The new bull market in the S&P 500 caught many overly pessimistic investors off guard when it kicked off in the back half of last year. Undoubtedly, it was not easy to be a buyer, with interest rates surging higher while concerns of a central bank-induced recession dominated the headlines. Earnings weren’t stellar, and it was becoming harder to justify valuations following the 2020-21 market surge.
These days, the bull seems to be incredibly strong, with the hardest-hit stocks of 2022 now up by considerable amounts. Doubt the sustainability of the current bull market, if you will, but I think it has legs to move higher in the second half, even though the pace may be a tad slower. Perhaps a stock market correction may hit at some point.
Regardless, Canadian investors shouldn’t look to avoid corrections, as they tend to hit when we expect it least! Instead, be prepared for markets to continue acting in unpredictable ways. Can a correction hit tomorrow? Sure, but can it continue moving higher before the next local peak? That’s also a possibility.
New investors: Don’t wait for the bull market to fall before getting started investing
So, instead of trying to time the market or pay too much attention to the state of the economy and what strategists see next for the TSX Index or S&P 500 over the short term, it seems wise to analyze stocks as though they are individual pieces of companies. Even if consumer spending takes a shot to the chin, not all companies are bound to fall accordingly. Some are better equipped to adapt to tough times than others. And some may even treat an economic downfall as an opportunity to gain ground over market rivals!
In this piece, we’ll check out two impressive growth stocks that I think could move higher as the bull run extends over the next 18 months. And if there’s a correction or bear market that catches investors off guard? Bright contrarians will be ready to buy even more shares at lower prices. If anything, investors should hope for such a pullback if they’re young or have excess liquidity lying around!
Restaurant Brands International
Restaurant Brands International (TSX:QSR) is a quick-serve restaurant company on the verge of a multi-year breakout. Today, shares are just over $100 per share, just about 4% away from its high not seen since August 2019. Though inflation and macro headwinds, QSR stock is fresh off one of its most pronounced rallies in recent memory. The stock’s up over 60% from its 2022 lows, and I think there’s more room to run, even if we encounter a recession over the next 12 months.
The company’s growth-focused investments are paying off. And I don’t expect management to take its foot off the pedal. Not with a strong quarter in the books for Burger King and its other brands. With a 2.9% dividend yield and a plan to grow over time, count me as a buyer of QSR on any dips. It’s growth that will be tough to derail!
The bottom line
Restaurant Brands has been one of the hottest TSX-traded fast-food stocks over the past year. Management is getting it right, and investors are being rewarded. Even with a recession, I find it hard to pass up on the fast-food gem right now while it gets its brands back on the growth track.