It’s been quite the year, with some companies finally making a comeback after falling dramatically since the pandemic. While some have climbed back from the depths, others have sunk as fears of a recession loom over the globe.
Today, let’s look at the best- and worst-performing stock so far in 2023 and see if there’s an opportunity to be had or if it’s time to get out.
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Best performing: Shopify stock
Shopify (TSX:SHOP) takes the top spot as the best-performing stock year to date on the TSX today. Shares of Shopify stock are up 77% year to date, with several jumps leading to an increased share price for the company.
The e-commerce stock started rising after reaching lows in the fall of 2022. Since then, several announcements led to an increase in share price. Most recently, this has included earnings that beat out estimates for yet another quarter. Furthermore, the company went through another round of layoffs, letting go of 20% of its workforce, mainly among management.
Shopify stock also announced the sale of its logistics business to Flexport for a 13% stake in the company. On top of all this, the company stated that after years of growing too much, too soon, it was time to get back to basics.
In that sense, Shopify stock is now renewing its focus on its e-commerce business. The company is seeking to lock up online merchants from small to enterprise level. It’s also looking to get in on the point-of-sale (POS) action that has been so successful with peers.
For now, Shopify stock remains a hold by many analysts, with one even recommending it as a sell at this point. After hitting 52-week highs, more interest rate hikes on the way, and continued higher inflation, it could be that Shopify stock might see another drop in the near future. That being said, should that happen, it could be a good time to get back in on the stock that still remains down compared with all-time highs.
Worst performing: Northland Power
Here’s where things get interesting. Northland Power (TSX:NPI) has been the worst-performing stock on the TSX today. Year to date, shares are down 27%, as of writing for the clean energy producer. However, analysts may believe that this means there is a strong opportunity for long-term investors.
In the near term, costs have surged for items associated with Northland stock. Whether it’s the infrastructure used to create its offshore wind farms or the costs of borrowing to expand its business, investors in the near term haven’t been impressed with Northland stock — especially as it fell below estimates during its most recent earnings report.
Yet analysts believe the recent decision to walk away from a joint venture is positive. There is now additional cash coming in that should cover the company’s 2023 equity funding gap, according to analysts. There are also fewer equity needs without a joint venture on the table for next year, and NPI stock continues to deliver future growth in both assets and cash flow.
While that’s perhaps on the lower end now, given the rising costs across Canada and the world, there is still value for long-term investors. NPI stock is a strong buy recommendation across the board from analysts, trading at 9.91 times earnings and with a 4.4% dividend yield. And now, with a 48% upside to reach the consensus target price, it’s a major bargain as well.
