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Cheap TSX Stocks to Buy

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The financial markets across the world have recovered strongly after bottoming out in March. Currently, the S&P/TSX Composite Index trades just 3.3% lower for this year. However, some of the companies have failed to participate in this recovery rally and provide excellent buying opportunities.

In this article, we will be looking at two such companies, which are cheap but have strong growth potential.

Restaurant Brands International

My first pick is Restaurant Brands International (TSX:QSR)(NYSE:QSR), which owns Burger King, Tim Hortons, and Popeyes. It has lost close to 11% of its stock value his year. The temporary closure of restaurants amid the pandemic and its weak second-quarter comparable sales had dragged the company’s stock price down.

However, the company’s long-term growth prospects remain strong. Its digital sales grew over 120% in the second quarter on a year-over-year basis. Its investment in the drive-thru, digital, and delivery channels drove its online sales. I believe these investments to act as a tailwind for the company in the long term, given the shift in consumer preferences towards delivery and drive-thru services.

Meanwhile, the comparable sales growth of both Burger King and Tim Hortons have shown significant improvement from their March lows. The comparable sales growth of Burger King was flat at the end of July, while that of Tim Hortons stood at negative mid-teens.

Popeyes, which had reported strong comparable-sales growth of 24.8% in the second quarter, has continued its strong performance. Its comparable-sales growth stood at high-20s at the end of July.

Meanwhile, Restaurant Brands International’s liquidity position looks strong, with the cash and cash equivalents of US$1.5 billion as of June 30. Currently, the company trades at a forward EV-to-sales multiple of 7.2 compared to its average of 7.9 over the last three years.

So, given its strong liquidity, improving sales, and attractive valuation, Restaurant Brands International provides an excellent buying opportunity.

Canopy Growth

My second pick is Canopy Growth (TSX:WEED)(NYSE:CGC), which trades over 17% lower for this year. The weak fourth-quarter performance had led to a fall in its stock price. However, on Monday, the company reported better-than-expected first-quarter performance.

Its revenue came in at $110.4, beating analysts’ expectations of $93.5 million. Also, its adjusted EBITDA losses stood at $92.2 million, which was significantly lower than analysts’ projections. The growth in its medical cannabis sales drove the company’s revenue. However, its recreational sales declined due to the temporary closure of stores amid the pandemic and increased competition.

Meanwhile, Canopy Growth is focusing on strengthening its position in the value segment and Cannabis 2.0 products to gain market share. It has repositioned its value brand Tweed dried flower across Canada.

The company has already introduced four cannabis-infused beverages, two vape product products, and various cannabis-infused chocolates in Canada. Its Cannabis 2.0 sales accounted for 13% of the company’s total B2B sales in the country.

Also, Canopy Growth has stepped up its activities in the United States to drive its sales. It recently launched an e-commerce site where the customers can buy any of the company’s CBD products. It has also expanded the distribution of its BioSteel RTD non-CBD beverages and S&B vaporizer products to the key markets across the United States.

Meanwhile, the company has planned to launch its health and wellness CBD products under the Martha Stewart brand in the next few weeks. So, I believe Canopy Growth is a perfect fit for long-term investors, given its robust growth potential.

Check out the following report for a high-growth stock.

Source: – The Motley Fool Canada

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Oil Prices Rise After EIA Reports Small Crude Draw – OilPrice.com

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Oil Prices Rise After EIA Reports Small Crude Draw | OilPrice.com

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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    Oil prices stabilized today after the Energy Information Administration reported a crude oil inventory draw of 2 million barrels for the week to September 25.

    At 492.4 million barrels, inventories are still above the five-year average for the season, the EIA said. Analysts had expected a build of 1.4 million barrels.

    The EIA also reported an increase in gasoline stocks a day after the API depressed the market, with an estimated 2.325-million build in gasoline inventories.

    According to the EIA, gasoline inventories shed 700,000 barrels last week, which came after a draw of 4 million barrels estimated for the previous week. Gasoline production in the week to September 25 averaged 8.9 million bpd. This compares with an average of 9.3 million bpd a week earlier.

