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Forget Air Canada (TSX:AC): This TSX Stock Could Make You Rich – The Motley Fool Canada

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Air Canada (TSX:AC), like many other travel-related companies this year, has taken a beating. Year to date, the stock is down by more than 60%.

However, like the rest of the Canadian stock market, Air Canada had a very strong showing in April. The S&P/TSX 60 saw a nice gain of 13% in April after a disastrous March, while Air Canada saw a very impressive 40% gain in April.

Even with the 40% gain in April, the Canadian airline is still down by more than 60% from all-time-highs earlier this year. There are plenty of headwinds that airline companies are dealing with across the globe, as travel has come to almost a complete halt due to this pandemic.

The Oracle of Omaha is bearish on airline stocks

Warren Buffett spoke over the weekend during the first-ever virtual Berkshire Hathaway annual meeting. The renowned investor announced that Berkshire Hathaway had sold the company’s entire positions in all four major airlines it owned. Although Air Canada was not one of the four airlines being sold, it was evident that Buffett is not bullish on the future of the airline industry.

Buffett went out to provide details on why the company had sold the airline positions at a massive loss. He explained that he believes the airline industry has completely changed due to this pandemic, and the effects will be long term.

“I don’t know that three, four years from now people will fly as many passenger miles as they did last year,” Buffett warned. “You’ve got too many planes.”

Patient value investors may see Air Canada as a temping buy today, but I believe that are plenty of other top TSX stocks now trading below all-time highs. Let’s take a deeper look at this Canadian company and see why it has the potential to make long-term investors rich.

Constellation Software

Constellation Software (TSX:CSU) has been one of the top-performing TSX stocks over the past decade. The $28 billion market cap company operates vertical software companies that provide client-specific applications and programs.

If you haven’t heard of this company before, it’s most likely due to the reason that the company builds business-specific software not intended for individual consumers.

The company generates more than half of its revenue from government-related customers. Constellation Software might be serving other industries that are facing a slowdown in business due to this pandemic, but the government-related customers should continue to generate revenue for the time being.

Constellation Software has been a serial acquirer in the past, and that may continue during this economic downturn. With many companies now trading at beaten-down valuations, Constellation Software may be looking to make an acquisition before the market returns to an all-time high.

The software giant is set to report its first-quarter earnings this Thursday, May 7. The company is expected to report strong results after seeing steady growth over the past several quarters. Analysts are expecting strong growth to continue through 2020 and 2021.

Foolish takeaway

Air Canada may be an interesting investment for long-term value investors, but I believe there are many more attractive deals trading on the market today.

Constellation Software has been one of the top TSX stocks over the past decade and isn’t showing any signs of slowing down, even amid this pandemic. If the next 10 years are anywhere close to as strong as the last 10 for Constellation Software, investors buying this stock today could soon be on the path to being rich.


Fool contributor Nicholas Dobroruka has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and Constellation Software and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short June 2020 $205 calls on Berkshire Hathaway (B shares).

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Bell inks 5G equipment deal with Ericsson; leaves door open to Huawei – BNNBloomberg.ca

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MONTREAL – Huawei Technologies Inc.’s ambitions to be a player in Canada’s 5G network took a major hit Tuesday as two of the country’s three largest telecom companies announced partnerships with the Chinese tech giant’s European rivals.

Bell Canada announced Tuesday morning that Sweden-based Ericsson will be its second supplier of the radio access network equipment that has been Huawei’s main product line in Canada since entering the market in 2008. Earlier this year, Bell signed its first 5G wireless network supplier agreement with Nokia, a rival of Ericsson and China’s Huawei.

Later Tuesday, Telus Corp. announced that it had also selected Ericsson, as well of Nokia of Finland, as suppliers for its 5G networks.

Neither Bell nor Telus provided details on how much their contracts with Ericsson and Nokia were worth.

Huawei’s participation in the construction of Canada’s 5G network has become a major sticking point between Ottawa and Washington. The U.S. has warned Canada, the United Kingdom and other allies that it will limit intelligence sharing with countries that have Huawei equipment in their 5G networks – citing the potential for spying by China, an allegation Huawei denies.

“Huawei has worked closely with Bell in Canada for many years, helping them build one of the world’s leading 4G LTE networks,” Huawei Canada spokesman Alykhan Velshi said in a statement.

He added that Huawei’s remains committed to Canada and looks forward to the federal government completing its 5G review and its decision about Huawei’s role in Canada.

“We continue investing more than a quarter of a billion dollars a year in R&D in Canada. We continue building new research partnerships with Canada’s world-class universities. As we have for more than a decade, we continue to work with our Canadian telecom partners to help them build and support state-of-the-art networks that connect Canadians,” Velshi said.

Ericsson, already a supplier of 4G LTE wireless and other technology to Bell and the main supplier for its rival Rogers Communications, also has a major research and development presence in Montreal.

Bell said Ericsson will also support its rollout of 5G-enhanced fixed wireless home internet service to rural areas, which generally have less access to land-based fibre optics networks.

On Tuesday, Bell indicated the door remains open to partnering with Huawei, depending on the outcome of the federal government’s review.

