After months of sleep, Air Canada (TSX: AC) is finally showing some vitality. It’s too early to tell if the stock is finally recovering (fueled by vaccine-focused optimism) or if this is just one of the usual temporary increases in the stock. If the stock continues to climb at a steady pace, it will support many investors who have set Air Canada as the ultimate takeover stock.
That said, Air Canada may still be too risky a bet, especially after the company has had to dilute its shares to improve its liquidity position. While this does not exactly hamper the recovery of the stock, it could prevent the stock from reaching its pre-pandemic assessment and growth potential any time soon. Therefore, you may want to consider two TSX stocks that are better positioned for growth.
A digital “insurance” company
Today we are heavily dependent on cell phones. Can you imagine how much trouble you would have if you woke up tomorrow and your phone was cleaned and your data was not backed up to a cloud? Imagine the same thing happening to a business.
This is where businesses like Absolute software (TSX: ABT) comes in. It’s a Vancouver-based company who specializes in endpoint security and data risk management. Absolute code / software embedded with firmware in IT assets enables a business to monitor and control its network of IT devices and all data-related assets. It can prevent theft and loss of data and provides a secure computing environment.
For investors, Absolute is a decent growth stock with significantly greater upside potential than Air Canada. Granted, most of that potential manifested around this year’s market crash, but it was powerful enough to bring the company’s five-year CAGR up to nearly 18%. So if you invest $ 5,000 in the business now, and it keeps that pace, you would have $ 11,000 in the business after five years.
One of the best salvage stocks
While Speed of light (TSX: LSPD) (NYSE: LSPD) was not the best recovery action after the market collapse, it is certainly one of the few firsts. From its lowest valuation in March to its current price, the stock is up 330%. If the market collapses again, it is a recovery stock that you should look into. If you had invested $ 5,000 when the company was trading at $ 12 per share in March, you would have increased that amount to $ 21,000 in less than a year.
Lightspeed is also part of a lucrative and growing market: e-commerce. The e-commerce market has not yet reached its saturation point and is continuously improving and evolving thanks to technological advancements and dynamic consumer needs. If Lightspeed can deliver on its promise to small and medium-sized businesses and manage to retain and grow its customer list, the stock could continue to fly higher.
Air Canada’s glory days are over, but its dominance in Canada’s airline industry will only increase once the Trans At agreements are concluded. But even if the company does recover, it would take years for it to surpass losses from the 2020 stock market crash. Both tech stocks are in a much better position and can be valuable additions to your portfolio.
Silly contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of Lightspeed POS Inc.