TSX Breakout Stocks: A Closer Look
Written by Amy Legate-Wolfe at The Motley Fool Canada.
Investment Opportunities and Challenges
The TSX presents a curious blend of opportunity and pitfalls. Investing in breakout stocks can be tempting, but one must tread carefully. Often, stocks seem promising, only to plummet unexpectedly. Yet, there exists potential for growth, particularly among the TSX30 companies.
Current Promising Stocks
Cameco Corporation
First, let us examine Cameco (TSX:CCO), a leading uranium producer. Over three years, its stock has soared by 277%. Cameco holds a 49% stake in Westinghouse, bolstering its market position.
Financial Performance
Cameco’s second-quarter earnings were noteworthy, posting $321 million in net earnings. The uranium segment saw a 46% increase, thanks to Westinghouse’s contribution. However, the stock trades at a high price-to-earnings ratio. Though not an income stock due to its low dividend, it’s attractive for future-centric investors.
Bird Construction
Next is Bird Construction (TSX:BDT), up 330% in three years. This construction giant has widespread operations in Canada and benefits from an anticipated construction boom.
Project Backlog
Bird Construction has capitalised on various projects from healthcare to renewables. The company’s backlog has surged to $4.6 billion, seeing a 25% increase. Additionally, Bird offers a monthly dividend, although modest, with potential for future hikes.
Bombardier Inc.
Lastly, let’s discuss Bombardier (TSX:BBD.B). Its shares have skyrocketed by 514% over three years. Bombardier’s focus on its jet plane division has been inspiring, signalling substantial growth potential.
Expansion and Prospects
The manufacturer’s business jets and aftermarket services promise multi-year revenue. Recently, Bombardier announced a US$1.7 billion order with options for more. The growth driver lies in defence and services, though much is already priced in. It remains a watch-worthy entity despite no dividends presently offered.
Timing and Caution
All three stocks have experienced significant breakthroughs. Yet, their journey doesn’t end here. The sectors they operate in—uranium, construction, and aviation—are positioned for continued expansion. Any astute investor would do well to keep these stocks on their watchlist.
Considerations Before Investment
Before investing, it’s advisable to consult Stock Advisor Canada. Remarkably, stocks that have been overlooked, like Bombardier, didn’t make the advisor’s top 15 list. An example includes recommendations like MercadoLibre, yielding substantial returns since 2014.
Conclusion
In conclusion, the TSX offers intriguing stock choices. Whether seeking growth in uranium, anticipating a construction wave, or watching aviation evolve, these stocks provide intriguing prospects. Always analyse financials and market positions before making investment decisions.
Further Reading
Remember, market investments come with risks; diligence is the key.
