3 No-Brainer Stocks to Buy Before a Bull Run

Are you bullish on the stock market momentum this year? Here are a few growth stocks you might want to buy to make money from the bull run.

| More on:
A bull outlined against a field

Image source: Getty Images.

The TSX Composite Index is showing some correction after a Santa Claus rally in the last two months of 2023. The market has been range-bound since June 2022, as rising interest rates divided investors’ attention to the bond market. However, 2024 will see interest rate cuts that could reverse the trend and revive discretionary stocks. The market bull run will depend on the timing of the interest rate cut. 

Three no-brainer stocks to buy before a bull run

Nobody can time the market with accuracy. However, macroeconomic indicators like interest rates and inflation can help you make an educated guess in which directions some sectors will move. I have identified three growth stocks that fell due to economic weakness. They have the potential to ride the bull and generate more than 20% return in a year. 

HIVE stock 

Risk-averse investors might not think HIVE Digital Technologies (TSXV:HIVE) is a no-brainer stock. But if you carefully look at the stock’s fundamentals, its Bitcoin inventory and graphic processing unit (GPU)-powered data centres have limited its downside at $4. Bitcoin is the most stable cryptocurrency, and as we have observed in the last three years, BTC prices move in tandem with the economic scenario. 

If you are bullish on the economic recovery, BTC prices will likely increase, driving the stock price of Hive. Moreover, the artificial intelligence (AI) frenzy has just begun. Many big companies hesitated to invest huge amounts in advanced technology amid business uncertainty. A recovery in the business environment could attract investments in these projects. Plus, the 5G rollout could pave the way for AI at the edge. And Hive is offering digital cloud computing services for developers tapping this momentum. 

Hive is a stock worth buying at $4-$4.5 and selling at $8-$8.5 for short-term profits. If you are in it for the long term, $4-$4.5 is a good entry point, and the exit point would be another crypto bubble when the stock surges past $20. 

Magna stock

Magna International (TSX:MG) stock has dipped 18% since February 2022, as high material prices and semiconductor supply shortage disrupted supply and rising inflation and interest rates slowed demand. The growth of electric vehicle (EV) sales slowed in 2023, but there is still demand for lightweight vehicles. Countries are building EV infrastructure, and automakers are lowering the prices of EVs to boost adoption. 

Magna moves with the automotive trend as a supplier of power, vision, and body exteriors to top automakers. It has been building EV power terrain and components for autonomous cars. As a supplier, Magna is a cyclical stock that will jump when EV demand picks up. 

The best way to make money from cyclical stocks is to buy in the downcycle and hold. It may not give positive returns for a few years. However, when the cycle turns, the stock could grow 50-80% within two to three months, making up for the years of wait. While you wait for the upcycle, you can enjoy a 3.4% annual dividend. 

Air Canada 

Air Canada (TSX:AC) is a no-brainer stock to buy ahead of the bull run. You have seen the last two year’s momentum. The same momentum is likely to be repeated this summer. The airline stock is trading closer to $18 price despite improving net income. Air Canada is likely to report strong 2023 earnings in early February that could push the stock into a bull momentum. The summer of 2024 could see the return of leisure travellers. Although the growth will slow because of a strong base year, easing oil prices could keep Air Canada’s profits upbeat. 

However, the stock has been range-bound since the pandemic, as the airline diluted shareholders’ interest by issuing new equity shares to raise capital. Hence, a good exit point for this stock would be $24.5, as it could fall after crossing this mark.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Bitcoin and Magna International. The Motley Fool has a disclosure policy.

More on Investing

An airplane on a runway

Air Canada Stock: Too Much Turbulence or Time to Buy?

Air Canada stock is a high-risk stock that might be too volatile to consider investing in right now.

Read more »

question marks written reminders tickets
Stocks for Beginners

Where Will Aritzia Stock Be in 3 Years?

Aritzia (TSX:ATZ) stock may have come down from all-time highs, but a new CEO and renewed U.S. focus makes it…

Read more »

edit Sale sign, value, discount

The Market Is Being Too Hard on These Growth Stocks Going for a Discount

These three growth stocks look like excellent buys, given their higher growth prospects and discounted stock prices.

Read more »

Retirement plan

3 Stocks I’m Adding to my Retirement Account in March

Well Health Technologies, Cineplex, and Fortis each have their own strengths that make them good buys for retirement planning.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.

Worried About a Market Collapse? Here Are 2 Stocks That Could Beat a Bear Market

Stocks have risen at a fast rate in 2024. Are you worried about a sudden market collapse? Here are two…

Read more »

stock research, analyze data
Dividend Stocks

Is it Too Late to Buy Dollarama Stock?

Dollarama (TSX:DOL) stock is up almost 200% from its 2020 lows. Is it still a buy?

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

Down by 25%: Is Canadian Tire Stock a Buy in February 2024?

Take a closer look at this Canadian retail stock if you are looking for low-cost additions to your self-directed portfolio…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Cash Kings: The Top 2 Canadian Stocks That Pay Monthly

Two Canadian stocks are cash kings to income investors for their generous dividends and monthly payouts.

Read more »