Bombardier, HEXO & Jaguar Mining: 3 trending stocks under C$1 to boost your investment

(Featured Image courtesy: Pixabay)

Summary

• The COVID-19 pandemic has played havoc in stock markets in 2020.
• After witnessing steep lows in March, the market is now slowly recovering.
• Shares of Bombardier (TSX:BBD), HEXO (TSX:HEXO), and Jaguar Mining (TSX:JAG) have emerged as top trending stocks on the TSX for a variety of reasons.
• As Canadian equity markets emerge out of the pandemic-induced morass, here is a detailed look at these three stocks, which are currently priced below C$ 1 per share.

The COVID-19 pandemic has enacted as a key catalyst to some of the biggest and lowest stock price moves we’ve seen in 2020. After witnessing steep lows in March, the market has now started recovering. In the last three months, stocks of small-cap companies such as Bombardier, HEXO and Jaguar Mining have been trending heavily on the Toronto Stock Exchange. While Jaguar Mining has been an investors’ favorite due to the current gold rally, HEXO emerged as a company with a robust future in the expanding cannabis market. Stocks of top manufacturer Bombardier, like Air Canada, are now available at discount prices, leading to high volumes trade.

As Canadian equity markets emerge out of the pandemic-induced morass, here is a look at three trending stocks currently priced below C$ 1.

HEXO Corporation (TSX:HEXO)

Stock Price: C$ 0.93

Despite a 55 per cent year-to-date (YTD) decline in stock prices, HEXO Corp remains an investor favorite. The pot firm recently completed C$ 34.5 million market offering program and has a 10-day average trading volume of 2,712,621.

HEXO has failed to make profits in over 12 months but its top line increased by 30 per cent quarter-over-quarter to C$ 30.9 million in the third quarter fiscal 2020 – an indicator of increased business opportunities. The stocks advanced by 27 percent in last three months.

The cannabis firm has recently introduced ready-to-use vape pens and launched medical cannabis products in Israel. HEXO is also the first licensed producer to introduce hashish, products derived from resin of cannabis plant buds, in Canadian markets.

Its current market capitalization is C$ 431 million while price-to-book ratio is 0.809 and earnings per share is minus (-) C$ 1.69

Jaguar Mining Inc. (TSX:JAG)

Stock Price: C$ 0.84

Next on our list is junior gold mining company Jaguar Mining, whose stocks have posted an impressive 330 per cent gains this year. The company has a current market capitalization of C$ 608 million and earnings per share of C$ 0.08. Its current P/E ratio is 10 while P/B ratio is approximately 2.9.

Jaguar Mining has gained tremendously with the recent gold rally in the pandemic-led equity markets. Once, struggling to prove itself to the investors, the company has also undergone major financial restructuring process over the last couple of years. It has mines in Brazil.

In second quarter 2020 financial results, the company’s gross profit surged 312 per cent YoY to US$ 23.9 million. The net income in the same quarter was US$ 19.2 million. It ended the quarter with a treasury cash of US$ 30.2 million as compared to cash of US$ 12.1 million in first quarter of 2020.

Gold production went up 28 per cent YoY with 23,483 ounces produced in Q2 2020.

The company’s shares have yielded 112.6 per cent returns over a quarter and 40 per cent returns in a month. The company does not pay dividends.

Top Shareholders of Jaguar Mining

(Image source: Jaguar Mining Investors’ Deck)

Bombardier (TSX:BBD)

Stock Price: C$ 0.40

The sharp nosedive in Bombardier’s stocks did not arrive with the pandemic. It’s been on a downhill ride since July 2018. A closer inspection shows the scrips devalued by 75 per cent between 2015 and 2020.

Once a major player in aviation and transportation manufacturing space, Bombardier is now a mere shell of its former glory. The stock shed 79 per cent of its value this year. It has declined by 11 per cent in a month and 17 per cent in a quarter.

Once a dividend payer, Bombardier let go of its Dash 8 turboprop, Q400 and CSeries, and CRJ Regional Jet programs by 2020 to improve the balance sheet. The company was also forced to lay off 2,500 aerospace workers amid the pandemic. Going forward, it will focus on private business jets.

While selling off multiple business units has improved Bombardier’s finances, it has clipped its growth machines. In 2014, the manufacturer racked up massive debts on the CSeries aircraft, something still weighing heavy on its finances. To reduce debt and improve its liquidity position, Bombardier sold of transportation division to Alstom in July this year.

Bombardier’s revenue was down 37 percent YoY to US$ 2.7 billion at the end of second quarter. Free cash flow usage was US$ 1.0 billion. Its current market cap is C$ 851 million and P/B ratio is negative (minus) 0.113 percent.