The TSX continues to experience a rebound. However, there’s been a pullback in the market, as certain industries continue to fall. This has created an opportunity to get on popular stocks, with the hope of a quick rebound in share price. Some of these investments include Air Canada (TSX:AC) stock and Dogecoin.
If you’re an investor looking for growth, a word of warning. Air Canada and Dogecoin each have red flags to watch out for but, of course, opportunity to make a killing. So, let’s dig into the bear and bull views for both Air Canada stock and Dogecoin.
Air Canada stock
Air Canada stock entered the pandemic on a high. After about a decade of growth, where shares fell below a dollar, the company reached all-time highs of $50. Then the pandemic hit. The company took on debt each and every day that planes were on the ground. Even today, restricted travel continues to be the norm. So, the company continues to lose money until the pandemic is over.
It may not feel like it, but the pandemic will end. The company will eventually pay down its debt. The government aid package of $5.9 billion is certainly a good start. And don’t forget: that debt isn’t all pandemic related. A lot was from reinvesting in its core business, such as fuel-efficient aircrafts and the Aeroplan program.
Since then, Air Canada stock has made some strong money-making moves. It cancelled the Transat A.T. deal. It entered the cargo shipping arena. And it continues to ground flights that simply don’t sell or sell at far less capacity. As the company slowly gets flights back in the air, debt will become less and less, as these new cost-saving methods remain in place.
At today’s prices, long-term investors can get Air Canada stock for a steal if they’re patient. The stock trades at 3.1 times sales and 3.9 times book value. It’s likely to be the first airline in Canada to experience a significant rebound with a major market share.
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Whereas Air Canada stock has history, Dogecoin remains a relatively new cryptocurrency. The company may have started as a joke, but investors aren’t laughing today. Canadian investors want money fast after a year of growth stocks, and it looks like Dogecoin offers this growth. In the last year alone, the cryptocurrency rose 17,726%!
But remember, this is basically a glorified penny stock. That means there is still a lot of risk with Dogecoin. In fact, there is still a lot of risk with the cryptocurrency market in general. On the one hand, you may see your shares make enormous fluctuations over a period of days or weeks. On the other, long-term holders may become millionaires from relatively small investments.
So, if you’re interested in Dogecoin, my recommendation is to start small. Buy a stake at lower prices based on what you would be comfortable with losing. Then, you can always increase from there. This “drip-feeding” method means you won’t miss out on earnings, but won’t lose everything in the process. If cryptocurrency is the future, a decade from now you could be incredibly glad you bought up shares at such a low price.
So, which is it?
The market isn’t without risk. We saw that back in March 2020. However, there are certainly areas that provide less risk. In that case, if you’re the less-risk, more-rewards person, I would choose Air Canada stock. Air Canada will make a comeback. Even if we don’t see that $50 share price in the next year or so, it will reach that down the line. You may have to be patient, but it will come one day.
Dogecoin, however, is definitely with its risk. This cryptocurrency could be bought out by another group or implode completely. However, it’s crazy cheap! So, honestly, it wouldn’t hurt to buy even 10 shares and just see what happens!
What it comes down to are your own goals. If you don’t have them, you shouldn’t be investing. And everyone should be investing. So, start by creating some goals and deciding which of these equities are best for you.
In that case, you could choose a completely different stock, like these top 10 for HIGH GROWTH.
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 Amy Legate-Wolfe owns shares of AIR CANADA.