The Motley Fool

The Best Canadian Stock to Buy This Week

investment research
Image source: Getty Images

Motley Fool investors seem to love reading about lists of great stocks. However, that leaves little opportunity to dig into some of the top companies out there. Today, I’m going to focus on the best Canadian stock that Motley Fool investors should watch this week.

What happened?

This week, analysts have been upgrading stocks after earnings reports. Yet today, there was really only one standout that can hold the title of the best Canadian stock to buy this week. And that’s Spin Master (TSX:TOY).

Spin Master stock recently reported another strong earnings performance this month. The company recently saw revenue climb 39% year over year to US$390.8 million for the quarter. Earnings per share doubled what analysts predicted at US$0.40 and was a substantial improvement on the loss of $0.09 EPS the same quarter a year before. Finally, it also improved on a loss the year before to report adjusted EBITDA of US$81.8 million.

A lot of the improvement came from the rise in global shipments, which were up 20%. Because of this, digital games and a new PAW Patrol film, the company raised its revenue guidance.

So what?

Now all of this was then reflected in the company’s share price increasing. And that increase climbed to what analysts predicted — around $50 per share. So, now that the company is at fair value, you might be questioning why it’s still the best Canadian stock to buy this week.

There are a few reasons for this. The company’s financial results proved that a recovery is already underway for Spin Master stock. Motley Fool investors may be paying fair value now rather than premiums later. And there are a few other reasons why this increase should remain quite stable.

Analysts cite an economic recovery, including the child tax credit, kids back in school, parents still working from home, and, of course, holiday promotions with the retail recovery for an increase in industry growth. This also includes the rebound in the film industry in the case of Spin Master stock, with films now back in theatres!

Now what?

For Motley Fool investors looking for a long-term hold on the best Canadian stock, now is the time. You can pick up shares today just below fair value at $49 per share as of writing. The P/E ratio isn’t a deal at 32.75, but it isn’t exorbitant either. Meanwhile, shares are up 70% in the last year and climbing. And analysts predict another 20% could be on the way, despite trading at fair value right now. On top of that, earnings per share are predicted to skyrocket by 193% this year alone!

Spin Master stock has been excellent in finding new opportunities, driving revenue growth in the process. With an economic recovery underway, it hasn’t slacked in acquiring and joining new businesses. The digital gaming industry alone exploded during the last two years. So, investors wanting to buy up a stock and hold on forever would do well to consider Spin Master stock. It could be the best Canadian stock you buy not just this week but this year!

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Spin Master Corp.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.