TPZ, TVE, FM, LUN & CAS: 5 TSX commodity stocks amid slowdown fears

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TPZ, TVE, FM, LUN & CAS: 5 TSX commodity stocks amid slowdown fears

TPZ, TVE, FM, LUN & CAS: 5 TSX commodity stocks amid slowdown fears
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Highlights

  • China’s industrial production in April fell nearly three per cent compared to one year earlier when a 0.4 per cent increase was expected
  • This could exasperate the global supply chain crisis and experts say fear of a global economic slowdown may be pushing market sentiment to be more bearish
  • The TSX Composite Index seems more insulated from the events this year because it is a commodity heavy index

After some cities in China had Covid-19 lockdowns, it was reported May 16 that in April, retail sales in the world’s most populated country fell by 11.1 per cent year-over-year, significantly more than what was expected.

What’s more is that industrial production in April fell nearly three per cent compared to one year earlier when a 0.4 per cent increase was expected. Considering that the second-biggest economy in the world has pretty much been its factory in recent decades, this seems concerning.

This would likely have ripple effects for the rest of the world including exasperating the global supply chain crisis and experts say fear of this may be pushing market sentiment to be more bearish than it already was so far.

The TSX Composite Index seems more insulated from the events this year, be it the Russia-Ukraine war or China’s lockdown, because it is a commodity heavy index. While Nasdaq’s benchmark and the S&P 500 ended in the red, Canada’s benchmark index gained 0.53 per cent, largely driven by commodity stocks.

So, let’s look at some TSX commodity stocks.

Topaz Energy Corp (TSX:TPZ)

TPZ gained 5.8 per cent Monday, May 16, to close at C$23.83. It has risen 62 per cent in a year and its return for 2022 is 33.5 per cent.

Its current 52-week high is C$24 seen on May 5, but its low for that period came way back on May 19, 2021, when it traded at C$14.35 and it has soared over 66 per cent from that.

Its trajectory over the past year has generally been upward. Topaz has a price-to-earnings (P/E) ratio of 86.7 and its dividend yield is 4.4 per cent.

Dividend yield is the dividends paid out by a given stock relative to its cost price.

Tamarack Valley Energy Ltd (TSX:TVE)

TVE grew by over five per cent Monday to close at C$4.79. The oil and gas stock has soared 106 per cent in nine months.

Its 12-month high was on March 8 when it touched C$6.09 and it is now 21 per cent lower. Its dividend yield is 2.1 per cent.

TVE has the lowest P/E ratio on this list, that of 3.9, which means it is most desirable in this regard. The P/E ratio represents the amount of dollars needed to be invested to bag one dollar of profit, so the lower, the better.

First Quantum Minerals Ltd (TSX:FM)

FM spiked over five per cent Monday and stood at C$34.12 at market close. Over the last six months, it has gained 23 per cent and year-to-date growth sits at 13 per cent.

It hit a yearly high of C$45.38 on April 4 and is down 25 per cent from that. The stock has a dividend yield of 0.03 per cent and its P/E ratio is 16.6.

Lundin Mining Corp (TSX:LUN)

LUN’s growth on Monday, when it closed at C$10.23, was 4.18 per cent. The stock has gained 3.5 per cent this year.

Before its gain seen on Monday, it was likely in undervalued territory. The stock’s P/E ratio is 5.8 and its dividend yield is 3.5 per cent.

Cascades Inc (TSX:CAS)

CAS gained 6.6 per cent on Monday to close at C$10.47. Its year-to-date (YTD) loss is 25 per cent.

On May 12, it fell to a 52-week low of C$9.08 at which point it was likely undervalued. It has recovered 15.3 per cent since.

The stock’s P/E ratio is 7.7 and its dividend yield is 4.6 per cent.

Also read: NXJ, RDL, SW, OPT & ABST: 5 TSX tech stocks that look like bargains

TPZ, TVE, FM, LUN & CAS: 5 TSX commodity stocks amid slowdown fears

Bottom line

The TSX Composite Index is down 4.8 per cent YTD. By contrast, the S&P 500 is down about 16 per cent in that period and the Nasdaq Composite is in the red by 25.5 per cent.

This difference may be attributed to the fact that Canada’s benchmark index is a commodity heavy index with energy and materials being 31.4 per cent of it.

The S&P/TSX Capped Energy Index has rocketed 53.4 per cent this year. The S&P/TSX Composite Index Metals and Mining (Industry) is also in the green for the year.

Also read: TSX in green with energy & base metals up, commodities & loonie gain

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