Three TSX stocks fly under the radar or are invisible to investors’ eyes. However, if you want to make a fortune, consider taking positions in Bombardier (TSX: BBD.B), Black Diamond Group Limited (TSX: BDI), or Valeura Energy (TSX: VLE). Performance-wise, all three have market-beating returns thus far in 2023.
Real growth plan
Bombardier has advanced 11% in the last 30 days, raising its year-to-date gain to 31.6%. At $68.78 per share, the total return in three years is 547.3%, which translates to a compound annual growth rate (CAGR) of 86.3%. Had you bought 1,454 shares ($15,267) in April 2020, your money would be worth $100,006.12 today.
The $6.5 billion aerospace company aims to achieve US$9 billion in revenue and US$900 million in free cash flow (FCF) by 2025. While the financial targets appear ambitious, a credible plan for real growth is in place, according to its CEO, Eric Martel.
Martel said, “There is some added volatility and uncertainty in the markets today.” He admits there’s a bit of turbulence but only in the short term. However, he is confident that fundamentals remain very strong in the long term. Market research firm IMARC Group projects the global business jet market to reach US$23.7 billion by 2028.
Management’s primary focus is on the flourishing business jet market, where it expects to reduce Bombardier’s debt load significantly. Furthermore, the EBITDA guidance for 2025 has increased to more than US$1.6 billion. However, higher costs will likely offset higher plane prices and services.
Diverse specialty rental platform
Industrial stock Black Diamond operates in the rental and leasing services industry, and two core business segments contribute to the revenues of the $401.5 million company. Modular Space Solutions provides modular space rentals to customers in various industries.
Meanwhile, Workforce Solutions provides workforce housing solutions in Canada, Australia, and the United States. Besides accommodations, the segment rents out surface equipment and provides turn-key lodging and travel management logistics services in Canada.
The business is thriving, as evidenced by the financial results last year. In 2022, profit climbed 29% to $26.4 million versus 2021 despite the 4% year-over-year decline in revenue to $324.5 million. Management said the diverse specialty rental platform delivers steadily growing, predictable rental revenues. At $6.65 per share (+38.1% year to date), Black Diamond pays a modest 1.2% dividend.
High-growth energy stock
The energy sector is in a slump due to falling oil prices, but not Valeura Energy. At only $3.26 per share, the obscure but high-growth stock is up 56% year to date versus the TSX’s 6.8% gain. Moreover, the total return in three years is 879.7% (113.8% CAGR).
The assets of this $295.1 million upstream oil and gas company are in the offshore Gulf of Thailand and the Thrace Basin of Turkey. Last year, the net loss improved to US$13.6 million compared to US$66.4 million in 2021.
According to its President and CEO, Sean Guest, 2022 was a year of genuine transition for Valeura. He said the business evolved and shifted its focus to Southeast Asia. The company now owns a significant portfolio of cash-generating assets.
Fortune-makers
People hardly talk about Bombardier, Black Diamond, or Valeura Energy. However, these hidden stocks are potential fortune-makers in 2023 and beyond.
