The “sell in May and go away” believers may be able to put a feather in their cap after a less-than-stellar month saw the S&P/TSX Composite Index steadily bleed value. As always, these periods of retreat also present a fantastic buying opportunity for the savvy and patient investor.
Today, I want to discuss how we should look to spend $10,000 in June 2023. Below are three of my favourite stocks to snatch up as we prepare for what will hopefully be a hot season for Canadian stocks. Let’s dive in.
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Here’s why I love Pet Valu for the long term
Pet Valu (TSX:PET) is a Markham-based company that is engaged in the retail and wholesale of pet foods, treats, toys, apparel, and accessories in Canada. Shares of this TSX stock have dropped 12% month over month as of close on Monday, May 29. The stock is now down 18% so far in 2023. Investors can see more of its recent performance with the interactive price chart below.
Recent analysis from Morgan Stanley projected that the pet industry would deliver a compound annual growth rate (CAGR) of 8% over the course of this decade. Indeed, pet ownership exploded during the pandemic and has fueled a significant sales bump for pet products and accessories. This is an industry worth getting excited about.
In the first quarter (Q1) of fiscal 2023, Pet Valu delivered system-wide sales growth of 18% to $339 million. Meanwhile, revenue increased 17% year over year to $250 million. Shares of this TSX stock currently possess a solid price-to-earnings (P/E) ratio of 23. Moreover, its board of directors last announced a quarterly dividend of $0.10 per common share. That represents a modest 1.2% yield.
Invest in the future with this promising TSX stock
ATS (TSX:ATS) is a Cambridge-based company that designs and builds factory automation systems. This stock has jumped 1.6% over the past month. Its shares have surged 40% in the year-to-date period.
The company released its Q4 and full-year fiscal 2023 results on May 18. In Q4 2023, revenue rose 21% year over year to $730 million. Meanwhile, adjusted basic earnings per share (EPS) rose to $0.73 compared to $0.60 in the previous year. For the full year, ATS achieved revenue growth of 18% to $2.57 billion and adjusted basic EPS growth of 3% to $2.57. Meanwhile, Order Bookings rose to $3.25 billion compared to $2.45 billion at the end of fiscal 2022.
This TSX stock is on track for strong earnings growth in the burgeoning factory automation space. There are few Canadian stocks that have been able to contend with its gains since the beginning of the decade.
One more stock to snag for the long term in June 2023
BRP (TSX:DOO) is the third and final TSX stock I’d look to spend what remains of our initial $10,000 in the late spring season. This company is engaged in the design, development, manufacture, distribution, and marketing of powersports vehicles and marine products in North America and around the world. Its shares have dipped 2.5% month over month. That has pushed the stock into negative territory in the year-to-date period.
In Q1 of fiscal 2023, BRP posted revenue growth of 36% to $330 million. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 8% to $79.0 million. Shares of BRP currently possesses an attractive P/E ratio of 9.3. It offers a quarterly dividend of $0.18 per share, representing a modest 0.7% yield.
