What started out as a strong year for the Canadian stock market has turned into a wild ride for investors. The S&P/TSX Composite Index was up close to 5% within the first three months of the year but has been gradually declining since then. The market as a whole is currently down roughly 5% year to date.
Volatility has been a major investing theme this year. Whether it’s been from rising interest rates or inflation, or geopolitical concerns, there’s been no shortage of uncertainty in 2022. As a result, short-term movements in the stock market have been completely unpredictable.
The uncertainty this year has created a lot of opportunities for long-term investors. Those willing to endure short-term volatility could be in line for massive gains over the long term.
The TSX is full of high-quality stocks trading at bargain prices right now. I’ve reviewed three top picks that long-term investors would be wise to have on their watch lists this holiday season.
Brookfield Renewable Partners
For anyone that’s bullish for the long term on the rise of renewable energy, now is the time to invest. Investors can have their choice on the TSX of discounted green energy stocks.
At a market cap of close to $25 billion, Brookfield Renewable Partners (TSX: BEP.UN) is a leading Canadian renewable energy provider. The company also boasts an international presence, offering its global customers a range of different green energy solutions to choose from.
Shares are down close to 20% year to date and 40% below all-time highs set in early 2021. It’s been a steady trend downwards for close to the past two years for the energy stock. Still, shares have more than doubled the returns of the broader Canadian stock market over the past five years.
In addition to a long-standing, market-beating track record, Brookfield Renewable Partners pays an impressive dividend. At today’s stock price, the company’s dividend yields 4.5%.
There aren’t many companies on the TSX with a market-beating track record like that of Brookfield Renewable Partner that’s also yielding above 4%.
Air Canada
Still largely feeling the effects of the COVID-19 market crash, now could be a very opportune time to invest in Canada’s largest airline.
Air Canada (TSX: AC) quickly dropped more than 70% in early 2020. Shares are up from their lows of the COVID-19 market crash in 2022 but are still nowhere near pre-pandemic price levels.
We’ve already begun witnessing the rapid rise in demand for travel in 2022. I firmly believe it’s only a matter of time before Air Canada is back to outperforming the market’s returns.
Shopify
It wasn’t long ago that Shopify (TSX: SHOP) was by far the largest stock on the TSX. But after dropping close to 70% in 2022 alone, the tech stock has long since given up that number-one spot.
The tech sector as a whole has had a rough year in 2022, which is partly to blame for Shopify’s performance this year. The business has seen revenue growth slow in its most recent quarters, but there’s still loads of growth potential to be bullish about in the coming years.
After a few dominant years of market-crushing gains from when Shopify joined the TSX, its high price seems to have finally caught up to the stock, providing long-term investors with an excellent entry point.
Shopify stock is up close to 40% since early October, though. If you’re looking to pick up shares at a discount, you may want to act fast.
