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Summary
- Suncor Energy, Air Canada and Aurora Cannabis are three of the top trending stocks on the Toronto Stock Exchange this week.?
- While Suncor saw a bump in its demand after Warren Buffet’s investment in August, Air Canada’s stock price started climbing after the Canadian government?began relaxing?air travel?restrictions.?
- Aurora Cannabis?stocks, despite crashing?big-time during March,?continues to be on the list of most actively traded stocks on the TSX.
As another week begins at the Toronto Stock Exchange (TSX), Canadian investors are returning to their favorite stocks of Air Canada (TSX:AC) and Suncor (TSX:SU). Not too far behind in the race of top trending stocks is cannabis maker Aurora Cannabis (TSX:ACB). All three of these of shares, which took quite a beating during the coronavirus-inflicted market crash in March, have high 10-day moving average volume. Currently trading at under C$ 20, these scrips have been gaining attention with their low prices and the likely potential to draw good returns in the long run. Let’s take a closer look at these stocks’ performances.
Suncor Energy Inc (TSX:SU)
Current Share Price: C$ 18.19
The global oil and gas industry underwent major upheaval earlier this year following the commodity price crisis, pandemic-triggered drop in demand and subsequent disruption in production. Suncor Energy Inc, one of biggest integrated energy companies in Canada, did not escape this heat. Its share price fell by 57 per cent year-to-date (YTD). In the last three months too, Suncor stocks lost nearly 30 per cent in value. The company’s 2020 second quarter results reported that its funds from operations had fallen to C$ 488 million from C$ 3 billion in Q2 2019. Suncor’s Q2 2020 also bore the brunt of the after-tax hydrocarbon inventory losses worth C$ 397 million.
Despite all this, Suncor’s trading volume continues to ride high on the TSX. One of the factors fueling this trend is Berkshire Hathaway’s 1.3 per cent stake in the company. Back in August, American investor Warren Buffett announced that his company is acquiring a stake in Suncor, causing a surge in its share trade. Also, as global economies continue to ease their COVID-19 restrictions, there is a rebound in oil prices, while production inches back to normalcy.
Suncor Energy had slashed its dividends down to C$ 0.21 in the second quarter. Its current dividend yield stands at 4.06 per cent, and its market cap is C$ 27.7 billion.
Air Canada (TSX:SU)
Current Share Price: C$ 17.75
If there was a sector affected as gravely as the energy sector in the light of the pandemic, it was the aviation industry. With international borders being shut and travel topping the list of lockdown-imposed restrictions back home, Air Canada lost an incredible amount of business. Its stock price plummeted by 63 per cent year-to-date, and by 35 per cent in the last six months. From the glory of C$ 52.71 on January 14, Air Canada’s share value fell as low as C$ 9.27 on March 18. Its second quarter report of 2020 posted an 89 per cent drop in total revenue year-over-year. It also registered an operating loss of over C$ 1.5 billion in and a 96 per cent YoY decline in passengers carried in Q2 FY20.
Despite this, Air Canada remains one of the top traded shares on the TSX at the moment. Investors who look into long-term performance are drawn to Air Canada because of its track record. Its phoenix-like emergence following the 2003 bankruptcy due to the Severe Acute Respiratory Syndrome (SARS) pandemic is stuff of the legends. In 2019, before COVID-19 wreaked havoc on the global economic, the airline was one the top performing stocks on the TSX.
Air Canada currently has a market cap of C$ 5.26 billion. Its current price-to-book (P/B) ratio stands at 2.58 and its price-to-cash-flow (P/CF) ratio is 18.70.
Aurora Cannabis (TSX:ACB)
Current Share Price – C$ 9.18
Market analysts have been in two minds about the position of Canada’s cannabis industry in the wake of the COVID-19 pandemic. Big-time pot manufacturers like Aurora Cannabis saw a steep drop in share value during the market crash in March and Health Canada hinted that recreational cannabis market may be flattening. Meanwhile, investors keep turning to pot stocks with the belief that they are likely to result in good returns in the long run.
Aurora Cannabis, a medicinal and adult-use recreational cannabis manufacturer, has seen its stock price plunge nearly 35 per cent in the last six months. Meanwhile, its trading volume continues to soar. Its 10-day average trading volume is 1.9 million, and is currently one of the most actively traded stocks on the TSX.
One of factors contributing to Aurora’s current demand is its long-term performance at the stock market. Since its market debut on the TSX in 2014, Aurora’s share value has surged over 2,600 per cent in the last six years. The ‘Green Rush’ of 2018 also saw its scrips go from its starting point of C$ 0.36 in May 2014 to C$ 164.5 in October 2018, galloping by over 45,000 per cent. The 2019 cannabis market correction and this year’s pandemic brought Aurora down from its high horse, with its stock price sliding by 94.4 per cent between October 2018 and September 2020.
Nonetheless, Aurora Cannabis’ Q3 report ending 31 March 2020 posted a total revenue of C$ 75.5 million, up from C$ 56.03 million in December 2019. The company’s fourth quarter report is due September end.
Most recently, Aurora Cannabis’ announced that in Q1 2021, it is expecting an impairment charge that could be somewhere between C$ 1.6 billion to C$ 1.8 billion, and a C$ 30 million-charge for ending its deal with mixed martial arts company Ultimate Fighting Championship (UFC). These announcements led to a drop in its share price.
