This year has been a fantastic year for the stock market. Markets have been closing out at record highs on a regular basis despite escalating geopolitical tensions and heightened fears that a global recession may be on the horizon. It’s been an incredible journey from this time last year when investors were watching on as the stock market crumbled, with the S&P 500 Index SPX up 27.5% this year and the Dow Jones Industrial Average up 22.5%.
Unemployment in the US is at its lowest rate in half a century, and the latest GDP figures suggest the economy is growing faster than expected despite slumping manufacturing rates as a result of the trade war with China. However, reports this week suggest that the 18 month back-and-forth between the Trump administration and China may finally be coming to an end, potentially driving big gains in afflicted industries.
With the stock market buzz set to carry on into the New Year, we’ve picked out three companies that you may want to consider investing in to capitalize on the booming market. Let’s take a look.
Stocks to Watch: Canada Goose Holdings (TSX:GOOS) (NYSE:GOOS)
Canada Goose is a well-known manufacturer of luxury outdoor apparel and definitely one of the more curious stocks on this list. Following Canada Goose’s IPO in 2017, GOOS shares tripled, with valuation unusually exceeding earnings by 100 times. The company regularly grew sales and profits by more than 40% per annum; however, that has slowed in recent quarters partly as a result of the ongoing protests in Hong Kong, where two of the company’s flagship stores are located.
As a result, GOOS stock has dropped about 8.5% since January 1 but is still well above its debut price. Sales are still expected to grow by around 20% next year, while profit growth should be about 25%. With GOOS stock peaking in 2018, it basically looks as though expectations were too high then but are now too low, which represents a really good opportunity for investors. GOOS shares are currently trading for $40.16 in New York.
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Stocks to Watch: BlackBerry (TSX:BB) (NYSE:BB)
As we enter a new decade, you may be surprised to find Blackberry still knocking around, considering the phones it’s renowned for are a relic of the previous decade. However, there is a lot of potential in this stock, and given the imminent arrival of 5G, mobile stocks are in vogue right now. Blackberry recently acquired Cylance, a software firm that develops antivirus programs and other kinds of computer software that prevent, rather than reactively detect, viruses and malware. This will expand Blackberry’s product offerings and grow its customer list.
With growing sales and a gross margins averaging above 75%, Blackberry currently looks in its strongest position in years, and with a current value of $5.67, it could be a bargain for your 2020 portfolio.
Stocks to Watch: Cargojet Inc (TSX:CJT)
Cargojet is a scheduled cargo airline that operates services in both Canada and the US. This stock is really interesting because it is part of a secondary industry that is benefiting massively from the increasing dominance of e-commerce. The company currently has a 90% market dominance in Canada, meaning that of the goods purchased online that require overnight transport, 90% of them are carried by a Cargojet flight.
Even better for potential investors, CJT stock rocketed earlier in the year following a $600 million deal with Amazon (NASDAQ:AMZN) to further strengthen the preexisting relationship between the two. Under the terms of that deal, Cargojet will issue warrants to Amazon, allowing it to purchase up to 9.9% of voting shares over a six and a half year period at $91.78 per share if Amazon delivers up to $400 million in business volume over the same period.
So, that’s our pick of stocks to watch in the New Year. Are there any more that you’re keeping an eye on? Let us know!
Featured Image: DepositPhotos © borjomi88
