Its IPO on May 2 returned early investors a staggering 163% during trading hours, but it has not stopped there. Beyond Meat has rewarded later investors by continuing to grow to its current price of $88.40 — a 253% increase from its $25 initial offering price. Although Beyond Meat’s stock is listed in the United States, Canadian-centric investors can still benefit through this ETF.

Value in vertical supply chain

Beyond Meat is not a retailer and therefore relies on independent grocery stores to sell its products. As such, shoppers will find its products being sold at Canadian consumer staples such as Metro (TSX:MRU) and Loblaw Companies (TSX:L) by the end of May. These two publicly traded companies can provide investors with a more direct and risky way to gain from Beyond Meat’s success.

Breaking down the ETF

The iShares S&P/TSX Capped Consumer Staples Index ETF is entirely comprised of stocks in the consumer defensive sector. This sector covers the likes of food, drink, household necessities to tobacco and educational services. Stocks in this sector are considered safe and less risky because of their stable dividends and earnings regardless of market conditions.

The rise of veganism in Canada should start to change this sector in the next couple of years, however. In 2018, it was reported that approximately 2.3 million Canadians identified as vegetarian or vegan — a whopping 10% of the population. This should change the selection of products that consumers find in grocery stores and may serve as tailwinds to companies that embrace the change.

This iShares ETF is positioned to take advantage of this growing market. Of its top 10 holdings, only Metro and Loblaw will be carriers of Beyond Meat products. The other eight companies, Couche-Tard (TSX:ATD.B), Saputo, George Weston, Empire, Cott, Maple Leaf Foods, Premium Brands Holdings, and North West Co. have yet to be named by Beyond Meat as retailers of its products.

Beyond just veganism

Besides the boost that Beyond Meat and other vegetarian/vegan food-processing companies will provide the stocks bundled into the iShares S&P/TSX Capped Consumer Staples Index ETF, its top three stocks are also fundamentally sound. Couche-Tard represents approximately 25% of its weight, while Metro and Loblaw Companies each represent approximately 15%.

The sector average price/earnings (P/E) ratio currently covers around 20, thus making Couche-Tard’s P/E ratio of 24.59 and Metro’s of 19.69 seem reasonable. Loblaw stock’s P/E ratio is approximately double the average at 45.61. This signals that investors expect higher future earnings or perhaps that the stock is overvalued. Fortunately, the ETF hedges against the risk of this individual stock by bundling others with it.

The post Take Your Own Bite From Beyond Meats’s (NASDAQ:BYND) Successful IPO appeared first on The Motley Fool Canada.

More reading

• 3 Blue-Chip Dividend Stocks for Canadian Investors
• The Best Canadian Stocks to Buy and Hold Forever in a TFSA
• The Absolute Best Canadian Stocks to Buy and Hold Forever in a TFSA
• The Sectors Where Canada Actually Beats the United States
• How Much Canadians Typically Have in a TFSA by Age 55

Major competition

Bombardier is best known for its manufacturing of commercial and business aircrafts in the aerospace sector. However, it also operates in the ground transportation sector by manufacturing metros, buses, and trains in both the Canadian and international markets. Bombardier has been a pioneer in the transition from diesel and gasoline-based transportation to electric and carbon-free transport. However, it is not alone in the competition for contracts.

Chinese transportation manufacturer CRRC plans to bid on numerous projects and is expected to undercut Bombardier’s pricing. The Chinese firm announced that it will be bidding on the Washington, D.C. metro project in its continued efforts to bolster its U.S. market share.

Washington’s newest underground project estimates to pay approximately $500 million to the most competitive bidder. This would present a potentially huge loss to Bombardier’s revenue if it is outbid by its Chinese rivals.

Losing the numbers game

Bombardier is not only losing in its efforts to win manufacturing contracts. Its latest financial results for the first quarter of 2019 prove Bombardier is also losing the numbers game. It is hard to find optimism with virtually all key financial metrics showing regression from last year’s first quarter. Revenues for all sectors of its operations are down 13%, with adjusted EBIT down 15% and cash flow from operating activities having decreased by a monstrous $436 million.

Although Bombardier cut its guidance for three of its four main operating industries, the ground transportation got the biggest slash. Initial 2019 revenue projections were aimed at $9.5 billion with an adjusted EBIT margin of 9%. Its revised 2019 guidance cuts these figures to $8.75 billion in revenues and an adjusted EBIT margin of 8%.

