While markets continue to make new highs, some Canadian names are still trading way lower than their peaks. These top TSX stocks offer ample growth potential for long-term investors.
Maxar Technologies
Investors who believe space technology will be a booming area a few years from now can consider Maxar Technologies (TSX: MAXR)(NYSE: MAXR). The stock has plunged almost 50% in the last three months on valuation concerns and weaker quarterly results. But this could be an opportunity for very long-term investors to tap this high-growth area.
It is a $3 billion company that provides services like earth imagery and geospatial data analytics. Public and private sector companies widely use these services for security, global broadband services, and navigation.
Although the company’s bottom line growth has been shaky, its somewhat stable revenues should soothe investors. The industry is still in the embryonic phase. Maxar could see significant growth in the long term with its expertise in space infrastructure and innovation. As the space race heats up and corporate investments grow, companies will likely see notable growth and profitability.
B2Gold
It makes sense to park at least some portion of your portfolio in gold or gold miner stocks. The yellow metal seems to be in great touch this year, as inflation is soaring again. Canadian gold miner B2Gold (TSX: BTO)(NYSE:BTG) could be an attractive pick at these levels.
The low-cost miner stock is currently trading at $6.2, almost 40% lower than its last year’s highs. Rallying gold prices should bode well for its earnings growth and should lead to margin expansion. Importantly, its discounted valuation against the industry average indicates a huge runway for growth this year if gold prices continue to trade strong.
B2Gold has maintained its production target of close to one million ounces of gold for 2021. The target is close to last year but still creditable given the production drop in Q1 2021 amid disturbances in its key mining assets in Mali.
The company aims to make $630 million in cash from operations with the yellow metal at US$1,800 per ounce. Note that gold prices have crossed US$1,900 per ounce recently. Thus, continued strength in gold prices could bode notably well for B2Gold’s cash flows and earnings growth.
Air Canada
Investors’ favourite Air Canada (TSX: AC) stock is already up almost 25% this year. The stock will likely continue to trade strong as international air travel seems coming back to normal. Canada maintained its conservative approach and imposed blanket restrictions on air travel since last April. However, after the U.S. and Europe, Canada might also follow suit and start resuming air travel gradually.
Air Canada is among the very few passenger airlines in the country that will benefit from the pent-up travel demand post-pandemic. Its potential revenue growth and lower cash burn should bode well for investor sentiment and, ultimately, for the stock.
AC stock has more than doubled since last October. However, I think it’s still not too late to buy the stock at current levels. It will likely see significant gains in the next 12 to 18 months amid its road to profitability in the absence of travel restrictions.
