Amid the chaos in global stock markets due to the war in the Middle East, billionaires with deep pockets seem to be having a field day. There is plenty of attention on the TSX, with a few Canadian companies seeing shares being scooped up rapidly. People with that kind of money have access to information that many others might not.
You do not have to be a billionaire to invest like one. Granted, you cannot invest the same massive amounts in the market, but you can still align your capital allocation to the decisions that they make. Seasoned investors know that stock market volatility is the perfect time to buy undervalued gems with solid fundamentals in equity markets. This is the best way to maximize your chances of securing outsized returns.
Today, I will discuss three TSX stocks that seem to be in the crosshairs of billionaire investors right now.
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Cenovus Energy
The US-Israeli escalation of violence in the Middle East, with their attacks on Iran and the subsequent closure of the Strait of Hormuz, has disrupted global energy supply. That choke point accounts for transporting around a fifth of the world’s crude oil, especially from the Middle East. Cenovus Energy Inc. (TSX:CVE) and its peers in the Canadian energy industry might stand to benefit from the situation.
Higher oil prices mean better margins for producers in Canada, and Cenovus is an integrated energy company that fits the bill perfectly. Several big-ticket investors are investing in its shares amid a booming energy market. The company has been busy decreasing its debt load and selling off non-core assets. There may be plenty more room for growth in the coming weeks, and investing at the next downturn might be an excellent decision.
Canadian National Railway
Canadian National Railway Co. (TSX:CNR) is a company seeing attention from the likes of Bill Gates and other billionaires. CNR is the owner and operator of the largest and most extensive railway network in North America. It is responsible for transporting over 300 million tons of finished goods, manufactured products, and natural resources across North America each year. It connects the East and West coasts in Canada to the American Midwest and the US Gulf Coast.
Trade headwinds might cause short-term disruptions, but the dust will eventually settle. When it does, companies providing vital services will emerge stronger on the other side. CNR is a top dividend stock with an excellent track record of paying its investors their quarterly distributions for decades without fail. It has increased payouts for the last 30 years and is well-positioned to continue. This rail stock can be an excellent holding.
Brookfield
Brookfield Corp. (TSX:BN) is a $131 billion market-cap global investment firm that has a hand in pretty much every industry in the world. From Artificial Intelligence (AI) to renewable energy, real estate, infrastructure, and everything in between and beyond, Brookfield and its subsidiaries provide investors with exposure to some of the best infrastructure assets in global markets.
With over $1 trillion in assets under its management, a booming worldwide economy will send its shares soaring. As of this writing, it trades at $58.56 per share and is down 14.4% from its 52-week high. Some might say it is a good price point to invest in its shares. I think a further downturn driven by geopolitical factors could make it an even more attractive investment.
Foolish takeaway
Whether billionaires have an inside track can ultimately be irrelevant to seasoned investors who know where to look for undervalued gems with the potential to deliver outsized returns.
Cenovus Energy offers exposure to the energy industry to leverage the growing demand for Canadian energy products. Canadian National Railway provides a vital railway network across North America, and it will play an important role while hauling thousands of tons of goods in the region. Brookfield offers you diversified exposure to a piece of virtually every pie there is. For all three, I would wait for any pullback to become an investor myself and hold onto the shares for the long run.
