Finding companies with unanimous buy ratings can be hard in this current economy. Even the best operators in the market can be viewed as overvalued from time to time, with analysts traditionally focusing not only on which companies have the best long-term growth prospects, but how their long-term growth trends are likely to play into future price appreciation (or lack thereof).
There happen to be a number of top Canadian stocks which analysts continue to pound the table on that I also think are worth considering as long-term investments. Here are three of the most pertinent picks which I think could have very material upside over the long-term.
Cargojet
A dominant player in the Canadian overnight air freight market, Cargojet (TSX:CJT) is a company with rare monopoly-like pricing power in the Canadian market.
As the chart above shows, investors haven’t necessarily been impressed by the company’s underlying profitability and growth prospects, at least for the past few quarters. Some of that sentiment makes sense, given that pressures on the consumer (and overall package growth) in the Canadian market have come down, as economic pressures pick up.
That said, the company’s dominant market position in what is likely to be a very lucrative sector (assuming overall e-commerce growth continues as it has for decades) makes this stock an intriguing beaten-up pick worth considering at sub-$100 per share, at least in my books.
GFL Environmental
Another intriguing stock with a near-unanimous strong buy rating (I did see two “holds” on this name recently, in part due to this stock’s incredible long-term performance) is GFL Environmental (TSX:GFL).
Shares of GFL stock have been all over the place, though this is a company with a five-year return of more than 110%. Thus, despite a recent flattening out of share price growth, I do think long-term investors may benefit from at least looking at whether this share price stagnation is worth buying into or not.
The waste management giant is one of a few serving the Canadian market, and with similar oligopoly-like pricing power to Cargojet, as well as a strong history of acquisitions of smaller players in regional markets, I think this is a growth stock that could be well-positioned to take off in the coming years.
If interest rates remain low, and GFL can continue to produce market-beating growth, this is a stock that should see share price appreciation over time. It’s really that simple.
WELL Health Technologies
Certainly the most speculative pick on this list, WELL Health Technologies (TSX:WELL) is a compelling option for Canadian investors looking for exposure in the private healthcare sector (which is hard to find in Canada).
WELL Health has a unanimous buy rating among the four analysts that cover this name, with many honing in on the company’s relative undervaluation particularly when compared to global peers. Indeed, I’d argue that Canadian investors don’t often look at the healthcare sector at all (cannabis stocks and other healthcare adjacent names have flown off the radar of late). And with the country’s public healthcare system, there’s not typically much to see here.
But WELL Health’s defensive exposure to a sector investors may not be paying very close attention to provides a potential buying opportunity in my books. If the company’s telemedicine platform can continue to take off and grow its global footprint, analysts could certainly be right on this pick.
