It doesn’t take a whole lot of effort to beat the TSX Index consistently over time. Indeed, beating the S&P 500 or Nasdaq 100 exchanges is another question. While the TSX Index has lagged behind the U.S. indices in recent years, thanks in part to a relative lack of hot tech and artificial intelligence (AI) plays, I still think the TSX is a good benchmark to aim to top. Indeed, with so many energy and financial stocks comprising the index, the TSX is less likely to gain on the back of red-hot technological trends such as AI.
Indeed, energy and financials may benefit mildly from productivity gains from the rise of generative and predictive AI. However, I believe that the lack of tech exposure destines the TSX for gains that are less than ideal. That’s why Canadian investors should seek to pick their own stocks so that they’re properly diversified and positioned to capitalize on a technology that could be the biggest in our generation.
New investors seeking growth stock bargains for their TFSA need to deal with volatility
Indeed, AI is retreating fast, following some ugly earnings reports from some top AI plays in the U.S. market. I think the selloff will eventually overextend to the downside. And when it does, it’s the dip-buyers that may just walk away with some of the best bargains. In this piece, we’ll check out two intriguing growth stocks that I believe can help improve your TFSA’s odds of topping the TSX.
Of course, you will need to have a stronger stomach, as the latest hint of choppiness may be just the start of a violent downswing that could last for the rest of the year. Investing was never meant to be easy or fun, though. When it is, you may not be getting the best prices for admission into your stocks.
These days, when everyone seems to be worried about a recession, an AI tech bubble burst, or something else, there’s a greater chance of scoring a nice discount on various well-run firms whose stocks are unjustly punished.
In any case, here is one intriguing stock worth keeping on your radar on the way down.
Alimentation Couche-Tard
Shares of Quebec-based convenience retail firm Alimentation Couche-Tard (TSX:ATD) actually held their own on Friday’s freaky session that saw the Nasdaq 100 shed around 2.7% of its value. Indeed, the latest jobs data was not good, nor were some of the numbers revealed by big-name AI high-flyers. That said, ATD stock rallied close to 2% on the day, likely on the back of news that Seven & I Holdings (the Japan-based parent company of 7-Eleven stores) rejected Couche-Tard’s massive bid.
Indeed, I have no idea if the deal will ever happen. Arguably, the price of admission offered by Couche-Tard was already hefty. Only time will tell where the proposed acquisition goes next. Given the value-consciousness of Couche’s managers, I’d not be too surprised if they end up walking away from the deal altogether.
For Couche stock, that could mean the losses put in since the potential 7-Eleven deal news broke could be recouped in record time. Given ATD stock’s mere 0.9 beta (entailing less market risk) and a mere 20.2 times trailing price-to-earnings (P/E) ratio, the name looks like a steal right now.
