Wed, April 24, 2024 at 9:35 AM EDT
Business
Market Crash 2020: These 3 Stocks Are Screaming Buys Today – The Motley Fool Canada
I know you’re hearing it everywhere, but I just want to remind everyone what a massive buying opportunity this market crash is. You’ll likely have to wait years for a better time to put cash to work.
I’m the first to admit the short term looks bleak. That’s exactly why this market crash happened, after all. The long term, however, looks much better. Governments around the world are poised to help out consumers with short-term liquidity issues and make sure depressed businesses can make payroll. This stimulus, combined with effective social-distancing techniques, should ensure the economy bounces back faster than most expect.
Although I have no idea when the bottom will be, I do know stocks are currently very cheap. It’s a generational buying opportunity for many sectors that have been beaten down by the market crash. Let’s look at three different companies I think are absolute screaming buyS today. In fact, I’ve even added these companies to my portfolio recently.
Royal Bank of Canada
Canada’s largest and arguably best-run bank is now available at a bargain price. What an excellent opportunity to add Royal Bank (TSX:RY)(NYSE:RY) to your portfolio.
It seems like Royal Bank dominates everything it touches. Its domestic banking operations have the highest market share in Canada. More Canadians bank with Royal Bank than anywhere else. This translates into solid mortgage growth, good results from wealth management, and impressive insurance operations. Royal Bank’s capital markets division is also one of the best in the business, and we can’t discount its operations in the United States or the Caribbean.
What makes Royal Bank an excellent buy during this market crash is its suddenly reasonable valuation. After years of trading at a high price-to-earnings multiple, Royal Bank’s P/E ratio has dropped to just 8.7 times. The dividend yield is also much higher than normal; Royal Bank shares yield 5.5%.
RioCan REIT
If you think Royal Bank’s 25% sell-off has been a big story during this market crash, you’ll want to check out Canada’s REIT sector. Many high-quality names are off 50%.
RioCan REIT (TSX:REI.UN) is one of the best in the sector. It has smart management, good assets located in major cities, and a conservative balance sheet. Much of the rent from its 220 property retail and mixed-use portfolio comes from major grocers and other solid retailers, companies that are handling this market crash just fine. Sure, some of the other tenants will be affected, but I’m confident RioCan will make it through this crisis.
Meanwhile, the company’s development pipeline should boost profitability in the future. Financing has been secured for these projects, and construction will continue. These are big projects, too. The Well, which is RioCan’s marquee development in downtown Toronto, will feature 1.1 million square feet of office space, 500,000 square feet of retail, and some 1,800 apartments.
In the meantime, the market crash has nicely elevated RioCan’s yield. The current payout is more than 10%.
Manulife Financial
The market crash is a great opportunity to load up on Manulife Financial (TSX:MFC)(NYSE:MFC) shares at a substantial discount to their fair value.
Yes, I’m the first to admit coronavirus-related costs will be an issue in the short term. Life insurance payouts will be elevated, and many folks will make heavy use of their workplace benefits over the next few months. Investors are also concerned about results from Asia, which has been the company’s big growth driver over the last few years.
But this is an excellent overall business that now trades at a bargain price. Manulife earned $2.78 per share in 2019. Shares trade hands at around $15 each as I write this. That’s a P/E ratio of just over five times. The stock also trades at a substantial discount to its book value, meaning investors are valuing the company’s brand at nothing.
And like the other stocks on this list, you get paid a fantastic dividend while you wait for the stock to come back. The yield is currently 7.5%.
The bottom line on these market crash stocks
Don’t overthink it. This market crash has given you the opportunity to buy some of Canada’s best stocks on sale. Forget about trying to time the bottom of the market and seize this opportunity. You’ll be glad you did.
Just Released! 5 Stocks Under $49 (FREE REPORT)
Motley Fool Canada’s market-beating team has just released a brand-new FREE report revealing 5 “dirt cheap” stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don’t miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.
Fool contributor Nelson Smith owns shares of Royal Bank of Canada, RIOCAN REAL EST UN, and Manulife Financial.
Continue Reading
Business
Oil Firms Doubtful Trans Mountain Pipeline Will Start Full Service by May 1st
|
Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.
In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.
Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.
After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.
“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.
The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).
The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.
The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.
Business
Tesla profits cut in half as demand falls
|
Tesla profits slump by more than a half
Tesla has announced its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.
It caps a difficult period for the electric vehicle (EV) maker, which – faced with falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.
Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts’ predictions of just over $22bn.
But the decision by Tesla to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading.
It did not reveal pricing details for the new vehicles.
However Mr Musk made clear he also grander ambitions, touting Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.
However, Tesla has already been on a charm offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
It also said its situation was not unique.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” it said.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
However, Mr Musk sought to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce stood at more than 140,000 late last year, up from around 100,000 at the end of 2021, according to the company’s filings with US regulators.
Musk’s salary
The car firm is also facing other issues, with a struggle over Mr Musk’s compensation still raging on.
On Wednesday, Tesla asked shareholders to vote for a proposal to accept Mr Musk’s compensation package – once valued at $56bn – which had been rejected by a Delaware judge.
The judge found Tesla’s directors had breached their fiduciary duty to the firm by awarding Mr Musk the pay-out.
Due to the fall in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still greater than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the firm being moved from Delaware to Texas – which Mr Musk called for after the judge rejected his payday.
Business
Stock market today: Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck
|
Tech stocks rose on Wednesday, outstripping the broader market as investors welcomed Tesla’s (TSLA) cheaper car pledge and waited for the next rush of corporate earnings.
The Nasdaq Composite (^IXIC) rose roughly 0.6%, coming off a sharp closing gain. The S&P 500 (^GSPC) was up 0.2%, continuing a rebound from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Tesla shares jumped nearly 12% after the EV maker’s vow to speed up the launch of more affordable models eclipsed its quarterly earnings and revenue miss. That cheered up investors worried about growth amid a strategy shift to robotaxis and the planned cancellation of a cheaper model.
The results from the first “Magnificent Seven” to report have intensified the already high hopes for Big Tech earnings, that the megacaps can revive the rally in stocks they powered. The spotlight is now on Meta’s (META) report due after the market close, as the Facebook owner’s shares rose after the Senate voted for a potential ban on rival TikTok. Microsoft (MSFT) and Alphabet (GOOG) next up on Thursday.
Meanwhile, Boeing (BA) reported better than expected first quarter results before the opening bell with a loss per share of $1.13, narrower than the $1.72 estimated by Wall Street. Shares rose about 2% in morning trade.
Live6 updates
-
Health19 hours ago
Remnants of bird flu virus found in pasteurized milk, FDA says
-
Health23 hours ago
Bird flu virus found in grocery milk as officials say supply still safe
-
News16 hours ago
Amid concerns over ‘collateral damage’ Trudeau, Freeland defend capital gains tax change
-
Art20 hours ago
Random: We’re In Awe of Metaphor: ReFantazio’s Box Art
-
Investment24 hours ago
Taxes should not wag the tail of the investment dog, but that’s what Trudeau wants
-
News24 hours ago
Peel police chief met Sri Lankan officer a court says ‘participated’ in torture – Global News
-
Art13 hours ago
The unmissable events taking place during London’s Digital Art Week
-
Media19 hours ago
Vaughn Palmer: B.C. premier gives social media giants another chance