    In distillate fuels, the EIA reported an inventory decline of 3.2 million barrels. Distillates have been a major headache for refiners due to subdued demand. Total inventories are now close to 180 million barrels—almost a record high—and refiners don’t really have an incentive to increase production. Last week, they produced an average of 4.4 million bpd of distillates. This compares with 4.5 million bpd, also an increase on the previous week.

    Refineries processed some 13.7 million bpd of crude oil last week, compared with 13.4 million bpd a week earlier.

    Meanwhile, Total has become the latest industry major to cast a shadow over hopes for oil demand recovery. In its Energy Outlook, the French supermajor said that while it projected growth in global energy demand, this did not apply to oil demand, which would plateau by 2030.

    This added to more pandemic-induced fears as infections continued to rise in number in many key oil markets, including the United States and India, but also in a good chunk of Europe.

    At the time of writing, Brent crude was trading at $40.76 a barrel with West Texas Intermediate at $39.54 a barrel.

    By Irina Slav for Oilprice.com

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      Statistics Canada to unveil GDP reading for July – BNN

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      Canada’s economy posted a strong recovery over the summer, with more industries moving closer to pre-pandemic levels of output.

      Gross domestic product rose three per cent from a month earlier, Statistics Canada reported Wednesday. Preliminary estimates also show a one per cent expansion in August.

      Although the figures mark a deceleration from June’s 6.5 per cent growth, it’s still a steady clip. Economists were expecting output to grow by 2.9 per cent in July.

      The latest figures suggest Canada’s economy is bouncing back more quickly than originally expected, though the pace of the recovery is slowing and a recent spike in the number of COVID-19 cases in the country’s largest provinces could threaten future gains.

      Provinces like Ontario and Quebec have already reimposed some social distancing measures to prevent the second wave from getting out of control. This will likely drag out a full recovery, which still wasn’t forecast to occur for another two years.

      Based on the flash estimate, economic activity in August was about 95 per cent of output levels in February. At the nadir of the recession in April, output levels were about 82 per cent of pre-pandemic levels.

      Some parts of the economy are faring better than others. Agriculture, forestry and fishing, along with retail trade, finance and insurance an real estate have all surpassed February levels of output.

      GDP plunged by an annualized 38.7 per cent in the three months through June, adding to an 8.2 per cent drop in the first quarter, Statistics Canada reported. Third-quarter GDP is on pace for annualized growth of 48%, given the momentum from the last few months, Benjamin Reitzes, an economist at Bank of Montreal, said in a report before Wednesday’s release.

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      CERB to EI: What to know about transitioning to the new coronavirus benefits – MSN Canada

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      © THE CANADIAN PRESS/Giordano Ciampini
      The federal government is looking to increase the amount of the new benefit set to replace CERB. THE CANADIAN PRESS/Giordano Ciampini

      As the Canada Emergency Response Benefit begins ramping down, Canadians who still need financial help as the coronavirus pandemic stretches on are now transitioning to different benefits.

      The House of Commons returned from prorogation last week and the government immediately tabled a bill creating three new benefits for those who don’t qualify for Employment Insurance, as well as for caregivers and Canadians who need to stay home from work because they are ill.

      Read more: COVID-19 aid bill headlines Parliament’s first full week

      And while for many, that transition from CERB to Employment Insurance will happen automatically, others will still need to act to make sure they keep receiving federal benefits, or start receiving new ones.

      Here’s what you need to know.

      Transitioning from CERB to Employment Insurance

      The Canada Emergency Response Benefit (CERB) launched in April, but was retroactive to March 15, and was billed by the government as a way to get money out the door as quickly as possible.

      It was quickly criticized by the opposition for not including any checks on eligibility criteria and relying instead on retroactive verifications. It also came under fire from some business groups who argued it was providing a disincentive for workers to return to their jobs as the economy tried to reopen.

