The Bull Case for Why Cargojet Stock Could Outperform

Here’s why long-term growth investors may want to give Cargojet (TSX:CJT) stock a hard look as we enter the fall.

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The company financials and fundamentals of Cargojet (TSX:CJT) certainly don’t seem to be quite bright. Indeed, Cargojet stock is one I’ve been downright bearish on in the past. And for good reason.

However, there is certainly a bullish argument to be made for this company. As a leading player in the Canadian air cargo space, Cargojet has enjoyed monopoly power for some time. Accordingly, this is a company that has navigated (with relative ease) the turbulence of the pandemic.

Currently, Cargojet stock has approximately doubled from March 2020 lows. This has led many growth investors to consider the potential for this stock to continue to outperform as the economy reopens.

Let’s dive into why Cargojet stock can potentially outperform this year.

Amazon partnership to boost company’s long-term growth

Cargojet is a major overnight cargo service provider in Canada. The air cargo player announced in 2019 that it will be entering a strategic partnership with e-commerce giant Amazon. Unsurprisingly, since then, this stock has taken off.

Why?

Well, this deal positioned Cargojet stock as a top growth play for long-term investors. Indeed, CJT has lived up to these expectations.

According to this agreement, Amazon became an equity holder of Cargojet stock. The said deal is expected to continue to substantially increase air cargo volumes in the coming years.

With e-commerce maintaining its global demand, even as the pandemic subsides, Cargojet is the only meaningful air freight service provider to turn to in Canada. Needless to say, CJT stock comes with great potential for long term growth.

Moreover, Cargojet has been consistently focusing on developing and upgrading its fleet for the past few years. This will definitely help the company explore new routes for revenue and income growth while expanding its operational efficiency.

Bottom line on Cargojet stock

Analysts remain quite bullish on Cargojet stock for good reason. This is a company that has continued to post impressive growth and a bullish long-term outlook. The strategic partnerships Cargojet has engaged in provide for an impressive long-term growth outlook. Cargojet’s robust core business, strong growth potential, and dominance in the e-commerce sector are some of the major factors that should convince long-term investors to dive into this stock.

With operations expanding across 16 Canadian cities, Cargojet provides overnight delivery service to over 90% of Canada’s population. The Amazon deal will allow bolstering its international expansion.

Overall, CJT is a stock that could very well outperform in the long run.

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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool owns shares of and recommends Amazon and CARGOJET INC. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. Fool contributor Chris MacDonald has no position in any stocks mentioned.

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