The big picture

These figures are enough to worry investors that Bombardier may be going through a significant decline. Even the macroeconomic environment has been unfriendly to the Canadian manufacturing giant. Bombardier announced it will be consolidating its manufacturing plants to North American locations as its sale of a northern Irish plant is completed due to Brexit.

The referendum of 2016 has taken a major toll on the industry in the United Kingdom and is forcing Bombardier out. This is a considerable downsize to accompany a weakening financial position.

What to take away

It is clear that Bombardier is a company to stay far away from. Its poor financial track record combined with its present consolidation of business and poor performance begs investors to look elsewhere for a strong investment.

The post Why You Shouldn’t Let Bombardier (TSX:BBD.B) Poison Your Portfolio appeared first on The Motley Fool Canada.

More reading

• 3 Canadian Stocks That Are Winning as the Loonie Falters
• Turnaround Stocks to Buy Now Before Everyone Else Sees Their True Potential
• The Best $10,000 TFSA Approach for Canadian Investors

Extendicare (TSX:EXE)

Extendicare is a long-term-care facilities and management company focused on senior care. With operations both in Canada and the United States, Extendicare boasts a market capitalization of $706.92 million across its network of 121 healthcare centres. This little-known stock employs approximately 23,000 workers trained in senior care and living under its three brands: Extendicare, Esprit Lifestyle, and ParaMed.

The macroeconomic trend of an aging population in Canada creates a strong market opportunity for this company. Its business sectors have a wide scope to capture the business opportunity created by the increase of Canadian seniors through its operations in nursing care, home care, retirement living, and management and consulting services.

It has seen strong growth since the start of 2019 with the stock trading from $6.49 on December 31 to today’s market open of $8.06. However, over a five-year period, the stock has remained relatively flat with only a 19% increase in price compared to the S&P 500’s increase of 55% over the same period.

By announcing the addition of private equity firm Sandpiper to its board of directors on April 22, 2019, Extendicare becomes a stock to watch more closely. It will be a point of interest for investors to see how it can find new ways to tap potential.

BELLUS Health (TSX:BLU)

BELLUS Health is a Quebec-based biopharmaceutical company focused on novel treatments for disorders related to hypersensitization, most notably therapeutics for chronic cough. Like Extendicare, it operates in a growing macroeconomic environment where approximately 26 million adults in the United States suffer from a chronic cough.

The selling point for biopharma companies are the monopoly-like patents on drugs or therapeutics. For BELLUS, this major competitive advantage comes in the form of its lead drug candidate, BLU-5937. Following its successful phase one clinical study, BELLUS expects to initiate its clinical phase two study in chronic cough patients by mid-2019, with top-line results anticipated in mid-2020. This should give investors a solid timeline on when to expect volatility in the stock.

BELLUS carries a market cap of $213.242 million with a negative beta of -0.03. This presents investors with an interesting opportunity to hedge against the market using this stock.

VieMed (TSX:VMD)

VieMed has an exciting outlook without creating much press. Its core business is conducted through two wholly-owned subsidiaries Home Sleep Delivered and Sleep Management. VieMed specializes in supplying home medical equipment to patients with post-acute respiratory diseases in the United States. VieMed, like its two previously mentioned counterparts, is also a beneficiary of the aging population.

As the largest independent specialized provider of non-invasive ventilation in the United States, VieMed boasts strong financial metrics to couple with its attractive industry growth opportunity. Investors have enjoyed a healthy 42% price growth in the past year and can remain positive with the industry growth opportunity being so attractive.

In the next 19 years, an average of 10,000 people will turn 65 on a daily basis. This will cause U.S. healthcare expenditures in the respiratory disease space to grow from $46.5 billion at a 5.3% CAGR until 2020.

Finding value in hidden gems

As an investor, you should already have a clear idea of what industry you like to invest in. If it happens to be healthcare, these three stocks should provide some insight on stocks that don’t get much attention from financial analysts. However, to find true value, one must look where no one else does.

The post 3 Under-the-Radar Healthcare Stocks You Should Know About appeared first on The Motley Fool Canada.

