TSX stocks continue to trade on a mixed note in July, despite largely positive corporate earnings. However, some stocks continue to outperform the broader market by a wide margin due to their improving fundamentals. Here are five of such TSX stocks to buy today, as I expect them to continue rallying in the coming months.
TFI International stock
TFI International (TSX:TFII)(NYSE:TFII) is a North American logistics and transportation services giant based in Saint-Lauren, Canada. Its stock has been surging for the last more than five quarters in a row.
While the pandemic-related operational difficulties took its revenue down by nearly 3% last year to US$3.8 billion, TFI international’s revenue growth trend has already started significantly improving this year. That’s one of the reasons why its Q1 earnings jumped by nearly 25% YoY (year over year) to US$0.77 per share. As the businesses across North America continue to reopen, TFI’s revenue growth is likely to accelerate further. This justifies why its stock has risen by nearly 15% in July, despite no significant change in the TSX Composite benchmark for the month.
Alimentation Couche-Tard stock
Alimentation Couche-Tard (TSX:ATD.B)(TSX:ATD.A) is a well-known convenience store operator with its presence in nearly 26 countries and territories. Its stock is currently trading at $49.15 per share with about 13.3% year-to-date gains — including nearly 8% gains in July so far.
Despite a weak sales growth trend, Alimentation Couche-Tard’s adjusted earnings jumped by nearly 50% in its fiscal year ended in April 2021. The company posted a solid 26% YoY sales growth in the April quarter after it fell in the previous four quarters due to the pandemic-related challenges. Overall, its robust business model, consistent earnings growth, and expanding store network make Alimentation stock worth buying right now.
George Weston stock
George Weston (TSX:WN) is a Canadian company with its presence in a range of businesses, including grocery, pharmacy, apparel, general merchandise, and financial services. Its stock could be a good pick for conservative investors looking to diversify their overall portfolios.
While Weston’s revenue growth in segments like food and drug is improving, its properties business also continues to deliver solid financial performance. It could be the reason why its stock has risen by 31% this year. I expect the sales growth in its other business segments to also significantly improve in the coming quarters, as the pandemic fears gradually subside.
Analysts expect Shopify’s outstanding sales growth rate to drop in the coming quarters. But it still is likely to remain much stronger than most other tech companies. Its consistently growing sales and earnings amid strong demand for its services make SHOP stock really attractive to buy today, despite its 44% year-to-date gains.
Thomson Reuters stock
Thomson Reuters (TSX:TRI)(NYSE:TRI) is known for its consistently stable financial performance, even in difficult times. The company’s growing legal professionals’ business is also helping it expand its profitability. Interestingly, this segment accounted for over 40% of TR’s total revenue last year.
Thomson Reuters is likely to report higher YoY revenue growth in 2021, as the rising economic activities boost the demand for its products and services. The company is focusing on technologically upgrading its products portfolio, including by shifting to the cloud. Such steps are likely to attract more organic growth to its key business segments in the coming years. While its stock has risen by nearly 7% in July so far, it still looks attractive for long-term investors.
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.
The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.