In this article, we will take a look at the 5 best Canadian stocks to buy and hold. To see more such companies, go directly to 13 Best Canadian Stocks to Buy and Hold.
5. Canadian Pacific Kansas City Limited (NYSE:CP)
Number of Hedge Fund Holders: 52
Canadian Pacific Kansas City Limited (NYSE:CP) ranks 5th in our list of the best Canadian stocks to buy and hold according to hedge funds. Canadian Pacific Kansas City Limited (NYSE:CP) recently posted Q3 results. Adjusted EPS in the period came in at C$0.92, beating estimates by C$0.26. Revenue in the quarter jumped a massive 44.6% on a year over year basis to C$3.34 billion, surpassing estimates by C$900 million.
Insider Monkey’s proprietary database of 910 hedge funds shows that 52 hedge funds were long Canadian Pacific Kansas City Limited (NYSE:CP) as of the end of the second quarter of 2023.
Pershing Square Holdings made the following comment about Canadian Pacific Kansas City Limited (NYSE:CP) in its first half 2023 investor letter:
“Canadian Pacific Kansas City Limited (NYSE:CP) is a high-quality business with significant earnings growth potential that operates in an oligopolistic industry with considerable barriers to entry and significant pricing power due to its high quality competitive transportation offering. After receiving regulatory approval from the Surface Transportation Board on March 15, Canadian Pacific closed the acquisition of Kansas City Southern on April 14th and renamed the combined company Canadian Pacific Kansas City.
CPKC is a high-quality business with significant earnings growth potential that operates in an oligopolistic industry with considerable barriers to entry and significant pricing power due to its high quality competitive transportation offering. After receiving regulatory approval from the Surface Transportation Board on March 15, Canadian Pacific closed the acquisition of Kansas City Southern on April 14th and renamed the combined company Canadian Pacific Kansas City. …”
4. Cameco Corporation (NYSE:CCJ)
Number of Hedge Fund Holders: 54
Canadian-based uranium company Cameco Corporation (NYSE:CCJ) has been on an absolute tear this year, gaining 71% through October 26.
A total of 52 hedge funds in Insider Monkey’s database of 910 hedge funds had stakes in Cameco Corporation (NYSE:CCJ). The biggest hedge fund stakeholder of Cameco Corporation (NYSE:CCJ) was Richard Driehaus’s Driehaus Capital which had a $131 million stake in the company.
Aristotle Capital’s International Equity strategy made the following comment about Cameco Corporation (NYSE:CCJ) in its second quarter 2023 investor letter:
“Cameco Corporation (NYSE:CCJ), the world’s largest publicly traded uranium producer, was the top contributor during the period. Over the past year, there has been a rise in support from governments and policymakers for nuclear energy as countries realize it can play a crucial role in lowering dependence on fossil fuels to meet environmental pledges and goals. In addition, Russia’s war in Ukraine had led to an increase in the price of competing carbon fuels and heightened attention on energy security. Although such global market dynamics have likely favored Cameco in the short term, we believe the company will benefit long term from its financial discipline and advantaged assets. (Its Canadian mines—Cigar Lake and McArthur River/Key Lake— produce some of the world’s highest‐grade uranium.) Cameco has also slowly ramped up production while obtaining long‐term contracts. As such, in 2022, Cameco signed a record number of long‐term supply contracts and conversion services (where yellow cake is processed and readied for enrichment operations). This success has continued into 2023, with Cameco having recently secured an additional 12‐year contract with Energoatom, Ukraine’s state‐owned nuclear energy company, as well as a 10‐year agreement with Bulgaria. Central and Eastern Europe are new markets for Cameco, and this supports our belief that the company is well‐positioned to win new business in the regions that were historically dominated by Russia. Moreover, we look forward to Cameco’s planned acquisition of Westinghouse Electric Company (expected to close during the second half of 2023), as we believe Westinghouse’s market‐leading downstream capabilities will align well with Cameco’s production and fuel services to offer a highly competitive nuclear fuel solution.”
3. Lululemon Athletica Inc. (NASDAQ:LULU)
Number of Hedge Fund Holders: 61
UBS recently talked in detail about how generative AI would positively impact softline fashion retail companies. The firm thinks generative AI would help companies decrease their marketing spending and optimize their efforts to boost sales. One example of how generative AI could help boost sales is by creating personalized messages at checkouts for customers based on their history to urge them complete their buying process. Lululemon Athletica Inc. (NASDAQ:LULU) was one of the stocks which UBS believes would enjoy gains from the generative AI boom.
Kinsman Oak Capital Partners made the following comment about Lululemon Athletica Inc. (NASDAQ:LULU) in its first quarter 2023 investor letter:
“What is relatively new, however, is that we are beginning to see substantial write-downs and impairment charges. For instance, Lululemon Athletica Inc. (NASDAQ:LULU) is already exploring a sale of Mirror, the struggling fitness technology company it bought less than three years ago for half a billion dollars. Lululemon executives recently announced a $433 million impairment charge on the business (-89%). That is not an insignificant amount of money.”
2. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 74
Shopify Inc. (NYSE:SHOP) shares have rewarded investors this year, having gained about 35% year to date. Shopify Inc. (NYSE:SHOP) moved primarily on the company’s deal with Amazon after Shopify merchants can offer a Buy with Prime option for payment processing. Many Wall Street analysts see this deal as a win-win for both companies.
A total of 74 hedge funds tracked by Insider Monkey were long Shopify Inc. (NYSE:SHOP) as of the end of the second quarter of 2023, significantly up from 66 hedge funds in the previous quarter.
RiverPark Large Growth Fund made the following comment about Shopify Inc. (NYSE:SHOP) in its Q2 2023 investor letter:
“Shopify Inc. (NYSE:SHOP): Shopify shares were a top contributor in the quarter following strong 1Q results and the announced divestiture of its logistics business. Gross Merchandise Volume (GMV) grew 15% year over year as e-commerce sales broadly rebounded and Shopify continued to take market share. Revenue grew 25% driven by increased merchant adoption of multiple products, especially Shop Pay. The company generated $86 million of free cash flow, up from a $46 million loss last year, and announced expectations to be free cash flow positive for each quarter for the rest of the year. The company had previously announced several cost savings plans, which are driving margin and free cash flow improvement, and now plans to divest its capital-intensive logistics arm. Faster growing revenue, lower operating expenses, and a less capital-intensive future were all cheered on by the market.
Last year, 10% of US retail e-commerce sales flowed through SHOP, second only to Amazon, and the company is still enjoying significant tailwinds as retail merchants of all sizes adopt SHOP’s software tools to display, manage and sell their products across a dozen different sales channels. We believe that the overall growth of e-commerce, combined with the development of new products and services, such as its digital wallet Shop Pay, should continue to drive revenue growth of more than 20% per year over the next several years, accompanied by re-acceleration of operating margin growth and FCF generation.”
1. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 79
Canadian mining company Teck Resources Limited (NYSE:TECK) ranks 1st in our list of the best Canadian stocks to buy and hold according to smart money investors. Teck Resources Limited (NYSE:TECK) recently posted third quarter results. Adjusted EPS in the period came in at C$0.76. Revenue in the quarter fell 15.5% year over year to $3.6 billion.
As of the end of the second quarter of 2023, 79 hedge funds out of the 910 funds tracked by Insider Monkey reported owning stakes in Teck Resources Limited (NYSE:TECK).
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