2 Stocks to Buy as a Part of a Santa Rally!

Restaurants Brands International (TSX:QSR)(NYSE:QSR) and Agnico Eagle Mines (TSX:AEM)(NYSE:AEM) are great TSX stocks I’d buy ahead of a Santa rally.

| More on:
stocks rising

Image source: Getty Images

Even as the TSX Index continues marching higher once again following a turbulent start to the month, investors should be cautious when it comes to the high flyer, including those that seemed unfazed by the recent Omicron variant-driven bout of volatility. Indeed, valuation always matters, and with markets shrugging off fears about the new variant and its potential to cause further disruptions to the economy’s ongoing recovery, fear and panic seem be replaced by optimism — perhaps too much optimism, with markets bouncing back at a rate nearly faster than it pulled back in the back half of November.

Undoubtedly, it’s hard not to be sanguine now that Omicron is starting to look less benign than originally expected. Early data suggests the variant is more infectious but less virulent. With that, full lockdowns in America (and Canada) seem less likely today than just one week ago.

With Omicron jitters now out of the way, it looks like Santa Claus may finally come to town for markets. As optimism and greed begin to replace fear and panic, investors may wish to proceed with cautious optimism, scooping up the undervalued bargains that remain while trimming at the names that have become too frothy.

In this piece, we’ll concentrate on two solid Canadian stocks that I believe could have much room to run should the broader TSX finish off the year with strength. Indeed, the holidays are closing in, and with that, the Santa rally could propel many names across the board after a past quarter that can only be described as somewhat choppy.

Consider shares of Restaurants Brands International (TSX:QSR)(NYSE:QSR) and Agnico Eagle Mines (TSX:AEM)(NYSE:AEM).

Restaurant Brands

Restaurant Brands International is a fast-food powerhouse that may have walked away with one of the biggest bargains of the year with the acquisition of lesser-known sandwich shop Firehouse Subs in a deal worth US$1 billion. Coincidentally, the other firm also mentioned in this piece, Agnico Eagle, also acquired an incredible asset for a deal that could prove to be too low.

Indeed, Firehouse Subs may not be known to those outside of the brands’ operating markets. Still, there’s a lot to love about the expansion potential. Indeed, Firehouse Subs resembles more of a Quiznos than a Subway. Indeed, talks between Restaurant Brands and Subway were rumoured to have fallen through, likely due to the price tag, which would have been quite hefty.

Firehouse Subs is a more bite-sized acquisition that could unlock new growth pathways. Indeed, Restaurant Brands already has its hands full with its trio of brands in Tim Hortons, Popeyes, and Burger King. But with a fourth brand that’s a great complement, I think QSR stock and its long-term growth profile are severely undervalued. After another year of weak results, I think Santa could be kind to the fast-food firm, as Omicron fears subside and reopening comes back into focus.

Agnico Eagle Mines

Agnico Eagle Mines is a gold producer that reached an agreement to combine with Kirkland Lake, another top-notch producer with magnificent assets. Indeed, Agnico Eagle has been feeling considerable pressure thanks to the recent weakness of gold prices, which I view as temporary, given inflation could persist for longer.

Gold has likely flopped due to Bitcoin and its status as millennial gold. Once crypto goes into its next cyclical decline, gold could shine again. Until then, Agnico is a deep-value play that should not go ignored, especially for metal-light portfolios that could use an inflation-fighting jolt.

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 Joey Frenette owns Restaurant Brands International Inc. The Motley Fool owns and recommends Bitcoin. The Motley Fool recommends Restaurant Brands International Inc.

More on Investing

Upwards momentum
Investing

This Growth Stock Has Market-Beating Potential

Are you looking for stocks with market-beating potential? Here’s my top pick!

Read more »

A colourful firework display
Tech Stocks

Nuvei Stock is on Fire This Year: Is it a Good Buy Today?

Nuvei stock (TSX:NVEI) is down about 85% since pandemic highs, falling 39% after earnings. So, what now?

Read more »

money cash dividends
Dividend Stocks

2 Dividend Stocks for Passive Income

Both of these dividend stocks are good sources of long-term passive income. They also currently trade at good valuations.

Read more »

Business success with growing, rising charts and businessman in background
Investing

3 Growth Stocks to Invest $6,500 in Right Now

Have you invested $6,500 into the stock market this year? You could be missing out. Find out why!

Read more »

Gold bars
Metals and Mining Stocks

Is It Time for Gold Stocks to Shine?

Investors can consider buying gold mining stocks such as Barrick Gold if they believe precious metal prices will surge higher.

Read more »

A bull outlined against a field
Tech Stocks

Prediction: These 2 Stocks Could Skyrocket in the Next Bull Market

Are you looking for stocks that could skyrocket in the next bull market? Here are two top picks!

Read more »

Volatile market, stock volatility
Tech Stocks

2 Tech Stocks On Sale in This Latest Tech Sell-off

Constellation Software (TSX:CSU) and Lightspeed Commerce (TSX:LSPD) went on sale in the latest tech sell-off.

Read more »

Close up shot of senior couple holding hand. Loving couple sitting together and holding hands. Focus on hands.
Dividend Stocks

These 3 Canadian Dividend Stocks Are a Pensioner’s Best Friend

Are you a pensioner looking for dividend stocks to add to your portfolio? Here are three top picks!

Read more »