With the advent of low (or even no) trading commissions and partial shares for those who want to own a piece of high-priced stocks but can’t afford the price of admission for a single share, it’s never been easier for new, smaller retail investors to get started in the investing game. Indeed, depending on your broker, you may or may not have access to such affordable trading.
Either way, beginner investors who haven’t yet signed on with a brokerage may wish to put in a bit of homework beforehand so that they can keep trading commissions at a minimum. Indeed, the days of $9.99 trades seem to be numbered.
In any case, as the trading costs continue to decline, I think a huge door is opening up for those with a rather small (think less than $1,000) cash allocation to buy their very first stock. In this piece, we’ll check in on one growth stock that I believe could make for a terrific first pick-up for any long-term-focused investor focused on appreciation potential over the next 10–20 years or more.
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Couche-Tard: A great first stock for new investors
At current levels, shares of Alimentation Couche-Tard (TSX:ATD) are going for just shy of $73 per share. With a $250 sum to invest, that’d buy you three shares (or three and a half if you’re able to pick up partial shares).
And if the commissions are minimal (or non-existent), I do think Couche-Tard stock is a fantastic first stock for young Canadian investors. The convenience retail business is fairly easy to understand, and it’s unlikely to change in too profound a manner in the next decade.
Of course, that doesn’t mean the Circle K owner won’t experience significant transformations moving forward. As electric vehicles (EVs) grow in numbers on the roads and AI becomes more commonplace in the world of retail, Couche-Tard will need to react accordingly and adapt with the times.
Readying for the new age, perhaps with an elephant-sized deal in hand?
Arguably, the company is already equipped to embrace the gradual EV rollout. And if the Quebec-based juggernaut can acquire 7 & i Holdings (the parent company of 7-Eleven), I do think the convenience store business could change for the better as vehicles transition to electric and even autonomous.
Given the profound technological shift that looms, I’d be very surprised if a successful 7-Eleven acquisition were to fall through. Recently, 7-Eleven shareholders sided with the management team in an attempt to resist the deal put forth by Couche-Tard.
It may pose another hurdle that further lengthens the back and forth. In any case, we’ll just have to wait and see what comes of the lengthy and now drawn-out pursuit, which could span another several months.
As shares of ATD continue to climb back after a brief fall into bear market territory (a 20% fall from peak to trough), I do think the stock is worth picking up at around 17.5 times forward price-to-earnings (P/E). A low price to pay, given Couche-Tard’s growth plan has staying power. And if it wins the right to buy 7-Eleven, I couldn’t be more bullish over the longer-term possibilities.
Just fasten your seatbelt as the 7 & i Holdings pursuit enters its latter innings!