      The six-month benefit began expiring on Sunday for those who have already maxed out the 28-week period for which they can receive the benefit — basically, those who have been receiving the benefit dating from March 15.

      Read more: NDP will back Liberal throne speech, preventing fall election

      Those who haven’t yet hit the 28-week maximum will continue receiving their CERB payment until they max out, and new applicants who now realize they were eligible at any point between March 15 and Oct. 3 can apply retroactively up until Dec. 2.

      Those who max out their CERB eligibility are now being transitioned onto Employment Insurance.

      The government expanded the eligibility criteria for Employment Insurance to allow for what Employment Minister Carla Qualtrough last week called a “more sophisticated” balance between the need to support workers and the need not to create an incentive to refuse paid work.

      The new Employment Insurance program will let Canadians transitioning onto it from the CERB receive the same amount — $500 per week, which is taxable — for at least 26 weeks.

      They can also work while on claim up to a maximum of $38,000 per year.

      How to apply for Employment Insurance

      For Canadians who applied for and received the CERB through Service Canada, the transition to Employment Insurance will happen automatically.

      “To ensure a smooth transition to EI, the majority of Canadians still receiving the CERB through Service Canada who are eligible for EI will be automatically transitioned,” Marielle Hossack, press secretary for Qualtrough, said in an email.

      “Service Canada will contact all EI clients to confirm whether they need to apply or are being transitioned automatically. Clients can also verify the status of their claim in their My Service Canada Account.”

      Read more: CERB ending means new system for some, uncertainty for others

      Anyone who was receiving CERB through Service Canada and maxed out this past weekend should not need to do anything in order for their payments to transition to Employment Insurance.

      That’s true for recipients through Service Canada who max out in the coming weeks and months.

      For those who maxed out this past weekend, Employment Insurance payments should start for roughly 80 per cent of them by Oct. 14, while others may have a wait of roughly two weeks more.

      The exception here is anyone receiving the benefit through Service Canada who is also self-employed or who has a 900-series social insurance number — they will need to apply again.

      Applications can be made through the My Service Canada account.

      As well, anyone who applied for and received the CERB through the Canada Revenue Agency will need to apply for Employment Insurance again through Service Canada and a My Service Canada account.

      There’s no set date to apply — once you’re eligible, you can apply and once registered, you’ll have to submit biweekly reports on work status in order to keep receiving Employment Insurance.

      However, waiting to apply once CERB benefits lapse will result in a waiting period while EI kicks in.

      Not eligible for Employment Insurance?

      Although the Employment Insurance criteria have changed, there will still be people who don’t qualify based on the number of hours and income lost.

      The government has tabled and is in the process of debating legislation to create three new federal benefits aimed at those who don’t qualify for Employment Insurance. And while legislation is never a done deal until it gets royal assent, the NDP has indicated it plans to support the bill.

      As a minority government, the Liberals need at least one other party to support their bills and implement the three new federal coronavirus benefits.

      The first is the Canada Recovery Benefit. Like the new Employment Insurance plan, the new benefit will provide $500 weekly for 26 weeks but will target people whose income has dropped by at least half. These include self-employed people.

      The program requires recipients to be actively seeking work, and states that they must accept work “where it is reasonable to do so.”

      The second benefit is the Canada Recovery Sickness Benefit, which will provide $500 per week for no more than two weeks to Canadians “who are sick or must self-isolate for reasons related to COVID-19.”

      The third is the Canada Recovery Caregiving Benefit, which will provide $500 per week for up to 26 weeks to households where someone is forced to stay home from work to care for either a child under the age of 12 or a family member who would normally be cared for at a school, daycare or care home that is closed because of the coronavirus pandemic.

      The benefit also applies in the event the child or family member has to be quarantined or gets ill.

      All three benefits will be run through the Canada Revenue Agency, and Canadians will have to directly apply.

      They can do this at any point between now and Sept. 25, 2021.

      Video: Reality check: Cost and timeline of Liberals’ child care plan (Global News)

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