It’s never good to dwell on stocks that you could have bought, especially since you’d be judging yourself in a different climate. Buying the dip sounds like a pretty easy strategy on paper, but when you’re actually looking to do so when there’s nothing but fear in the headlines, you might just freeze up and walk away with nothing until the broad stock market actually starts marching higher again. Indeed, that’s why I’m no fan of timing the market, even if you’ve had some success in trading over the near term in the past.
At the end of the day, bull markets, bear markets, and sideways markets are very different environments. And investors who might struggle to navigate the markets may wish to take a longer-term approach, especially when the bear starts to roar, and corrections don’t experience swift V-shaped bounces. I have no idea if we’re in the early innings of a bear market and what shape of a rebound we’ll be in for once the bottom is hit (maybe the bottom is already in? Only time will tell).
Instead of overly focusing on the day-to-day (it’s hard not to, given the headlines coming out of the Middle East these days), I’d encourage investors to think about the next five to eight years. In this piece, we’ll check out a trio of names that might be great bets this April.
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Alimentation Couche-Tard
Alimentation Couche-Tard (TSX: ATD) stock stands out as a great bet after the extremely choppy moves made so far this year. While shares of ATD may have hit a ceiling after a failed breakout attempt, I still think that the name has the stage set for a big breakout rally, even if the rest of the market remains upset. Why?
The stock has simply become too cheap at 19.5 times trailing price-to-earnings (P/E) relative to the longer-term growth opportunity. Of course, gas prices are soaring, and that leaves less disposable income to spend at the convenience store.
On the surface, it seems like ATD stock is a loser in this climate, when fuel prices are through the roof. Still, things aren’t so simple. Just ask the company’s CEO, Alex Miller, who recently noted that “times of volatility historically have almost always been positive.” Indeed, sometimes it’s harder to gauge consumer sentiment than you think.
Who knows? Maybe soaring oil prices may incentivize consumers to fuel up before prices have a chance to really take off. Also, let’s not forget about the company’s ability to buy a fellow convenience chain on weakness, especially for the firms out there that aren’t managing the oil shock as well as Couche-Tard. In my view, Couche-Tard is more of a defensive staple than most give it credit for.
Restaurant Brands International
Restaurant Brands International (TSX: QSR) is finally having its breakout moment, and there might still be room to run as the firm behind Burger King, Tim Hortons, and Popeyes Louisiana Kitchen looks to power higher. The firm reinvented the Whopper and has introduced hit products, like the Supreme Stack, over at Tim Hortons.
As the firm looks to double down on value, I think there’s no stopping the fast-food icon, especially given the global expansion runway. Now that it has gotten the whopper right, I think there’s a world of opportunity to replicate the success as the firm looks to keep raising the growth ceiling. With a 3.4% yield and a modest 28.9 times trailing P/E, I’d not shy away from the fast-food icon, especially as it shows signs of outmuscling some of its rivals.