“We’re working with multiple vendors to build our 5G network – as we did with our successful buildout of 4G LTE, which included Cisco, Ericsson, Huawei, Nokia and others,” said Bell spokesperson Marc Choma in an email to BNN Bloomberg. “Huawei has been a reliable and innovative partner in the past and we would consider working with them in 5G if the federal government allows their participation.”

A spokesperson for Telus did not respond to BNN Bloomberg’s question about whether it is also open to partnering with Huawei on its 5G network if permitted by the government.

Prior to the arrest of Huawei Technologies chief financial officer Meng Wanzhou in Vancouver in December 2018, the Chinese company wasn’t a household name in Canada.

Since Meng’s arrest, which has sparked a major rift between China and Canada and focused worldwide attention on Huawei, the federal government has been undecided about whether the Chinese company will be allowed in Canada’s 5G networks – which are currently being assembled.

Analysts have said Bell and Telus use Huawei extensively in their fourth-generation networks and would be more affected by a Huawei ban than their rival Rogers Communications, which has predominantly used Ericsson network gear.

Besides Huawei, Ericsson and Nokia, there are other companies that want a piece of the 5G network upgrades.

Samsung Electronics has announced a deal to supply equipment for Videotron’s wireless network in the province of Quebec and the Ottawa region of Ontario.

With files from BNN Bloomberg

BNN Bloomberg is a division of Bell Media, which is owned by BCE.

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Telus selects Nokia, Ericsson as 5G suppliers – Yahoo Canada Finance

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Toronto, Canada - June 16, 2019: TELUS Scarborough office building in Toronto, canada. Telus is a Canadian telecommunications company that provides telecommunications products and services.

Vancouver-based national carrier Telus has selected Nokia and Ericsson as its 5G vendors, a press release from the company said. 

The news comes the same day that Bell announced it too would use Ericsson to provide radio access network (RAN) equipment. 

“Our team is committed to rolling out superior network technology from urban to rural communities, fueling our economy and driving innovation as we power Canadians into the 5G era through an unparalleled network experience,” Telus’ CEO Darren Entwistle said in the release. 

“Our 5G deployment will support economic growth and diversity that will be essential for the virtualization of health, education, teleworking, and stimulating the economic growth and recovery given the impact of COVID-19.”

During its Q1 2020 earnings, CFO Doug French said its focus right now is to help its customers during the COVID-19 crisis.

In its Q4 2019 earnings, the carrier said it was not going to pre-announce its 5G launch plans but that its initial module, or the first phase of the 5G rollout, would be with Huawei until the government approves its RFP.

Bell and Telus use Huawei’s network equipment in some areas. The federal government is still reviewing whether or not it intends to ban the Chinese telecommunications manufacturer from participating in Canada’s 5G rollout.

Rogers also uses Ericsson as a 5G vendor.

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North American equity markets rally in spite of widespread unrest – BNNBloomberg.ca

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1:15 p.m. ET: North American equity markets extend gains into midday, oil rallies

North American equity markets were solidly in positive territory through the midday trade, with the S&P/TSX Composite Index up 0.9 per cent, the Dow Jones Industrial Average gaining 0.8 per cent, the S&P 500 rising 0.4 per cent and the Nasdaq Composite modestly higher, up 0.1 per cent.

U.S. benchmark oil West Texas Intermediate accelerated higher into the afternoon, rising more than three per cent to US$36.55 per barrel to trade at session highs.

That helped lift the TSX energy sector, which led the way on the composite with a 3.4-per-cent gain on the session.

The Canadian dollar continued to move higher against its U.S. counterpart, gaining a third of a cent to trade at 74.04 cents U.S., though the greenback has been broadly weaker against almost all of its major-market peers.

9:35 a.m. ET: North American equity markets rally in spite of widespread unrest

North American markets notched gains into the early trading day Tuesday, with the S&P/TSX Composite Index and Dow Jones Industrial Average both up half a per cent, the S&P 500 gaining a third of a per cent and the Nasdaq Composite Index up a more modest 0.1 per cent. The gains came in spite of widespread civil unrest in the United States, as some police responded with force to demonstrators protesting against systemic racial inequities.

In Toronto, shares of BlackBerry Ltd. rose about seven per cent to extend Monday’s gains after an unconfirmed report from StreetInsider said the company has held talks with Fairfax Financial over a deal for Fairfax to acquire the remainder of BlackBerry’s shares. In an email to BNN Bloomberg, BlackBerry declined to comment on rumours or speculation.

BlackBerry shares rise on takeover report

BlackBerry is a stock to watch after a report Monday suggesting Fairfax Financial was considering a takeover of BlackBerry sent the shares higher. BNN Bloomberg’s Paul Bagnell has more.

Crude oil prices were higher, with U.S. benchmark West Texas Intermediate up half a per cent to US$35.0 per barrel, though it had briefly breached the US$36 level earlier in the day. Crude has gotten a boost from the OPEC+ group’s production curtailments, and there are reports the group may extend those cuts for another month to support prices.

Alberta’s Western Canadian Select also gained, rising 1.55 per cent to US$29.51 per barrel.

The Canadian dollar extended Monday’s surge against its U.S. counterpart, gaining another two-tenths of a cent to 73.90 cents U.S.

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