The pandemic came along to devastate stock markets by causing a broad overall decline. While most of the publicly traded companies recovered their valuations in a matter of months, the Canadian stock market presented plenty of value opportunities. The global health crisis also highlighted the importance of having additional revenue streams to supplement active income.
If you’re just starting to invest to take advantage of the situation created by the uncertainty in the market, you might want to consider investing in assets that show signs of improvement as the pandemic subsides. Alimentation Couche-Tard (TSX:ATD.B) is one such stock that could be worth adding to your portfolio today for this purpose.
The convenience store and gasoline station chain possesses several qualities that could make it an ideal stock pick for investors seeking pandemic recovery plays. I will discuss the reasons why the stock could be a good buy right now to help you make an informed decision about whether to add the stock to your investment portfolio.
Reasons why Alimentation Couche-Tard is a good buy today
Alimentation Couche-Tard suffered significant losses with the onset of the pandemic. However, its recent earnings report shows that the company is well positioned to become a viable recovery bet for Canadian investors. Trading for $48.58 per share, the undervalued stock boasts significant long-term growth potential.
As fellow Fool Chris MacDonald recently pointed out, several factors could be contributing to the company’s growth:
- The company has a strong financial position to carry out mergers and acquisition deals that can boost its long-term growth.
- Opening new locations as economic activities return to normalcy could boost its cash flows.
- The company’s data-driven approach towards merchandising and marketing could offer it rapid growth momentum as the economy reopens.
- The sharing of essential company practices among various countries to boost productivity and sales can contribute to its growth.
The company has been using these strategies to perform well for a long time. Assuming that these strategies remain in play for a long time, Couche-Tard stock investors could be in for massive upside.
The onset of the pandemic resulted in people spending more time at home. With fewer people driving their cars, the number of people frequenting gas stations declined drastically. The changing situation led to Couche-Tard failing to perform as well as it had before the pandemic.
However, the possibility of economies reopening and a return to relative normalcy make Couche-Tard an ideal stock pick if you want to bet on a post-pandemic recovery asset. Considering the rapid spread of the Delta variant, investors could be in for more short-term pain, but the stock shows all the signs of long-term recovery and growth.
If you want to invest in a stock with long-term and significant growth potential, Alimentation Couche-Tard stock could be an ideal asset to add to your portfolio.
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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC.