With the broader markets taking off to start the second trading week of 2024, investors who sold last week may be kicking themselves. Indeed, timing the market is virtually impossible. Oftentimes, one stands to miss out on glorious relief rallies by trying to avoid the market’s biggest slumps.
Even when almost everybody you hear on television is pessimistic about the market, you should hang on to your shares for the long haul. They’re not just pieces of paper to be bought and sold on the daily. They’re pieces of businesses that ought to be invested in for many years (or even decades) to grow your wealth.
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Airline stocks could fly in 2024
The airline stocks have been incredibly volatile through 2023. But 2024 could be the year they finally have the means to ascent toward cruising altitude. Indeed, Air Canada (TSX:AC) is the top Canadian airline of choice.
At $19 and change, the stock is hovering close to levels not seen since the aftermath of the 2020 stock market crash. Indeed, it’s been a turbulent ride for AC stock. And though shares have been a dud for recovery chasers in the more than three years following the COVID crash, I think that investors shouldn’t give up on the name, as 2024 looks to take air travel’s recovery to the next level.
Sure, a Canadian recession could be another thorn in the side of the top airlines. Regardless, long-term investors should be enticed by the risk/reward scenario offered at today’s modest prices. Year to date (that’s just north of a week for 2024), AC stock is actually up over 3%.
Meanwhile, cargo airline Cargojet (TSX:CJT) is up nearly 2%. Though a strong first week to the year is a good sign, investors should be ready to nibble away at any dips, given turbulence is pretty much a given when it comes to the top airline plays.
Air Canada
Air Canada stock trades at just 0.3 times price to sales (P/S) at the time of writing. If that’s not cheap, I don’t know what is. Though there are stiff challenges ahead in 2024, as Canadians look to put their wallets away in response to a potential downturn, I believe most of such headwinds may already be priced in. Indeed, when air travel was taking off for the summer, few folks would have thought AC stock would make a round trip (pardon the pun, folks!) back to the teens. Yet here we are, with the stock going for just north of $19.
I think the recent slide is a tremendous buying opportunity for investors willing to deal with excessive turbulence for the next two to three years. Yes, AC stock has been quite the dud for most investors in recent years.
However, the firm has made fundamental operating improvements that will carry over into the post-slowdown environment. As air travel gains again, perhaps for next summer, don’t count on Air Canada stock to be so quick to give back its gains.
Cargojet
As for Cargojet, the stock had a terrific finish to 2023. As consumers begin to spend a bit more, demand for overnight shipping services could increase, and CJT stock may just be able to make a run for the $150 level.
Personally, I think Cargojet is one of the growthiest mid-cap stocks ($2 billion market cap) on the entire TSX Index. It won’t be a smooth upward ride, but the stock looks intriguing for the growth oriented.
