In this article, we will take a look at the 5 Best Canadian Stocks to Buy. To read our analysis of the iShares MSCI Canada ETF, as well as the risk/reward and methodology of this list, you can go to the 10 Best Canadian Stocks to Buy.
5. Cenovus Energy Inc. (NYSE:CVE)
Percentage of iShares MSCI Canada ETF: 1.47%
Number of Hedge Fund Holders: 42
Cenovus Energy Inc. (NYSE:CVE) is an integrated oil and natural gas company based in Calgary, Alberta. Operations of Cenovus Energy Inc. (NYSE:CVE) include oil sands projects in Alberta, crude oil and natural gas projects across Western Canada, crude oil production offshore Newfoundland and Labrador and natural gas and liquids production offshore China and Indonesia, and downstream operations including upgrading, refining, and marketing operations in Canada and the United States.
Cenovus Energy Inc. (NYSE:CVE) announced in August that it had agreed to acquire the remaining 50% stake in Toledo Refinery from bp for a total consideration of $300 million. Earlier in June, the energy company had announced an agreement to acquire remaining 50% stake in Sunrise oil sands project in northern Alberta from bp.
As of Q2 2022, 42 of the 895 hedge funds tracked by Insider Monkey owned shares of Cenovus Energy Inc. (NYSE:CVE), valued at $2.9 billion. Soroban Capital Partners is its largest shareholder with ownership of 50.3 million shares valued at $957 million.
4. Canadian Pacific Railway Limited (NYSE:CP)
Percentage of iShares MSCI Canada ETF: 3.93%
Number of Hedge Fund Holders: 42
Based in Calgary, Alberta, Canadian Pacific Railway Limited (NYSE:CP) is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. It offers a suite of freight transportation services, logistics solutions and supply chain expertise.
Earlier this year in July, Canadian Pacific Railway Limited (NYSE:CP) released its financial results for the quarter ended June 30, 2022. Its total revenues increased by 3% y-o-y to $1.7 billion, while it reported net earnings of $594 million, for the three months. The normalized EPS was recorded at $0.74 per share, beating the consensus by $0.01. The company declared a cash dividend of $0.15 per share for the quarter.
On September 12, BofA analyst Ken Hoexter upgraded Canadian Pacific Railway Company (NYSE:CP) to ‘Buy’ rating from ‘Neutral’ and increased the price target on its shares to $87 from $85 as “hiring rebounds and that volumes have inflected positively.”
As of Q2 2022, 42 hedge funds tracked by Insider Monkey held shares of Canadian Pacific Railway Limited (NYSE:CP), worth $7 billion. Chris Hohn’s TCI Fund Management is its largest hedge fund shareholder with ownership of 55.9 million shares valued at $3.9 billion.
3. Suncor Energy Inc. (NYSE:SU)
Percentage of iShares MSCI Canada ETF: 2.62%
Number of Hedge Fund Holders: 47
Calgary, Alberta-based Suncor Energy Inc. (NYSE:SU) is an integrated energy company with operations across oil sands development, production and upgrading, offshore oil and gas production, petroleum refining in Canada and the United States and its Petro-Canada retail and wholesale distribution networks.
In August, Suncor Energy Inc. (NYSE:SU) reported the financial results for the quarter ended July 31, 2022. Its revenue increased by 70% y-o-y to $12.5 billion, while it generated a net income of $3.1 billion, for the quarter. It reported a normalized EPS of $2.11 for the quarter, beating the consensus by $0.02.
On August 8, Credit Suisse analyst William Janela assumed coverage of Suncor Energy Inc. (NYSE:SU) with an ‘Outperform’ rating and unchanged price target of C$63.
According to the Insider Monkey data on 895 leading hedge funds, 47 hedge funds were long Suncor Energy Inc. (NYSE:SU) shares as of Q2 2022, with the total shares held by hedge funds valued at $2.4 billion. Arrowstreet Capital was the largest shareholder on record with ownership of 16.6 million shares valued at $583 million.
2. Nutrien Ltd. (NYSE:NTR)
Percentage of iShares MSCI Canada ETF: 2.86%
Number of Hedge Fund Holders: 48
Saskatoon, Saskatchewan-based Nutrien Ltd. (NYSE:NTR) is a leading producer and retailer of potash, nitrogen, and phosphate products for agricultural, industrial, and feed customers world-wide. It produces more than 27 million tons of these products on an annual basis and sells it through its retail network that services more than 0.5 million grower accounts.
In August, Nutrien Ltd. (NYSE:NTR) released its financial results for the quarter ended June 30, 2022. Its sales increased by 49% y-o-y to $14.5 billion, while its net income surged by 224% y-o-y to $3.6 billion, for the three months. It reported a normalized EPS of $5.85 for the quarter, beating the consensus by $0.15. Nutrien Ltd. (NYSE:NTR) declared a regular cash dividend of $0.48 per share for the quarter.
On August 8, Barclays analyst Benjamin Theurer lowered the price target on Nutrien Ltd. (NYSE:NTR) shares to $105 from $126 but maintained an ‘Overweight’ rating on the shares. The analyst is confident in the retail business of Nutrien Ltd. (NYSE:NTR) based on its “strong 2022 performance and customer retention.”
Nutrien Ltd. (NYSE:NTR) is among the Canadian favorites of hedge funds, with 48 of the 895 hedge funds tracked by Insider Monkey holding its shares valued at $1.1 billion. First Eagle Investment Management was its biggest shareholder with ownership of 8.4 million shares valued at $668 million.
1. Shopify Inc. (NYSE:SHOP)
Percentage of iShares MSCI Canada ETF: 2.04%
Number of Hedge Fund Holders: 60
Shopify Inc. (NYSE:SHOP) is a leading provider of internet infrastructure for commerce, offering trusted tools to start, grow, market, and manage a retail business of any size. Shopify Inc. (NYSE:SHOP) platform and services are used by millions of businesses across 175 countries, including notable names such as Gymshark, Heinz, Tupperware, FTD, Netflix, FIGS, and others.
In July, Shopify Inc. (NYSE:SHOP) reported its earnings for the quarter ended June 30, 2022. Its revenue increased by 16% y-o-y to $1.3 billion, while it reported a net loss of $1.2 billion, for the three months. It recorded an EPS of -$0.03, missing the analyst consensus by $0.06.
On August 11, Atlantic Equities analyst Kunaal Malde upgraded Shopify Inc. (NYSE:SHOP) to ‘Overweight’ from ‘Neutral’ with a $46 price target. The analyst believes that Shopify Inc. (NYSE:SHOP) is “a market leader in product innovation and a high-quality market share gainer”.
As of Q2 2022, Shopify Inc. (NYSE:SHOP) is the most sought-after Canadian stock among the 895 hedge funds tracked by Insider Monkey, as 60 of these hedge funds held its shares, valued at $3.3 billion. Ken Griffin’s Citadel Investment Group was the largest shareholder in the company.
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