As we approach the end of the pandemic, investors are increasingly looking to reopening plays to maximize returns. Accordingly, certain stocks have taken off of late.
Among the group of reopening plays, these three stocks are some of the best. So, let’s get to it.
Air travel has absolutely taken a beating since the onset of the pandemic. Airlines such as Air Canada (TSX:AC) have not been spared.
Air Canada’s stock price plunged below the $15 mark in March 2020. However, shares of this company have made a recovery since then. As we inch closer towards the end of this pandemic, there appears to be a tonne of upside for this stock.
Air Canada recently bagged the much-awaited bailout worth $5.9 billion from the federal government. This certainly improves the company’s liquidity position and de-risks its balance sheet. Moreover, I believe that once the government lifts the pandemic-related restrictions, the stock will soar again.
Indeed, there’s a pent-up demand for travel. All of us would love to visit our favourite holiday destinations are being confined within our home cities for so long. For those bullish on this trend, Air Canada is a great choice.
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Restaurant Brands (TSX:QSR)(NYSE:QSR) has been on my radar for quite some time. Indeed, this is a growth stock that hasn’t performed well in recent years. And like the others on the list, the pandemic hasn’t helped in this regard.
The fast-food conglomerate’s Tim Hortons banner was already struggling prior to the pandemic. However, the pandemic has further accelerated some of the issues in this core profit centre for the company.
That said, the flip side of this reality is Tim Hortons is starting to boom in cities where locations are allowed to open. Various strategic moves made by Restaurant Brands’s management team appear to be working. And demand for the company’s offerings remains high.
Burger King and Popeyes Lousiana Kitchen continue to perform well. If the pandemic abates, as many think it will shortly, Restaurant Brands could pop nicely. I expect to see this growth gem regain its former glory. Investors who agree may want to consider picking up some shares while they’re cheap.
As a key purveyor of gas stations and convenience stores, Alimentation Couche-Tard (TSX:ATD.B) has also been hit hard as a result of the pandemic.
We’re all driving and picking up snacks at our favourite convince store less than we may have previously. For Couche-Tard, this hasn’t been a good thing.
However, with offices slowly reopening and the traditional commute coming back, I expect to see much better performance from Couche-Tard in the quarters to come.
Additionally, I expect to see more deals arise, as the economic outlook improves. As a growth-by-acquisition play, Couche-Tard stock has been hit by a relative lack of deal flow of late. If these factors change, I think the outlook for this stock, and eventually its stock price, could follow.
Like these top pandemic reopening plays? Here are a few more to consider right now:
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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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC.