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3 Top Canadian Stocks to Buy Before Summer Ends

Christopher Liew, CFA | August 17, 2021| More on:

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Canada’s primary stock market index has posted four straight weeks of gains after closing at 20,518.10 on August 13, 2021. The TSX’s all-time high is 20,554, achieved only two trading days earlier. Besides strong corporate earnings, higher energy and petroleum products prices could be why the index edged higher again.

For growth investors, three Canadian stocks are worth buying before summer ends. Jamieson Wellness (TSX:JWEL), Village Farms International (TSX:VFF)(NASDAQ:VFF), and Alcanna (TSX:CLIQ) are potential multi-baggers that could fill your pockets with considerable capital gains.

Positive growth opportunities

Health and wellness aren’t a growing trend anymore. It’s now firmly entrenched in the consciousness of everyone due to the pandemic. Jamieson Wellness should benefit significantly from this changing consumer behaviour for years to come. In Q2 2021, the $1.39 billion company reported an 18.6% and 91.7% increase in revenue and net earnings.

Mike Pilato, Jamieson’s president and CEO, said it was another outstanding quarter of growth across the business. Because of the impressive earnings growth, management increased the quarterly dividend (20%). The current share price of the manufacturer of natural health products is $34.96, while the dividend yield is 1.72%.

Jamieson expects to end fiscal 2021 with an annual growth of between 7.8% and 10.2%. The positive business outlook stems from the continuing strong growth in domestic brands. However, management said a strong Canadian dollar would impact the volume growth of international brands.

Future long-term market leader

At $11.17 per share, Village Farms is down 13.34% year to date. Nonetheless, market analysts recommend a strong buy rating. They forecast an 85.89% potential return, as the federal legalization of marijuana in the U.S. draws near. Pure Sunfarms, a 100%-owned premier cannabis supplier, is the primary growth driver.

The specific goal is a 20% market share in the domestic dried flower market. While the net loss in the first six months of 2021 ballooned to US$11.7 million compared to the US$492 net income in the same period in 2020, the 54% increase in total sales is noteworthy.

Village Farms, through Pure Sunfarms, aims to be the long-term market leader in Canada’s cannabis market. If you want exposure to the cannabis sector, this vertically integrated greenhouse grower has a competitive advantage over the bigger industry players.

Value segment strategy

Alcanna flies under the radar, although it deserves to be on your watchlist. On July 14, 2021, national cannabis retailer Nova Cannabis graduated to the TSX. Alcanna is the majority owner of Nova. This $244.02 million company has a strong position in liquor retailing and should soon win a significant share of the cannabis market.

Management’s advocacy is the art of responsible retail, especially in highly regulated controlled substances. Alcanna combined its retail cannabis business with YSS Corp. to form Nova Cannabis. The goal is to replicate Alcanna’s success in capturing the value segment in Alberta’s liquor retail market.

In Q1 2021 (quarter ended March 31, 2021), Alcanna’s net earnings grew exponentially to $47.6 million compared to the $9.3 million net loss in Q1 2020. Like Village Farms, Alcanna is well positioned for the cannabis market. Nova Cannabis should deliver massive profits in a couple of years.

Substantial capital gains

The one thing in common with Jamieson Wellness, Village Farms, and Alcanna is the long growth runway. All three are screaming buys before summer ends. The capital gains in the near term should be substantial.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Village Farms International Inc and Village Farms International, Inc.

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