Air Canada vs. BlackBerry Stock

Air Canada and BlackBerry stock are two of the most intriguing stocks on the TSX. But which of these investor favourites is the better buy today?

| More on:
Question marks in a pile

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Throughout 2021, two of the most popular stocks among Canadian investors continue to be Air Canada (TSX:AC) and BlackBerry (TSX:BB)(NYSE:BB). And although Air Canada and BlackBerry are well known among investors, the two stocks couldn’t be more different when it comes to their popularity.

Ever since the pandemic hit, and Air Canada stock fell from more than $50 a share, investors have been watching the stock for signs of a major recovery.

Today, it trades at just about $25 a share. So, if it could recover to its pre-pandemic price, investors know they could double their money.

BlackBerry stock has a big following among investors for a different reason. The company has been referred to as a meme stock and pumped on Reddit by millions of retail investors.

This saw the stock skyrocket not once but twice already this year, gaining a tonne of value in a short period of time.

Both of these stocks and the situations surrounding them have understandably caught the attention of numerous investors.

So, you may be wondering which is the better stock to buy today:, BlackBerry or Air Canada stock?

BlackBerry stock

BlackBerry is a company that’s well known — not just among investors but many Canadians. The former phone maker is now predominantly a software security stock — a business that was always BlackBerry’s bread and butter.

Since its second major rally ended at the start of June, over the last six weeks, the stock is down 30%. This shouldn’t be surprising anyone. Me and a number of my fellow Fools have been advising investors to avoid BlackBerry the entire time.

Any time a stock rises on pure speculation, it’s best to stay away — even more so when the stock price rises to more than two times than consensus analysts target price.

BlackBerry stock was never a bad business, though. And it wasn’t impacted by the pandemic anywhere close to Air Canada stock.

However, much of its potential is long term, so it never made sense to buy the stock at an inflated price today.

At roughly $13 a share, it’s not only down 30% from its June high but also more than 60% off its 52-week high. Still, though, at this valuation, the stock seems pricey.

Air Canada stock

Air Canada stock is not as overvalued as BlackBerry. Some would even say it’s slightly undervalued.

The difference is that Air Canada has a lot less certainty than BlackBerry, especially in the short term. This is highly crucial, because after a year of being impacted so badly, Air Canada needs to recover, and it needs to recover fast.

The company can’t afford to lose any more value while its planes sit idle. However, it can hardly control its own destiny in the matter, which is why it’s still such a high-risk investment.

Air Canada may be able to recapture its domestic routes and see some increased travel to well-vaccinated countries like the United States.

But the fact that the pandemic is a global event, and the virus continues to mutate, causing different travel restrictions and requirements everywhere, is a big headwind the company has to face.

Bottom line

Given that BlackBerry is still overpriced, I’d have to say Air Canada stock is the better investment today of the two. However, just be aware that if you do decide to buy Air Canada, it still has a significant amount of risk.

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 Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry.

More on Stocks for Beginners

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Stocks for Beginners

New Investors: Follow the KISS Model With These 3 TSX Stocks

These TSX stocks keep it super simple for new investors. You'll need each of these services over the next decade…

Read more »

financial freedom sign
Stocks for Beginners

Millennials: Pay Down Debt and Get Rich in Just 1 Decade

Millennials continue to have huge debt on their hands, but they can pay it off and become rich by getting…

Read more »

protect, safe, trust
Stocks for Beginners

3 Recession-Resistant Stocks to Buy Right Now

Are you looking for stocks that could lift up your portfolio during a recession? Here are three top picks!

Read more »

edit Sale sign, value, discount
Stocks for Beginners

4 Top Growth Stocks Still on Sale, But Not for Long

Here are the top four growth stocks I would consider.

Read more »

STACKED COINS DEPICTING MONEY GROWTH
Stocks for Beginners

2 Stocks That Could Grow Your Portfolio Over the Next Decade

If you got a decade-long time horizon, here are two top TSX stocks that could significantly grow your portfolio.

Read more »

A close up image of Canadian $20 Dollar bills
Stocks for Beginners

3 Simple TSX Stocks to Buy With $25 Right Now

These three TSX stocks offer a no-brainer choice when it comes to investing, even just a small amount over time.

Read more »

Man data analyze
Stocks for Beginners

Got $3,000? 3 Top TSX Stocks to Buy Right Now

Here are three top TSX stocks that could outperform amid volatile times.

Read more »

edit Woman calculating figures next to a laptop
Stocks for Beginners

New Investors: Get More Income With Dividend Stocks. Here’s How

These safe and discounted dividend stocks can pay you growing dividend income for many years to come. They're good core…

Read more »