This month is the best time to rebalance your stock portfolio because the Canadian stock market has a clearer direction. The Bank of Canada has started its interest rate-cutting cycle, and it’s a massive tailwind for stocks if one or more cuts follow toward year-end 2024.
If the objective is to boost overall returns, Bombardier (TSX: BBD.B), Athabasca Oil (TSX: ATH), and KITS Eyecare (TSX: KITS) should be on your shopping list. These three TSX stocks are hard to ignore because they have endured market volatility since last year and are rapidly climbing this year.
Operational predictability
Bombardier is on a bull run. The 2023 TSX 30 winner (rank 13 of 30 top growth stocks) advanced 64.5% in the last six months. At $84.67 per share, current investors delight in the 59.12% year-to-date gain. This $8.27 billion business jet manufacturer is attracting investors’ attention for its robust service revenues and growing aircraft orders.
In the first quarter (Q1) of 2024, total revenues and net income declined 11.84% and 174.55% year over year to US$1.3 billion and US$110 million. However, Bombardier sold 60% more jets than in Q1 2023, resulting in a backlog of up to $14.9 billion. With the 20 aircraft deliveries, the company is on track to reach its planned guidance for 2024.
“Building our backlog, growing recurring income streams, and retiring debt have all been staples of Bombardier’s solid performance and our first quarter of 2024 delivered on all three very positively,” said Éric Martel, president and chief executive officer (CEO) of Bombardier.
Management believes the sustained demand for Bombardier aircraft and healthy backlog provides significant operational predictability.
Operational momentum
Athabasca Oil is rising and outpacing the energy sector (+17%). At only $5.21 per share, this mid-cap stock is up nearly 25% year to date. The $2.91 billion energy company develops thermal and light oil assets in the Western Canadian Sedimentary Basin, where it owns an extensive land base.
In Q1 2024, total sales (petroleum, natural gas, and midstream) increased 7% to $311.1 million versus Q1 2023, while operating income and cash flow from operating activities rose 46.2% and 273.2% year over year to $105.1 million and $76.6 million.
According to management, the impressive quarterly results showcased Athabasca’s continued operational momentum. Furthermore, the inaugural buyback program has commenced, and production growth is underway with the facility expansion at Leismer, its cornerstone asset.
Consistent revenue growth
Kits Eyecare flies under the radar, but the gains have been stellar. At $9 per share, the year-to-date gain is 44.23%, while the trailing one-year price return is 89.87%. The $283 million Vancouver-based company is a vertically integrated eyecare provider. This small-cap stock is a strong buy following six consecutive quarters of revenue growth.
In Q1 2024, revenue increased 26% year over year to a record $34.8 million, while net income reached $100,000 compared to the $1 million net loss in Q1 2023. Its co-founder and CEO, Roger Hardy, said, “We witnessed strength across our business as we saw all product categories and geographies outperforming the broader market.”
KITS will present the second quarter results early next month, although the preliminary results show a 25% revenue growth. In the week ending June 22, 2024, the eyecare brand reported record-breaking sales of $3.2 million.
No-brainer buys
Bombardier, Athabasca Oil, and KITS Eyecare are no-brainer buys for growth investors. The thriving businesses could sustain the stocks’ outperformance and drive prices higher.
