is $17.94 (+52.61% year to date). This $7.7 billion energy company pays a 2.68% dividend.
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Heritage of innovation
Over the last three years, BlackBerry’s total return was a dismal -26.20%. Thus far, in 2021, the tech stock is on a hot streak with its 21.8% gain. Market analysts are bullish and see a potential 36.2% upside from $10.28 to $14 in the next 12 months. The beating should be over for the $5.81 billion provider of intelligent security software and services to enterprises and governments worldwide.
BlackBerry was part of the GameStop drama in late January 2021. Its price has risen to as high as $31.49, or 206.3% higher than the current price. Still, investors should instead look at what’s in the cards in the future. The collaboration with Amazon Web Services should start to bear fruits this year.
Furthermore, the latest company announcement is another compelling reason to invest in the tech stock. On May 7, 2021, Chinese electric carmaker WM Motor chose BlackBerry’s QNX Neutrino Realtime Operating System (RTOS), QNX Software Development Platform (SDP), and QNX Hypervisor to power its advanced W6 SUV model.
The all-electric vehicle is China’s first mass-produced vehicle. W6 can autonomously perform specific parking maneuvers. According to Dhiraj Handa, BlackBerry’s vice-president for the Asia Pacific region, the company is a trusted partner for the automotive industry. BlackBerry boasts a heritage of innovation in operating system technology and security.
TSX is rocking
Besides the record-high close on May 7, 2021 (19,472.70), Canada’s main stock index rose for a 10th consecutive week. A senior investment adviser at IA Private Wealth, Allan Small, said, “We’re rocking.” All 11 major sectors, led by health care and energy, climbed in a broad-based rally. Inter Pipeline and BlackBerry are screaming buys.
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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. Fool contributor Christopher Liew has no position in any of the stocks mentioned. David Gardner owns shares of Amazon and GameStop. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends BlackBerry, BlackBerry, BROOKFIELD INFRA PARTNERS LP UNITS, and Brookfield Infrastructure Partners and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.