Down 30% From Highs: Is This TSX Growth Stock a Screaming Buy?

This TSX stock may be down now, but don’t count it out. With plenty of growth opportunities already underway, now might be the time to buy.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 17, 2025 4:20 pm EDT

| More on: PKI

Investors often watch stocks that have fallen significantly from recent highs, considering these declines as potential buying opportunities. and they’re right. Even though the market can be a volatile place, over time, the overall market trends upwards, and that makes some stocks primed for the picking.

One such stock on the TSX is Parkland Corporation (TSX:PKI). The energy company certainly looks like it’s taken a beating, but this could lead investors to grab hold of a stock while it’s on sale. Today, let’s explore their recent performances to assess if they might be worthwhile additions to your portfolio.

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The numbers

Parkland is a leading convenience store operator and fuel retailer in Canada and the Caribbean. As of writing, the TSX stock is trading at approximately $31.50, down from its 52-week high of $45.00. This marks a decline of about 30% at the time of writing.

In its fourth quarter of 2024, Parkland reported sales of $7.2 billion, a decrease from $8.1 billion in the same period of 2023. Net earnings for the quarter were $127 million ($0.73 per share), compared to $471 million ($2.68 per share) in the same period of 2023. Adjusted earnings stood at $106 million ($0.61 per share), down from $230 million ($1.31 per share) in the same period of 2023.

The TSX stock’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter was $431 million. A decrease of 26% compared to the same period in 2023. This decline was largely due to lower refinery margins in the third quarter of 2024 despite strong operational execution.

Future outlook

Parkland’s trailing 12-month available cash flow was $627 million ($3.58 per share). This was a decrease of 16% from the same period in 2023. Cash generated from operating activities was $1.49 billion ($8.51 per share). A decrease of 25% from the same period in 2023. These declines were largely due to the unplanned shutdown of the Burnaby Refinery in the first quarter of 2024 and lower refining margins in the third quarter of 2024.

Despite these challenges, Parkland continues to focus on its growth strategy. The TSX stock improved its market share and is now the second-largest fuel and convenience retailer in Canada. The JOURNIE loyalty program contributed to a 1.4% same-store volume growth and a 12% increase in private label business. Additionally, Parkland successfully launched alcohol sales at 80 sites in Ontario, with plans to expand to 120 sites by year-end.

Bottom line

Parkland Corporation may have experienced declines from 52-week highs. Yet its focus on growth initiatives, such as the JOURNIE loyalty program and the introduction of alcohol sales in Ontario, shows promise. Yet, the decline in net earnings and adjusted EBITDA highlights the challenges within the industry. Investors are advised to perform comprehensive due diligence, considering the TSX stock’s fundamentals and the broader economic landscape, before making any investment decisions. Yet if you’re looking for growth over the next years with a valuably priced stock, Parkland could belong on your watchlist.