Bank of Montreal (TSX: BMO) recently revealed its “Best of BMO” stock picks, and there were quite a few intriguing Canadian companies that made the cut. Undoubtedly, there’s still a lot of value, in my opinion, here on the Canadian index. With a weaker loonie and a potential peak in interest rates, 2024 may be a better year than expected.
So, for December 2023, let’s check out three of my favourite picks from BMO’s latest “best ideas” list of picks! Indeed, it was hard to pick just three, but the following, I think, may be able to put the TSX Index to shame.
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Cameco
Cameco (TSX: CCO) is a uranium company that’s one of the most capable in the world. The stock has been surging on the back of what can only be described as a nuclear energy renaissance. Indeed, the world needs more “clean” energy, and as more nations become open to unlocking the power of nuclear energy in a safe fashion, Cameco is one of the firms that could continue to benefit.
Indeed, the nuclear renaissance seems like a secular tailwind for the price of uranium. And though the stock has more than doubled in the past year alone, I think there could be more upside if more nuclear power plant projects are announced on a global scale. Though I wish shares were cheaper, I’m unsure if we’ll ever get a much better entry point, given the magnitude of tailwinds. My takeaway? Dollar-cost averaging may be the way to go if you’re keen on the name.
Air Canada
Up next, we have Air Canada (TSX: AC), a company that’s had a tough time getting off the tarmac since the 2020 stock market crash and COVID pandemic. At $18 and change, I think expectations are way too low. The decent summer travel season gains have vanished as the stock cooled in a major way for autumn. I have no idea when Air Canada will be primed for lift-off again, but at these depths, I view the stock as a deep-value play for investors who are bullish on a robust economic recovery at some point over the next two years.
Air Canada stock still looks untimely after all these years. This could change at the drop of a hat, though! If you have a long time horizon, it may be worth hanging on through the turbulence.
NFI Group
Finally, we have NFI Group (TSX: NFI), a bus maker that’s actually had a decent year, surging around 45% year to date. Though the rally has been impressive, the longer-term chart is still ugly. The stock’s still a country mile away from its 2018 peak, just shy of $60 per share.
Today, at nearly $14 per share, new highs seem a tad far-fetched. Regardless, it is encouraging that the firm is seeing the supply chain and liquidity fall into better order again. ATB Capital Markets analyst Chris Murray thinks the stock has “transitioned” to a “more conventional recovery story.” And I’m inclined to agree.
NFI is back. And an improving economy could take the rally into overdrive.
