Investing in the stock market is not to be confused with taking unnecessary risks because it’s more about making informed decisions that could yield steady returns over time. Even if you have less than $1,000 to invest, it’s enough to start building a strong portfolio by selecting high-quality stocks with strong fundamentals and long-term growth prospects.
While the recent TSX rally has made it a bit difficult for investors to pick stocks with good upside potential, there are still opportunities available if you know where to look. In this article, I’ll highlight two such no-brainer Canadian stocks you can buy with less than $1,000 to start your investment journey.
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New Gold stock
New Gold (TSX:NGD) has continued to outperform the broader market by a wide margin for two consecutive years. This intermediate gold mining company manages mining operations and development projects in Canada, with Rainy River and New Afton being its primary assets. It currently has a market cap of $2.7 billion as its stock trades at $3.38 per share after rallying by 76% year to date.
The recent rally in New Gold stock could mainly be attributed to its consistently improving operational and financial performance, as well as its focus on growth projects. In the second quarter of 2024, the company’s consolidated production stood at 68,598 ounces of gold and 13.6 million pounds of copper. Despite a YoY (year-over-year) decline in its gold output, cost control measures and stronger commodity prices drove its quarterly revenue up by 18.3% from a year ago to US$218.2 million. More importantly, its adjusted net quarterly profit witnessed a solid 46.6% YoY increase to US$17 million.
At the Rainy River mine, New Gold expects the underground main zone to achieve the first ore by year-end, with a planned ramp-up to 5,500 tonnes per day by 2027. Similarly, commercial production from the New Afton mine’s C-Zone project is likely to begin in the second half of 2024. These growth projects are likely to expand NGD’s production capacity and boost its financial growth trends.
Air Canada stock
Unlike New Gold, Air Canada (TSX:AC) stock hasn’t seen any appreciation in 2024. In fact, despite a sharp financial recovery in the post-pandemic era, its share prices have been on a downward trajectory since 2020, making its stock look highly undervalued based on its long-term growth potential. The Saint Laurent-headquartered airline company currently has a market cap of $ 5.5 billion as its stock trades at $15.33 per share with 18% year-to-date losses.
Over the last 12 months, Air Canada’s revenue has risen by 9.6% YoY to $22.3 billion amid consistently improving air travel demand. As it also continues to expand capacity and maintain focus on minimizing costs, the Canadian flag carrier’s adjusted earnings during the same period have more than doubled to $4 per share.
Notably, during the COVID-19 shutdown phase, Air Canada discontinued flight operations on several less profitable routes and streamlined its operational network to focus on high-demand markets. However, as the demand for international travel strengthens, the largest Canadian passenger airline is planning to reintroduce its service offerings to several international destinations, which should accelerate its financial growth trends and drive its share prices higher.
