Below we presented the list of 5 best Canadian stocks to buy now. For our detailed discussion and a more comprehensive list please see 11 best Canadian stocks to buy now.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the best Canadian stocks to buy now.
5. Brookfield Asset Management (NYSE:BAM)
No of HFs: 35
Total Value of HF Holdings: $1.08 Billion
BAM ranks as the fifth-best Canadian stock to buy now. Third Avenue Management mention some of their comments on the stock in their 3Q 2020 investor letter,
“Third Avenue has long championed enterprises with sound business practices run by aligned control groups that exhibit strong stewardship. Within Third Avenue’s real estate strategy, this oftentimes leads the Fund to “pass” on investments in companies with uncertain environmental liabilities, business models that could be deemed predatory, and corporate governance structures that are stacked against key stakeholders. Consequently, the select-set of real estate and real estate-related business that make it into the Third Avenue Real Estate Value Fund represent some of the true industry leaders in respect to their ESG practices, including Brookfield Asset Management (a leading alternative asset manager), which controls one of the largest privately-held portfolios of renewable energy assets globally with more than 19,000 MW of hydroelectric, wind, and solar capacity.”
4. Bausch Health Companies (NYSE:BHC)
No of HFs: 40
Total Value of HF Holdings: $1.60 Billion
BHC was mentioned as one of Billionaire John Paulson’s Top 5 Stock Picks. The top hedge fund holder of this stock is John Paulson’s Paulson & Co. which had $401 million invested in the stock at the end of September. An insider purchased 948,353 shares at around $19 in June 2020. The stock is down 36% since then. Chou Associates Management mentioned a few of their comments in the stock in their Q2 2020 investor letter.
“In early August, Bausch Health Companies Inc. announced that it is planning to spin off its eye care business, Bausch + Lomb, into an independent publicly traded company. This will allow the company to concentrate on its gastroenterology, aesthetics/dermatology, neurology and international pharma business.
Chairman and CEO Joseph Papa said, “We’ve looked at the value of our pure health companies like Alcon and Cooper and believe that Bausch + Lomb would compare very favorably when investors have an opportunity to make a judgment about the relative value of the stand-alone business”.
Comparables like Cooper Companies and Alcon Inc. are currently trading between 18 and 20 times EBITDA. If Bausch + Lomb trades at similar multiples as a stand-alone company, the total value of Bausch Health using sum-of-the-parts method, net of debt, should be worth north of $35 per share, as an inference. For a long time we have felt that Bausch was undervalued, but the investors were not giving credit that management has done a good job in running the operations, selling non-core assets, as well as de-leveraging its balance sheet. They felt the process was too slow, we hope the spin-off of Bausch + Lomb unit will be the catalyst that is needed for investors to price the company closer to its intrinsic value.”
3. Telus Corporation (NYSE:TU)
No of HFs: 51
Total Value of HF Holdings: $1.15 Billion
TU is the third-best Canadian stock to buy now. The company is known for their engagement in the business of providing communication products and services. These services include data, internet, voice and entertainment video, etc. The company recently announced their agreement to acquire Lionbridge Al through Telus International. The acquisition will be at a purchase price of approximately C$1.2 billion (approximately US$935 million) consisting of debt and equity, subject to customary closing adjustments. Closing is expected to occur on December 31, 2020. President and CEO of Telus, Darren Entwistle said,
“Today’s announcement advances TELUS’ commitment to harness the power of technology to provide outstanding customer experiences on a global basis, while accelerating the digital transformation and strategic growth journey of TELUS International. The acquisition will add key capabilities and diversity to TELUS International’s suite of next-generation digital solutions consistent with the ongoing execution of its growth agenda. We continue to move forward with our plans for the TELUS International IPO, which is targeted for the first quarter of 2021,”
2. Barrick Gold Corporation (NYSE:GOLD)
No of HFs: 52
Total Value of HF Holdings: $3.09 Billion
GOLD was mentioned in the First Eagle Investment Management Q2 2020 investor letter.
“Barrick Gold has continued to execute through the challenges posed by the pandemic, with strong production results and low costs driving improved free cash flow reported for first quarter 2020. Barrick has drawn on previous management experience with Ebola outbreaks in Africa to formulate a plan to promote the safety of its employees and communities in the face of Covid19. The company has maintained its annual production guidance for 2020 with only a slight downward adjustment, due to a lease dispute with the government of Papua New Guinea. We believe the company’s prudent management team and strong and diversified asset base position it well to manage through the current trying environment.”
1. Shopify Inc. (NYSE:SHOP)
No of HFs: 81
Total Value of HF Holdings: $7.51 Billion
The number one best Canadian stock to buy now is SHOP. The stock was mentioned as one of the Top 10 Cloud Computing Stocks to Buy. In an article, McLain Capital mentioned that SHOP is the fastest growing yet unprofitable e-commerce platform.
“Shopify (SHOP) : The currently fast growing, yet unprofitable e-commerce platform for retailers trades at a $120bln valuation on $1.6bln in 2019 revenues, a valuation of 75x sales for a company that ran -8% net margins. Assuming the business will run a normal 10% net margin and trade at a generous 25x P/E in 2030, revenue will need to grow by a factor of 80 times current levels for shareholders to earn a 10% IRR over the next 10 years.”
Please also see 10 Best Gold Stocks to Buy Now According to Billionaire Hedge Fund and 10 Best Software Stocks to Buy Now.