More reading

• Inflation Just Cooled Down to 1.8%, and These Stocks Are Positioned to Benefit

Dollarama’s online e-commerce site presents shoppers with an $18 flat-rate shipping fee added onto every individual order. From there, consumers can purchase bulk quantities of Dollarama’s regular in-store products at a wholesale discount. For example, a pack of chewing gum will not be sold individually but rather in a “case” of 216 units.

This introduction into bulk online sales creates a credible and well-established competitive threat to leading wholesaler Costco. It also diversifies Dollarama’s sole focus on brick-and-mortar sales to a more powerful e-commerce platform.

Positive impact on the stock

Since officially launching its e-commerce platform on January 21, Dollarama’s stock is up from $35.50 to today’s open of $40.01. This represents strong growth of 12%, which can be attributed to the announcement of its e-commerce site and a strong Q4 earnings report. Its latest quarterly report stated a sales increase of 13% and comparable store sales growth of 2.5%—a strong showing offering shareholders convincing metrics to double down on its investment.

With the publication of the online sales figures expected in the Q1 2019 earnings report, investors should expect an increase in overall gross sales with a boost coming from that channel. The online sales figures should contribute to a strong rise in the stock price as long as the launch is deemed successful.

Defying the brick-and-mortar stock trend

It is no secret that brick-and-mortar store sales have been declining since the popularity of e-commerce. All one has to do is compare the size of Amazon to their hometown shopping centre to find evidence of this. It is an obvious solution for businesses to sell their products directly from their warehouse to their consumers to avoid costs associated with operating a physical store. This has not been a problem for Dollarama as it profitably operates 1,225 stores as of February 2, 2019.

However, Dollarama faces a tall obstacle when it comes to transitioning into online sales: its products are too inexpensive to profitably ship to consumers and can only realize a profit by being sold in physical stores. We know this from Amazon’s “Cut the CRaP” campaign of removing items that “Can’t Realize a Profit.”

For Dollarama, every single one of its products falls in the “CRaP” category unless sold online in bulk.

What we should expect

With Dollarama’s consumer base being mostly comprised of value-driven individual shoppers, it remains to be seen how Dollarama will convince businesses to leave Costco’s established online business for Dollarama’s. Both companies possess a strong brand for value; however, Dollarama’s advantage in brand accessibility can be the key distinguisher Dollarama’s fight for market share in the online wholesale retailer space.

The post Why Dollarama’s (TSX:DOL) Brilliant Push Into E-Commerce Matters to Your Portfolio appeared first on The Motley Fool Canada.

More reading

• Have $2,000? These 2 Stocks Could Be Bargain Buys for 2026 and Beyond
• Interest Rates Aren’t Falling: Here’s What I’d Do With My TFSA
• 2 Top Stocks Long-Term Investors Should Buy in March
• The Best Stocks to Buy With $1,000 Right Now
• When Doing Nothing Is the Smartest Investment Move

Air Canada (TSX:AC)(TSX:AC.B) boasts a fleet of 24 737 MAX 8 aircraft in operation since 2017. This may be a troublesome figure for shareholders who have felt the impact since the accident on March 10. Shares of Air Canada were hovering around their YTD high of $35.50 before falling to a low of $30.96. However, investors who held their shares or bought the dip have seen their positions grow since the initial scare.

Air Canada’s plan to meet demand without the marquee aircraft

In an attempt to restore confidence in the airline’s stock, Air Canada has released a statement detailing its strategy to minimize service disruption in the coming busy summer months. The airline expects to cover an encouraging 98% of previously scheduled routes by substituting other aircraft in place of the 737 MAX 8.

Passengers have also felt little disruption in the service due to impressive tactics by management. The airline has made all travel information readily available via the Air Canada app. This allowed current ticketholders and loyalty customers to remain confident in flying with airline despite the grounding of the aircraft.

With a tally of 190 planes and 87 more orders outstanding, Air Canada is as well equipped as any other airline to successfully navigate through this adversity faced by 737 MAX 8 customers.

How Boeing is helping

Once the news broke about the problematic aircraft’s grounding, some investors lost confidence in the airlines that carried them in their fleet. This resulted in a fall in stock price and a revised financial outlook for many airlines.

To help with the public sentiment, Boeing has provided the public with transparent updates on how the aircraft is being fixed. The company released what it believes to have been the reason for the crash, citing the Maneuvering Characteristics Augmentation System’s (MCAS) role in pushing the nose of the plane down. Boeing CEO Dennis Muilenburg explained on video that the manufacturer’s test pilots have completed 120 test flights in an effort to certify the new MCAS and resume the aircraft’s commercial service.

