Investing is tough. When stocks are going up, it seems like investors can do no wrong. However, when stocks keep falling, it can be very difficult to maintain composure. One of the best things an investor can do for their financial freedom is to remain calm and do nothing. You will be exposed to many bull and bear markets throughout your life. In this article, I will discuss two companies that I would be looking to buy and one I still believe would be a strong sell.
This stock has had a difficult year
When stocks rise more than 100% over a year or two, it may be time to ease off the gas pedal. Institutional investors are very likely to lock in some gains at that point, sending the stock plummeting. This may be the case with Brookfield Renewable Partners (TSX: BEP.UN)(NYSE: BEP). The company has fallen an astonishing 22% since the start of the year. Currently, it trades as low as it ever has this year.
Heading into 2021, the stock had an amazing run, climbing more than 175% over the past two years. In fact, before it started falling earlier this year, Brookfield Renewable stock rose more than 215% since its opening price on January 1, 2019. Clearly, the stock needs some time to cool off. However, renewable energy remains the way of the future. This company continues to be a global leader in its industry and warrants ownership in a diversified growth portfolio.
The top growth stock in Canada
Whenever it comes to stocks to buy, one of the best choices you can make is Shopify (TSX: SHOP)(NYSE:SHOP). The company is a global leader in e-commerce, holding the second-largest share of the online retail market in the U.S. The company it trails? None other than the mighty Amazon. However, these two companies aren’t exactly true competitors. Amazon provides a marketplace service where merchants can place their products, whereas Shopify enables merchants to operate independent online shops.
Surprisingly, as of this writing, Shopify has only fallen about 7% this year. The reason investors are feeling a bit unsure about their positions in this company is because of its approximately 30% drop since its peak this year. However, Shopify continues to be run by a top CEO in Tobi Lütke. The company is also a proven winner, having given shareholders massive wealth since its Initial Public Offering (IPO). This stock is a generational company that should find a home in your portfolio.
Things aren’t looking very good for this company
If you had asked any random sample of people last year if they thought we would still be facing stay-at-home orders by May, most of them probably would have said no. Unfortunately for Cineplex (TSX: CGX), those are the conditions in which we find ourselves. The company continues to bleed cash and shareholders should be very prudent when deciding to gamble on its recovery. Cineplex recently released its Q1 earnings report and it wasn’t pretty.
In Q1 2020, the company faced very large declines in attendance because of the COVID-19 pandemic at the end of the quarter. However, in Q1 2021, the company fared even worse. Over the entire quarter, Cineplex managed just $41.4 million in revenue compared to $283 million the previous year.
Its box office revenues were ~97% lower in Q1 2021 compared to Q1 2020. The company also posted a loss of nearly $90 million for the quarter. Clearly, troubles still lie ahead for Cineplex and investors would be wise to stay away for now.
