In this article, we discuss 5 best TSX stocks to buy now. If you want to see more stocks in this selection, check out 10 Best TSX Stocks To Buy Now.
5. Agnico Eagle Mines Limited (TSX:AEM.TO)
Number of Hedge Fund Holders: 31
Agnico Eagle Mines Limited (TSX:AEM.TO) is a Toronto-based company engaged in the exploration, development, and production of mineral properties in Canada, Mexico, and Finland. The company primarily produces gold, silver, zinc, and copper. On September 16, Agnico Eagle Mines Limited (TSX:AEM.TO) announced that it has agreed to subscribe for a 50% interest in Minas de San Nicolás (MSN) in Mexico, a wholly-owned subsidiary of Teck Resources Limited (NYSE:TECK). According to the agreement, Agnico Eagle Mines Limited (TSX:AEM.TO) will subscribe for $580 million of MSN shares.
On October 17, Barclays analyst Matthew Murphy raised the price target on Agnico Eagle Mines Limited (TSX:AEM.TO) to $63 from $62 and reiterated an Overweight rating on the shares. The analyst prefers gold equities over base metals amid slowing global growth.
According to Insider Monkey’s Q2 data, 31 hedge funds were long Agnico Eagle Mines Limited (TSX:AEM.TO), compared to 38 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 17.4 million shares worth $798.45 million.
4. Waste Connections, Inc. (TSX:WCN.TO)
Number of Hedge Fund Holders: 34
Waste Connections, Inc. (TSX:WCN.TO) is based in Woodbridge, Canada, and the company provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the United States and Canada. On August 4, Waste Connections, Inc. (TSX:WCN.TO) announced an underwritten public offering of senior unsecured notes, and the net proceeds will be used to repay a part of the outstanding debt under its revolving credit facility. It is one of the best TSX stocks to buy now.
On October 24, Jefferies analyst Stephanie Moore initiated coverage of Waste Connections, Inc. (TSX:WCN.TO) with a Buy rating and a $165 price target. The analyst said the stock is best-in-class in the waste industry, with above average pricing growth and margins due to its suburban end markets, as well as the exclusivity from its franchise contracts. She sees at least low double digit revenue growth for Waste Connections, Inc. (TSX:WCN.TO) in 2023.
According to Insider Monkey’s data, 34 hedge funds were long Waste Connections, Inc. (TSX:WCN.TO) at the end of June 2022, compared to 35 funds in the prior quarter. Henry Ellenbogen’s Durable Capital Partners is the biggest stakeholder of the company, with nearly 2 million shares worth $239.2 million.
3. Barrick Gold Corporation (TSX:ABX.TO)
Number of Hedge Fund Holders: 40
Barrick Gold Corporation (TSX:ABX.TO) is a Toronto-based company specializing in the exploration, development, production, and sale of gold and copper properties. The company’s gold mines are located in Argentina, Canada, Côte d’Ivoire, the Democratic Republic of Congo, Dominican Republic, Mali, Tanzania, and the United States. Barrick Gold Corporation (TSX:ABX.TO) announced that it remains on track to achieve FY 2022 production guidance, with gold forecasted at the low end of the guidance and copper expected at the midpoint. The company is also making “steady progress” towards the final agreements and legal steps which will enable the development of the $7 billion Reko Diq gold project in Pakistan.
On October 19, Stifel analyst Ingrid Rico maintained a Buy rating on Barrick Gold Corporation (TSX:ABX.TO) but trimmed the price target on the shares to C$33 from C$35.25.
As per Insider Monkey’s data, 40 hedge funds were bullish on Barrick Gold Corporation (TSX:ABX.TO) at the end of June 2022, compared to 45 funds in the last quarter. It is one of the best TSX stocks to buy according to elite hedge funds.
2. Cenovus Energy Inc. (TSX:CVE.TO)
Number of Hedge Fund Holders: 42
Cenovus Energy Inc. (TSX:CVE.TO) was founded in 2009 and is headquartered in Calgary, Canada. The company develops, produces, and markets crude oil, natural gas liquids, and natural gas in Canada, the United States, and the Asia Pacific region. The company operates through Oil Sands, Conventional, Offshore, Canadian Manufacturing, U.S. Manufacturing, and Retail segments. Cenovus Energy Inc. (TSX:CVE.TO) is one of the premier TSX stocks to buy.
