AUS
NZ
UK
CA
USA
IND
_10_04_2024_16_38_50_427275.jpg)
Highlights
- Transat’s planned capacity for summer 2022 accounts for 89 per cent of the 2019 level.
- TRZ stock has surged by about six per cent from a 52-week low of C$ 3.74 (December 20, 2021).
- Cineplex increased its total revenue by 452.3 per cent in Q1 FY2022 compared to Q1 2021.
The summer season is here, and people are already planning to go out and enjoy with their family and friends. Likewise, investors may also be looking for quality summer stocks that might benefit from the seasonal rush.
With eased public health restrictions, including relaxed vaccine mandates for domestic travellers, TSX stocks like Transat A.T. (TSX:TRZ) could see an impact on its tourism business. On the other hand, entertainment stocks like Cineplex (TSX:CGX) may also draw attention with more people heading to movie theatres to relax.
On that note, let us briefly discuss these two TSX stocks.
Transat A.T. Inc (TSX:TRZ)
Transat A.T. provides holiday packages, including hotel stays and air travel. The Canadian tourism company is continuing its recovery and implementing its strategic plan, slowed down by the omicron outbreak earlier in 2022.
The Canadian firm relaunched its pre-pandemic network routes and entered into codeshare agreements with WestJet and Porter. The company also improved its network by adding new direct flights and connections on the current routes.
Transat’s planned capacity for this summer accounts for 89 per cent of the 2019 level. The company also plans to expand its capacity by five per cent in the domestic market compared to 2019 and increase its footprints in the transborder market.
TRZ stock has surged by about six per cent from a 52-week low of C$ 3.74 (December 20, 2021). According to EODHD/Others data, Transat seems to be on a consolidated trend with a Relative Strength Index (RSI) value of 39.15 on June 15.
2 Summer stocks for July: Transat (TRZ) and Cineplex (CGX)
Also read: Understanding undervalued stocks and where to find them
Cineplex Inc (TSX: CGX)
Movie theatre owner Cineplex increased its total revenue by 452.3 per cent in Q1 FY2022 compared to the same period of 2021. The entertainment company reported a notable surge in theatre attendance to 6.7 million in the latest quarter compared to Q1 2021.
Though Cineplex reported a net loss of C$ 42.2 million in the first three months of 2022, it reflected a year-over-year (YoY) improvement of 52.9 per cent.
CGX stock hit a new 52-week low of C$ 10.9 on June 14 and was trading at C$ 11.29 per share at 10:55 AM EST on June 15. As per EODHD/Others, CGX’s RSI value was 36.65 on June 15.
Bottomline
Canadian investors could explore Transat A.T. and Cineplex stocks in July as these companies stand to benefit from increased travel and entertainment demand likely to prevail in the summer season. However, economic forces like inflation could affect consumer behaviour and such business, which needs to be considered while exploring these stocks.
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.
