The new year could give way to new themes in the stock markets. Last year’s winners could become less impressive in 2024. And the lesser-loved firms sagging for most of 2023 could stand really tall for 2024. As Tax-Free Savings Account (TFSA) investors begin to move beyond just their favourite baskets of mega-cap tech stocks, I believe there’s ample opportunity for value investors to continue doing well in 2024, especially if the TSX Index has new all-time highs in its sights.
For the new year, we’ll go through three intriguing stock picks that I think could do well from here. The names didn’t really fare well last year. But a new year and a new slate could change their fortunes. Without further ado, let’s check out the following two value picks that may be worth one’s attention.
Canada Goose Holdings
Canada Goose Holdings (TSX: GOOS) is the firm behind the iconic Canada Goose parkas that go well above $1,000. Indeed, it’s a luxury product that could really boom once times are good again and consumers are ready to spend big money. In the meantime, it’s hard to find anyone who’s a huge bull on the firm after the stock’s multi-year slump. The Goose remains one of the untimeliest investments out there, with economic hardships (recession?) that could be coming to Canada as soon as a few quarters from now.
It’s hard to believe, but GOOS stock has lost over 82% from its value from its peak. Despite expanding the strong brand into new products, the appetite for the latest and greatest Canada Goose items just hasn’t been booming. As horrid as GOOS stock’s descent has been, I believe a turnaround could be just as explosive.
Indeed, I have no idea when Canada Goose will come flying back. But once the world economy has a chance to recover further, I think Canada Goose’s global expansion could help the stock return to $30. Could GOOS stock be a double? Potentially. But there’s a lot of risk associated with the $1.62 billion luxury apparel firm. If you can stomach volatility and are bullish on the long-term prospects of the economy, it may make sense to pick up a few shares.
BMO Covered Call Canadian Banks ETF
BMO Covered Call Canadian Banks ETF (TSX: ZWC) is an unorthodox way to give your passive-income stream a good shot in the arm! In essence, the ZWC provides exposure to Canada’s big bank stocks, with the added benefit of the “covered call” strategy, which foregoes a bit of upside potential for premium income added on top of an already yield-rich security.
So, why buy the covered call version of the bank exchange-traded fund? The banks are in a bit of a rut right now, with pressure likely to continue through the new year. If the banks are going to be range-bound, it’s arguably a better idea to trade some upside for some more income. At writing, shares yield 7.75%. That’s massive. But do note the slightly elevated 0.72% management expense ratio (MER) will subtly eat into your returns.
If you’re a TFSA passive income investor who wants to bet on the banks but doesn’t view them as table pounders, the ZWC just makes sense, in my opinion.