On October 19, Jefferies analyst Lloyd Byrne initiated coverage of Cenovus Energy Inc. (TSX:CVE.TO) with a Buy rating and a C$35 price target. He believes the “Option Value” of energy is up again, supported by a restricted capital cycle. While this is most apparent in oil and gas, it is also evident in energy transition firms, noted the analyst, who believes energy’s “Option Value can stay higher for longer” without a meaningful increase in investment across the industry.
According to Insider Monkey’s data, 42 hedge funds held stakes worth $2.90 billion in Cenovus Energy Inc. (TSX:CVE.TO) at the end of the second quarter of 2022, compared to 44 funds in the prior quarter worth $2.4 billion. Eric W. Mandelblatt’s Soroban Capital Partners is the biggest position holder in the company, with 50.3 million shares worth about $957 million.
Here is what L1 Capital specifically said about Cenovus Energy Inc. (TSX:CVE.TO) in its Q2 2022 investor letter:
“MEG Energy and Cenovus Energy Inc. (NYSE:CVE): We continue to remain positive on the outlook for Energy. While a potential U.S. recession would result in softer oil demand, we believe this would be more than outweighed by China reopening over the coming year (which would see a major lift in car and air traffic). Oil supply continues to remain constrained with sustained declines in global inventories and OPEC+ remains unable to grow production significantly. With the sell-off in energy stocks, MEG and Cenovus are currently generating more than 20% of their market cap in cash flow with large dividends and share buybacks to come.
Cenovus Energy (Long +14%) shares rallied, driven by continued strong free cash flow generation, as well as being positioned to benefit from strong refining margins and downstream operations. The company recently announced a significant increase in dividends, which gives us greater confidence on the potential for a 100% return of free cash flow generation via dividends and buybacks from early CY23. Given the long-life nature of its oil sand assets and its low cost of production, we estimate the company is free cash flow break-even at an oil price of ~US$40/bbl. At present, oil prices are more than double this break-even point, implying considerable upside to consensus cash flow estimates (if prices remain near current levels). There are also additional value realization catalysts with the company continuing to progress the de-gearing of its balance sheet via organic cash generation and asset sales.”
1. Shopify Inc. (NYSE:SHOP.TO)
Number of Hedge Fund Holders: 60
Shopify Inc. (NYSE:SHOP.TO) is one of the best TSX stocks to invest in. The company provides a commerce platform and related services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. On October 7, The European Commission reported that Shopify Inc. (NYSE:SHOP.TO) has agreed to boost consumer protections after receiving multiple complaints.
On October 21, RBC Capital analyst Paul Treiber reaffirmed an Outperform rating on Shopify Inc. (NYSE:SHOP.TO) but trimmed the price target on the stock to $55 from $60. The analyst believes Shopify Inc. (NYSE:SHOP.TO) may post Q3 revenue above consensus estimates on the back of stronger gross merchandise volume growth. While macro uncertainty and higher risk-free rates will potentially weigh on Shopify Inc. (NYSE:SHOP.TO)’s valuation through the end of this year, the company “is one of the most compelling long-term growth stories in our coverage universe,” noted the analyst.
According to Insider Monkey’s Q2 data, Shopify Inc. (NYSE:SHOP.TO) was part of 60 hedge fund portfolios, compared to 72 in the prior quarter. Cathie Wood’s ARK Investment Management held a prominent stake in the company, comprising 1.2 million shares worth $455.20 million.
Here is what Rowan Street Capital specifically said about Shopify Inc. (NYSE:SHOP.TO) in its August 2022 investor letter:
“The following quote from the Q2 earnings call by Toby Lutke (CEO) best explains the transition that Shopify Inc. (NYSE:SHOP)’s business is going through:
‘Shopify has always been a company that makes the big strategic bets our merchants demand of us. This is how we win. During the pandemic, we made a bet that retail spend would disproportionately favor e-commerce at a much higher pace than it has. Our belief was that the channel mix, the share of dollars that travel through e-commerce rather than physical retail, would permanently leap ahead. As we built for the digital leap, we stepped our efforts and expanded the company accordingly. We couldn’t know for sure at the time, but we did know that if the prediction came true, we would have to rapidly scale the company to meet that future. Fast forward to now, as things have turned out differently. While the normalized rate of spend online, which is where most of our merchants’ orders occur, has reset certainly higher than where it was in 2019, the rate is lower than we had planned for. In short, we overshot our prediction. Recalibrating our investments and spending, we are making sure we do not sacrifice the components we feel are critical for Shopify to remain in an enviable position in a massive growing market as an enabler of multichannel commerce.’”
You can also take a look at 11 Best Furniture Stocks To Buy and 10 Best Silver Mining Stocks To Invest In.
