The S&P/TSX Composite Index is unperturbed by the market noise. Canada’s primary stock exchange posted a triple-digit, week-over-week gain of 160.6 points on May 21, 2021. It closed at a record-high 19,543 on the previous trading day. Investors’ confidence in the market remains high, given the 12.01% year-to-date gain. Meanwhile, three stocks could mirror the TSX’s performance and deliver double-digit gains in 2021.
No cooling off
Cargojet (TSX:CJT) is undoubtedly a screaming buy, as the air transport business will not cool off in the post-COVID economy. The demand-supply imbalance should lead to heavy orders and more flights. On March 18, 2020, the share price was only $74.87. When the pandemic struck, Cargojet shares soared as high as $245.03 in early November 2020.
The industrial stock’s total return last year was a whopping 109.37%. As of May 21, 2021, Cargojet trades at $183 per share. It’s a good entry point considering the stock is down 14.69% year to date. Market analysts recommend a buy rating. Their forecast is a potential upside of 69.4% to $310.
Still, the gain could be 100% owing to the growing thirst for air transport and the need to prevent supply chain disruptions. For Cargojet, management is preparing to capture the next phase of e-commerce growth. Its president & CEO Dr. Ajay Virmani said, “What was previously a consumer-led shift to digital is now rapidly becoming a merchant-led shift, accelerating the move to e-commerce even further.”
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Organic growth still ahead
Real Matters (TSX:REAL) continues to benefit from the low-interest-rate environment, although, at $16.57 per share, the tech stock underperforms with its 13.74% year-to-date loss. Still, analysts’ price target is between $19.51 and $34.36, or a 107.36% climb at best.
The Q1 fiscal 2021 financial results (quarter ended December 31, 2020) reflect that the appraisal and title & mortgage closing services are doing well. Real Matters’s top and bottom lines grew by 15.9% and 39.2% compared to Q1 2020. In Q2 fiscal 2021, total revenues climbed 17.5% versus Q2 2020, although net income slid 37.4%.
Nonetheless, Lang is confident that Real Matters will continue driving organic growth over the long term. The company counts on its performance track record and the breadth of its U.S. lender client base.
Top cannabis stock
The cannabis space is volatile as ever, and its constituents have declined in value since the February rally. Canopy Growth (TSX:WEED)(NYSE:CGC) has risen to as high as $66.21 on February 10, 2021. As of May 21, 2021, WEED trades at $27.71 per share.
Despite the stock’s underperformance (-11.53% year-to-date loss), analysts forecast the top weed stock to climb 98.5% to $55. Beware of the downside, because the price could still slide to $21. Like most skeptics, I wouldn’t say that Canopy Growth is in the buy zone.
However, if you believe the boom will come soon, Canopy Growth is the top choice. Constellation Brands is its largest shareholder and is only waiting for the federalization of marijuana in the U.S. before it could buy Acreage Holdings. Management expects to report positive adjusted EBITDA in the second half of fiscal 2022.
Order of choice
The stocks in focus have visible growth runways except for one. Cargojet is the logical choice, while Real Matters is second. Canopy Growth is a speculative asset but a cheap buy today before the marijuana boom.
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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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CARGOJET INC. and Constellation Brands. The Motley Fool recommends Real Matters Inc.