When you’ve only got $100 to invest, it can feel like you don’t have many options. But that’s not the case. In fact, one of the smartest things you can do with a small amount of money is look for a Canadian stock that’s temporarily out of favour, but still backed by a solid business. One such name stands out right now on the TSX, and that’s Air Canada (TSX:AC).
Why Air Canada
Air Canada is Canada’s largest airline. It’s the backbone of domestic and international air travel for millions of Canadians each year. And yet, the Canadian stock is still down by more than 60% from its highs before the pandemic. As of writing, the share price hovers around $18.91. That puts it within reach for nearly any investor.
The past few years have been rough. In 2020, travel demand collapsed. Flights were grounded, borders closed, and revenue dried up. Air Canada took on debt to stay afloat and suspended services to dozens of routes. It’s no surprise that investor confidence took a hit. But fast forward to today, and the skies are starting to clear.
Into earnings
In its most recent earnings report for Q1 2025, Air Canada posted revenue of $5.2 billion. That’s slightly down year over year but still a sign of strength given the season. Operating losses came in at $108 million, while net losses were $102 million. Those numbers sound big, but come in a period that’s traditionally weaker for travel. More importantly, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $387 million, beating expectations and showing that the core business is stronger than it looks at first glance.
Passenger volume grew, particularly on international routes and sun destinations. Canadians are flying again and heading overseas in greater numbers. To meet that demand, Air Canada is adding new routes in Europe and South America. It’s also upgrading aircraft and investing in customer service. These improvements help build loyalty and pricing power over time.
Why buy
So why is the stock still so low? For one, Air Canada doesn’t pay a dividend. That means income-focused investors tend to look elsewhere. It’s also part of the airline sector, which has always carried a reputation for being volatile. Add in high oil prices and geopolitical uncertainty, and it’s understandable why some might hesitate. But that’s exactly why this could be the perfect time to consider it.
You don’t need thousands of dollars to start investing in a great business. If you have $100, you can afford to buy five shares of Air Canada today. That might not sound like much, but it’s how many smart investors get started. Small amounts grow over time, and holding onto strong companies during periods of weakness is often when the best returns are made.
Bottom line
There’s no denying that risk remains. Air Canada still carries more than $11 billion in net debt. Fuel costs remain high. Labour talks are ongoing. But the big picture is this: the airline has weathered the worst, it’s adjusting to the new normal, and it’s slowly regaining altitude. If you believe that Canadians will continue to travel, Air Canada is going to be a major part of that recovery.
That’s what makes it such a smart buy right now for just $100. It’s not flashy. It won’t pay you dividends. But it gives you exposure to one of the most important parts of the Canadian economy. And it’s trading at a major discount. For long-term investors, it’s hard to find better value in the TSX right now. So while others sit on the sidelines waiting for perfect conditions, this might be the time to board early.
