The TSX showed an impressive recovery rally despite the economic fallout from the pandemic. Many of the top stocks in the market recovered to pre-pandemic valuations and several of them even soared to new all-time highs.
Fortunately, you can still find excellent assets with upside potential despite the frothy market conditions. If you have $5,000 that you can invest in the stock market to gear your portfolio for stellar long-term returns, I will discuss two companies that you should have on your radar today.
Tilray
Tilray (TSX: TLRY)(NASDAQ: TLRY) is a name that had fallen out of the limelight for a long time after the cannabis industry’s speculative growth saw a massive correction. While cannabis companies still seem like a semi-risky space to consider, Tilray could be a stock worth investing in right now.
The company’s merger with another cannabis giant Aphria has been a game-changer for the cannabis sector. Tilray has become the most significant multinational cannabis company in terms of its revenues. The successful merger between these two companies has allowed Tilray to gain significant exposure to the U.S. market and free trade in Europe.
Most Canadian cannabis producers can only aspire to reach the same potential for global operations that Tilray now boasts. The new company will continue producing cannabis-infused beverages and craft beer. It also has plans to introduce CBD and hemp products to diversify its income streams.
BlackBerry
BlackBerry (TSX: BB)(NYSE: BB) is a tech stock that saw a massive boost amid the infamous short squeeze fiasco earlier this year. Reddit users took advantage of hedge funds’ significant short interest in several stocks, including BlackBerry. Hundreds of Redditors began buying BlackBerry stock, raising its share prices and forcing hedge fund managers to buy the stock at a premium.
GameStop was another stock that rallied due to the short squeeze, but the video game company did not boast fundamentals that could make its rising value a sensible move. BlackBerry is unlike GameStop. The company could benefit greatly from the burgeoning 5G sector.
BlackBerry is no longer the smartphone giant it once was. However, it could still play a vital role in the tech sector in the coming years. BlackBerry offers endpoint security management solutions. It is expanding its reach in embedded systems, particularly in the automotive industry. As 5G technology leads to the growth of 5G-enabled endpoint devices, cybersecurity will become increasingly critical.
BlackBerry is well-positioned to tap the massive potential in that market. A word of caution about the stock: It has become the target of Redditors again surging over 10% on May 26. This could lead to another artificial rally and a subsequent correction. It would be wise to keep a close eye on the stock to see how the situation develops and picking up shares when the price goes back down.
Foolish takeaway
The current volatility in the stock market due to inflation concerns warrants practicing some caution if you are worried about short- to medium-term stock market returns. However, investors with a long-term investment horizon might not need to worry about the immediate effects of inflationary conditions.
If you have the capital to spare, BlackBerry and Tilray could provide substantial upside potential to your investment portfolio. It could be a good idea to keep a close eye on the two companies and wait for a good opportunity to invest for long-term returns.
