It’s a pretty scary time to be a growth investor, with shares of higher-multiple names starting to show fragility, especially those in the tech sector. Undoubtedly, we’ve heard a lot of new AI (think agentics) news of late, which seems to have caused more anxiety and panic-selling (think in the software industry) than euphoria and optimism.
Combined with the conflict in the Middle East, it should be no surprise as to why investors aren’t quite ready to back up the truck on the many names that have fallen so rapidly out of favour. With broad markets continuing their recovery into mid-April despite the blockade in the Strait of Hormuz and higher oil prices, which could eventually add a spark to inflation, there is a slight sense of optimism.
After things failed to work out between the U.S. and Iran over the weekend, it felt like the week to come would be incredibly painful. And while Monday’s session saw pain at the open, it did not take all too long for the dip-buyers to step in.
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Staying the course amid growing geopolitical fears
Of course, things might not be getting much better geopolitically, but it really does feel like investors are far more hopeful that things will resolve before any sort of worst-case scenario (maybe stagflation?) has a chance to play out. As the Federal Reserve and Bank of Canada look to pause and reconsider, perhaps so, too, should investors, as they look to keep investing despite the scary headlines that continue to come in.
In any case, staying the course could prove wise as the market rebound continues and investors look to become a tad less fearful. After the sell-off in software, perhaps it’s time to go bargain hunting, provided you’re willing to ride the rest of the volatility out going into the summer.
So, what are the “best” stocks to buy if you had an extra $1,000 or so? That’s a good question. Personally, I think there are a lot of fantastic deals to consider. And while it’s tough to pick “deals,” I do think that the following name stands out when it comes to risk/reward.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) is starting to get really inexpensive again after plunging close to 3% last week. Indeed, gas prices might be going up again, but that’s no reason to hit the sell button, especially given the company’s longer-term strategy with fresh and hot foods.
Of course, there’s still a lot of work to be done as the firm improves its food offering over at the local Circle K. Arguably, some of its rivals south of the border, from Wawa to Sheetz to Buc-ee’s, are miles ahead when it comes to food. Whether it’s fresh subs made in store, pizza, or brisket sandwiches, I think it’s clear where Couche-Tard needs to go next.
In any case, I think the pressure on the consumer won’t take away from Couche-Tard’s generational tailwinds as it looks to expand its footprint, perhaps with a major acquisition up its sleeves at some point over the coming 18 months. The firm has the money to spend and a synergy-driving M&A engine that could really get roaring again. For now, shares go for 19.1 times trailing price-to-earnings (P/E), which undervalues that growth engine, at least in my view.
The only massive question mark with ATD stock is when the next big deal will happen.
