As we inch closer to the end of 2021, let’s take a look at three stocks that remain attractive long-term bets at current prices. Shares of companies such as Barrick Gold (TSX:ABX)(NYSE:GOLD), Aritzia (TSX:ATZ)and HubSpot (NYSE:HUBS) are well poised to deliver market-beating gains in the next 12 months. Let’s see why.
One of the largest Canadian companies trading on the TSX, Barrick Gold is valued at a market cap of over $40 billion. However, it’s currently trading 30% below its 52-week high, making the stock an attractive bet for contrarian investors.
One fundamental way in which a gold miner differs from the commodity it mines lies in the ability to grow via expansion. If you own a gold coin, the potential upside is limited to the increase in the prices of gold. But companies such as Barrick Gold should benefit from higher commodity prices due to rising profits, which can then be reinvested to fund expansion plans.
Barrick Gold is a global mining giant and owns 14 gold mines and three copper mines. In 2020, the company delivered 4.8 million ounces, allowing Barrick to generate US$12.6 billion in sales. Barrick’s management expects gold deliveries to average around 4.5 million ounces each year. It ended Q2 with US$5.1 billion in cash, providing Barrick with enough liquidity to tide over volatile commodity prices as well as a sluggish macro environment.
Barrick Gold also generated US$3.5 billion in free cash flow last year, enough to pay down interests as well as increase dividend payouts to investors over time.
A company that designs and sells apparel as well as accessories for women in North America, Aritzia is valued at a market cap of $5.44 billion. Aritzia increased its sales from $743 million in fiscal 2018 to $980 million in fiscal 2020 that ended in February. In fiscal 2021, sales fell to $857 million due to the ongoing pandemic. Despite these fluctuations in the top-line, Aritzia has managed to return close to 180% to investors since its initial public offering in 2016.
The high-end design house is well poised to deliver market-beating returns to investors in the future as well. Aritzia’s net revenue increased by 74.9% year over year to $350.1 million while e-commerce sales rose by 48.7% to $130.4 million in the fiscal second quarter of 2022, which ended in August. The company’s retail sales almost doubled to $219.6 million and were 13.8% higher compared to the same period in Q2 of 2020, which shows it achieved double-digit sales growth compared to pre-COVID-19 levels.
A high-growth SaaS-based tech stock, HubSpot has gained a monstrous 2,600% since its IPO in 2014. HubSpot has successfully expanded its portfolio of products over the years, allowing it to grow its top-line at an annual rate of 36% since Q2 2017. The customer relationship management platform ended Q2 of 2021 with a customer base of 121,000, 30% of whom use more than three HubSpot products.
HubSpot sales are estimated to rise from US$883 million in 2020 to US$1.63 billion in 2022. Its adjusted earnings per share are also forecast to almost double from US$1.32 in 2020 to US$2.44 in 2022. The company has forecast its total addressable market at US$87 billion, providing it with enough room to keep expanding its top-line in the upcoming decade.