Once certified and cleared by the FAA to fly again, investors should see a significant pop in Air Canada’s stock price.

Air Canada in shape to be stronger than ever

After finishing 2018 on a strong note, Air Canada expects to carry the strong momentum into 2019. It boasted a Q4 2018 operating income of $122 million and a record Q4 EBITDAR of $543 million (EBITDAR is a non-GAAP tool frequently used by airlines to include aircraft rent [R] in the EBITDA formula).

Air Canada has been clear on when it expects Boeing’s now infamous model to resume flying. The airline has removed the 737 MAX 8 from the schedule until July 1, 2019, giving investors an idea of when they can expect some stock volatility.

When the Boeing 737 MAX 8 is ready to fly again this summer, investors should expect to see an increase in price in Air Canada’s seemingly undervalued stock.

The post How the Boeing 737 MAX 8 helps Air Canada (TSX:AC) appeared first on The Motley Fool Canada.

More reading

• A Year Later: 3 TSX Stocks That Proved the Doubters Wrong
• Is Air Canada Stock a Buy After Falling 8.4% This Year?
• Top Canadian Stocks to Buy With $10,000 in 2026
• Turnaround Stocks to Buy Now Before Everyone Else Sees Their True Potential
• Down 16% in the Past Month, Can Air Canada Stock Recover in 2026?

Luckily, we have your back regardless of market conditions to keep your portfolios strong if markets start to dip into a recession. Here are three stocks in three industries I like.

MedTech

Medtech is one of those industries that always seems to defy market conditions, both up and down. The reason why? People are constantly getting sick, regardless of whether they have more disposable income or not. Bull or bear, hospitals will operate normally, making medtech a healthy addition to an investor’s de-risked portfolio.

Therapeutics company Greenbrook TMS (TSX:GTMS) has high-growth potential in the mental disorders space. Its main product provides an FDA-cleared non-invasive therapy to patients suffering from chronic depression and Obsessive-Compulsive Disorder with reportedly no side-effects. With FDA regulatory hurdles behind it, GTMS can focus on its strong growth for investors.

The best part? The therapy can be administered during a lunch break, enabling patients to get treated without disrupting their schedules.

Supermarkets

Although a recession may restrict our appetite to invest, it is sure not to interfere with our appetite for food. With households having less disposable income to spend at restaurants and other outside dining experiences, supermarkets are set to benefit with an increase in sales.

Metro (TSX:MRU) provides Canadian-centric investors with a great opportunity to get in before things go south in the markets. Metro operates in both Quebec and Ontario and boasts a wide array of recognizable brands, like Selection and Super C. Its $4.8 billion acquisition of Jean Coutu in May of 2018 also presents investors with a wide range of channels for future operating cash flows. Add in a strong management team, and investors can find themselves with a recession-proof stock to satisfy their hunger for profits.

Cannabis

As the new kids on the block, cannabis stocks have been the subject of great volatility. Investors are still uncertain about what to expect from stocks in this budding industry. However, the bright side is that Canada’s progressive legislation regarding cannabis creates a long growth runway for stocks in this area. Not only are they selling recreational products, but medical and non-psychoactive products as well. This allows their cannabis products to be marketed to a wider consumer base.

Aurora Cannabis (TSX:ACB)(NYSE:ACB) is a stock investors need to keep their eyes on if they want to start recession-proofing their portfolios. Although currently unprofitable, Aurora boasts the largest forecast in Canada, peaking at 700,000 kilos of annual potential output. It has also been making strong moves within the industry, which should intrigue investors as well. With the consumption of cannabis set to rise in Canada, getting in early in a fast-growing industry like cannabis can help to de-risk investors’ portfolios.

The post Why You Should Invest During a Recession appeared first on The Motley Fool Canada.

More reading

• The Best Canadian Stocks to Buy and Hold Forever in a TFSA
• The Sectors Where Canada Actually Beats the United States
• The Average TFSA Balance for Canadians at 50 — and 3 Stocks to Close the Gap
• 3 Dividend Stocks That Could Help You Sleep Better in 2026
• You Know These Canadian Businesses Better Than the Market Does. Here’s How to Use Your Edge.