Why This TSX Stock Popped 13% on Friday — and Why I’m Buying!

Big Rock Brewery Inc. (TSX:BR) is one TSX stock that has defied the market pullback. Here’s why I’m targeting other stocks in this category.

| More on:
Shelves holding drinks bottles

Image source: Getty Images.

The S&P/TSX Composite Index was down 436 points in late-morning trading on January 24. Investors must be very selective to score with stocks in this volatile environment. Today, I want to look at one TSX stock that surged to close out the end of the previous week. Let’s jump in.

Why this TSX stock spiked last week

Big Rock Brewery (TSX:BR) is a Calgary-based company that produces, markets, and distributes craft beers, ciders, and ready-to-drink beverages. Shares of this TSX stock climbed 13% on Friday, January 21. Meanwhile, its shares were up 2.6% in a brutal day on the markets today.

On January 14, Big Rock Brewery announced that its chief financial officer (CFO) was set to resign effective February 11. On the brighter side, the company would dip into more appealing news in the next week. On January 18, it unveiled a new collaboration with Balzac’s Coffee. It set out to brew a breakfast stout using specialty roasted coffee beans.

Investors can expect to see Big Rock’s final batch of fiscal 2021 earnings on in March. In Q3 2021, sales volume fell 6% to 47,367 hectolitres. However, net revenue rose to $13 million compared to $12.8 million in the previous year. Meanwhile, adjusted EBITDA decreased 52% year over year to $1.3 million. Moreover, net income dropped 77% to $0.2 million, or $0.03 per share.

Shares of this TSX stock are still trading in very favourable territory compared to its industry peers. Moreover, it is geared up for solid revenue growth going forward.

The alcohol industry is worth targeting if you are worried about volatility

Canadian investors may want to target equities in the alcohol industry, as market volatility has picked up. An economic pullback may not be far behind, as countries continue to struggle with the COVID-19 pandemic, labour shortages, and a supply chain crisis. Alcohol sales have increased significantly in Ontario during the COVID-19 pandemic. Meanwhile, consumption has increased among about a quarter of the population, according to a recent survey by Statistics Canada.

Investors should consider exposure to the alcohol industry, as economic uncertainty has reared its head in early 2022. Big Rock Brewery is one option. However, investors should also seek out companies that produce wine and spirits.

Here’s another TSX stock I’d consider today

Corby Spirit and Wine (TSX:CSW.A) is a Toronto-based company that manufactures, markets, and imports spirits and wines. I’d suggested that investors snatch up this TSX stock back in March 2021. Shares of Corby have been flat to kick off 2022.

The company unveiled its first-quarter fiscal 2022 earnings on November 10. Investors can expect its next batch of results in early February. Net earnings were up from pre-pandemic levels in the first quarter of fiscal 2020. Shares of Corby Spirit and Wine possess a favourable price-to-earnings ratio of 17. Meanwhile, it recently hiked its quarterly dividend of $0.24 per share. That represents a strong 5.7% yield.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns and recommends CORBY SPIRIT AND WINE LTD CLASS A.

More on Investing

Arrowings ascending on a chalkboard
Investing

5 Canadian Stocks That Have Gained Value Year to Date

Although many Canadian stocks have sold off this year, and by a significant amount, here are five that have actually…

Read more »

Filling up at the gas pumps.
Energy Stocks

Gas Prices Are Hitting Record Highs: 2 Stocks to Buy Now!

Buy Suncor Energy stock, Canada's integrated oil and gas giant that's benefitting immensely, as gasoline prices continue to soar.

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Bank Stocks

A Different Bank for a Comfortable Retirement

Want a comfortable retirement? Investing in this different bank today can help you reach that goal through a solid income…

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

Top Canadian Dividend Stocks to Buy and Hold for the Long Term

These Canadian companies have been paying dividends for more than four decades and have been consistently growing the same.

Read more »

thinking
Bank Stocks

Bank of Montreal (TSX:BMO) Raises Dividend: Is the Stock a Buy?

Bank of Montreal is about to get a lot bigger. Should you buy the stock?

Read more »

man window buildings
Investing

Where Do Economists Expect Canadian Housing Prices to Fall Most?

Canadian housing prices may be falling -- in some regions, more than others -- but there are still plenty of…

Read more »

Business success with growing, rising charts and businessman in background
Energy Stocks

3 Hydrogen Stocks Set to Become Major Multi-Baggers

These three hydrogen stocks could certainly achieve multi-bagger status in the years to come after they overcome the present-day hurdles.

Read more »

Technology
Stocks for Beginners

Starting an Investment Portfolio? Buy These 3 Stocks!

Interested in getting a start in the stock market? Buy these three stocks today!

Read more »