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Highlights
- Manufacturing sales in April shot up by 1.7 per cent, as per Statistics Canada.
- The Industrial Product Price Index (IPPI) zoomed 16.4 per cent year-over-year in April.
- Birchcliff’s net profit growth was 467 per cent YoY in Q1 FY2022.
Statistics Canada on Tuesday, June 14, revealed that manufacturing sales shot up by 1.7 per cent in April compared to March. This increase, the report said, was led by sales growth of 3.7 per cent in petroleum and coal products, 8.2 per cent in motor vehicles and 4.1 per cent in primary metals.
The public agency also pointed out that production rose by 11.2 per cent in aerospace products and parts industries. The Industrial Product Price Index (IPPI) also jumped by 0.8 per cent month-over-month (MoM) and was up by 16.4 per cent year-over-year (YoY) in April.
Also read: Understanding undervalued stocks and where to find them
Following are two TSX stocks that one can look into considering the growth in manufacturing sales in April.
Magna International Inc (TSX: MG)
Automotive vehicles and parts company Magna International owns and operates a network of 343 manufacturing operations and 91 product development, engineering and sales centres spread across 28 nations.
The mobility tech giant collaborates the cybersecurity firm BlackBerry (TSX:BB) for Advanced Driver Assistance Systems (ADAS) solutions to expedite growth in the automobile market. The company also announced unveiling its surround view system on the 2022 Toyota Tundra for a high-resolution view that will help drivers in situations of need.
As for MG stock, it was up by nearly six per cent from its 52-week low of C$ 70.16 (March 8) on June 14. According to EODHD/Others findings, MG stock broke its support level in February and has been trading lower since. Its Relative Strength Index (RSI) was 38.2 on June 14.
MG and BIR: 2 TSX stocks as manufacturing sales jump by 1.7% in April
Birchcliff Energy Ltd (TSX:BIR)
Birchcliff Energy generates a significant part of its revenue from natural gas production. The Canadian intermediate energy firm also engaged in oil production.
Birchcliff increased its average production by one per cent to 76,024 barrels of oil equivalent a day in Q1 FY2022 compared to Q1 FY2021. The oil and gas company noted a net profit growth of 467 per cent in the latest quarter compared to a year ago.
BIR scrip swelled by about 155 per cent in a year. As per EODHD/Others data, this stock breached multiple resistance levels in March and appears to be on an upward trajectory since then. However, its RSI value dropped to 44.03 as of June 14.
Bottomline
Magna International and Birchcliff Energy are two TSX stocks that could be considered in line with the latest April manufacturing sales data. These TSX stocks could also mitigate risk by diversifying investment in two industries – the vehicles and parts space and the oil and gas industry).
Also read: 5 TSX stocks to buy for +5% dividend yield - GWO, ENB, RNW, MFC, SRU
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
