Yes, you heard right. There are some volatile stocks to hold in the market. The perfect storm of market conditions in 2022 has created a unique environment, whereby some volatility can really go a long way towards boosting your portfolio.
Here are two such examples to consider buying now while the market is still volatile.
Nuclear power is increasing in popularity
Cameco (TSX: CCO)(NYSE: CCJ) was one of the most beaten-down stocks of the past decade. In the aftermath of the Fukushima disaster in 2011, uranium prices bottomed out and took the demand for nuclear power along for the ride.
As one of the largest uranium miners on the planet, this left Cameco in a rough spot. It was left mining a product that nobody wanted and was rapidly declining in price. By way of example, prior to Fukushima, uranium traded for nearly US$60 per pound. Today, that market has recovered, and the uranium spot price is just over US$47.
So, apart from the boost in uranium prices, where exactly does that volatile opportunity lie?
While there are several points to note, one of the biggest is the transition to renewables. Utilities are scrambling to transition away from fossil fuels to renewable energy. Soaring oil prices are also contributing to that growing need. By comparison, nuclear energy is clean and incredibly efficient.
This is feeding the demand for nuclear energy, and, by extension, the uranium fuel that Cameco mines. In fact, there are currently over 50 reactors under construction around the world, and nearly another 100 are planned. An additional 300 reactors are in various stages of early planning and approval.
Turning to Cameco’s stock price, it’s soared nearly 20% year to date. Despite those gains, there’s still plenty of long-term potential as one of the volatile stocks to hold.
Turning to results, in the most recent quarter, Cameco reported $558 million in revenue. This reflected an incredible 55% increase over the same period last year. Overall, the company earned $84 million in the quarter, bettering the $37 million loss in the same period last year.
In short, Cameco is an intriguing long-term option to consider as part of a much larger, well-diversified portfolio.
Volatile stocks to hold: Private jets?
Another company that has struggled over the past decade is Bombardier (TSX: BBD.B). After selling off much of its non-core holdings over the past years, Bombardier now runs a leaner, profitable operation.
The core business that remains is Bombardier’s private corporate jet arm. This includes both the wildly popular and successful Global Express and Challenger lines of jets.
Coincidentally, both jet lines underwent massive refreshes over the past few years, and both received rave reviews and full order books. In fact, the Global Express 7500 has broken several records for distance and speed.
So then, what is that opportunity for investors?
Market volatility and the prospect of a recession have brought fresh uncertainty around the market for private jets. That being said, Bombardier’s results for the most recent quarter painted a somewhat different picture. The company made 28 aircraft deliveries in the quarter, resulting in revenues of $1.6 billion. Additionally, Bombardier’s backlog hit $14.7 billion as of June 30.
Overall, Bombardier reported a net loss of $38 million for the quarter, but this paled in comparison to the $137 million loss reported in the same period last year.
So, things are improving for Bombardier, but is there another opportunity for investors?
The answer to that would be yes. Bombardier revised its guidance for the rest of 2022 recently, lowering its forecasts greatly. Specifically, revenues of $6.5 billion on 120 deliveries dropped to just 49 deliveries and $2.8 billion in revenue.
This led to a stock selloff. Also within the sphere of recent updates is Bombardier’s recent reverse stock split.
In short, Bombardier, which now trades at just over $33 per share, now sits down over 20% year to date. Is Bombardier volatile? Sure. Could the shares go down further? Yes.
But, perhaps most importantly, is there an opportunity for long-term investors? Absolutely.
