The 2023 stock market got off to a great start, with the S&P 500 rising 8.16% in the first four months of the year. After a steep 2022 bear market, investors started getting interested in stocks again. A big part of why stock prices fell last year was because central banks, like the Federal Reserve and Bank of Canada, raised interest rates.
This year, the Bank of Canada has paused its rate hiking, while the Fed signaled that it may do so at its next meeting. So, the rate hiking is slowing down, and stocks are rising once more.
In this article, I will explore three Canadian stocks that have gained in the relatively investor-friendly environment we entered this year.
Kinaxis
Kinaxis (TSX:KXS) has been rallying hard ever since it announced its artificial intelligence (AI) ambitions. The company develops supply chain management software that helps businesses manage their inventory. Let’s say, for example, you have a business building and selling bicycles. In order to give your customers the bikes they need at the right time, you’ll need the right supplies of handlebars, rims, seats, and frames at the right times. With Kinaxis, you can track trends in customer behaviour to help you predict how much raw material and inventory you’ll need, and when.
Kinaxis has been developing this kind of software for a long time — for 39 years, in fact! What’s relatively new is the use of AI in the software. The use of AI at Kinaxis allows the companies’ clients to get speedier and more accurate insights into their supply chains. It appears to be working, as the company delivered a 28% increase in SaaS revenue in its most recent quarter.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) is another Canadian stock that has been rallying hard lately. Over the last 12 months, it has risen 13%, which is a stronger rise than was observed in the TSX as a whole.
Why is Alimentation Couche-Tard doing well lately?
As a retailer, it benefits from the overall strength being observed in the economy. Canada’s economy has been doing pretty well lately, with low unemployment, and lower inflation than what’s being observed in the U.S. and Europe. Still, there’s been just enough inflation that ATD has been able to raise the prices it charges in its gas stations, which has been more than enough to offset the relative weakness in the price of gas being sold outside at the pumps.
CN Railway
Canadian National Railway (TSX:CNR) is a Canadian rail stock that’s up 13% over the last 52 weeks. The company’s stock is one of the most popular Canadian names among international investors, being widely owned by top U.S. investment managers.
CN Railway stock has been doing well lately, because the company has been doing well. In its most recent quarter, CNR delivered strong growth in revenue and earnings, both of which exceeded analyst expectations. The company also said that it expected strong results in the months ahead. It was a vote of confidence in a company that has increasingly become an indispensable component of North America’s economy.
