Many top stocks from the TSX deserve a place in virtually every Canadian portfolio, regardless of how the market is performing. However, there are times when these stocks simply become more attractive because of their valuation, price discount, or momentum.
In contrast, there are selective stocks that may not be right for every investor at any given time but might be experiencing a strong positive trend that makes them attractive right now.
NFI Group (TSX:NFI) specializes in developing zero-emission vehicles (ZEV), primarily buses and coaches. Unlike other ZEV manufacturers that either lean towards electric vehicles (EVs) or fuel-cell-powered buses, NFI Group does both.
The company has already developed over 3,000 vehicles that are being used in 13 countries. It has also made hundreds of electrical charger installations to support EV bus fleets.
The company is a mature player in a budding market, and it’s operating at a fraction of its full capacity. It has the capability to produce about 8,000 ZEV buses/coaches in a year. So, once the trend of electrification in public sector fleets like school buses or public transportation gains more traction, NFI might be front in line to win and successfully execute these contracts.
The stock has been going up (unsteadily) since April, and if this is the beginning of a long-term bullish trend, you should consider riding it. Its EV/to sales is quite encouraging, and as per some experts, it’s still trading below its target price.
Most tech stocks are currently experiencing a steady bullish trend, and Open Text (TSX:OTEX) is no exception. The stock has grown over 30% since the beginning of the year and has climbed over 10% in the last 30 days alone.
It may be getting more attention than its peers from the tech sector because of its artificial intelligence (AI) potential. As an information management company, Open Text is better positioned than many others to incorporate AI tools into its platform in a meaningful way.
Even though it may seem more attractive this month, Open Text is a solid pick at any given time, especially if you are buying it for the long term. It’s one of the few tech companies that offer dividends and is even an aristocrat. This enhances its overall return potential. One problem some investors may (rightfully) have with this stock right now would be its overvaluation, though it’s a common theme in the tech sector.
Alimentation Couche-Tard (TSX:ATD) is counted among the largest convenience store chains/companies around the globe. It has over 14,000 stores in 24 countries, though the largest footprint is in North America. There are three brands under the Alimentation brand, but the bulk of its presence is tied to Circle K stores and fueling stations.
It’s a powerful growth stock that has returned over 580% to its investors through price appreciation alone. The dividends are not nearly as impressive, but they push the overall returns even higher. While this year hasn’t been bad for the stock, the growth wasn’t really consistent.
The stock made a modest climb and then remained stagnant for months. However, it has steadily been going up for the last few weeks, and it may be a good time to add this to your portfolio.
- We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Alimentation Couche-Tard made the list!
The three stocks may make good additions to your portfolio this month, but all three of them deserve more than a short stretch to prove their worth.
Alimentation and Open Text are blue-chip stocks that are healthy long-term picks considering their fundamental merits and not just their temporary momentum. NFI Group is a promising prospect that may be on the verge of exploding.