Forget Air Canada: 3 TSX Stocks to Hold Forever

Air Canada (TSX:AC) is still facing major challenges in the near term. Investors may want to turn to other top TSX stocks today.

| More on:

When this year started, I’d discussed the prospects for Air Canada in the face of the COVID-19 pandemic. This has been the worst challenge for the airline industry in decades. Still, the stock looks like a promising hold for the long term. Unfortunately, the pandemic promises to be a lingering issue. Some investors may be worried about its ability to rebound in the near term. Investors who want alternatives should look to these TSX stocks that possess great long-term growth potential.

Why investors should forget Air Canada and focus on automation

In January, I’d discussed the best stocks for millennials to target right now. Automation is one of the key trends young investors should be keen to jump on. Fortunately, ATS Automation (TSX:ATA) offers exposure to the world of factory automation. This TSX stock has climbed 46% year over year as of late-morning trading on February 11. Its shares are up 26% in 2021 so far.

Unlike Air Canada, ATS Automation and automation-linked stocks have benefited from the pandemic. The company released its third-quarter fiscal 2021 results on February 3. Revenues rose 1% year over year to $369 million. Order Bookings increased 18% to $435 million. Moreover, the Order Backlog rose 5% to $985 million.

ATS Automation boasts an immaculate balance sheet and promising growth potential. It is expensive in this hot market, but young investors can feel good about stashing this for the long term.

This TSX stock is geared up for big growth

Kinaxis (TSX:KXS) is another TSX stock I’d snag over Air Canada today. Its shares erupted in 2020, proving to be one of the most explosive stocks in the face of the pandemic. However, the stock has started slowly this year. It is down nearly 1% in 2021. Investors can expect to see its fourth-quarter and full-year 2020 results later this month.

Canada has become a leader in supply chain and operations planning software on the back of Kinaxis. The company has attracted Ford, Unilever, Toyota Motors, and other top firms with its cutting-edge technology. Kinaxis is well positioned to post strong growth on the back of this fast-growing market.

Skip Air Canada and target this automobile parts manufacturer

The global vaccine rollout has hit hurdles in 2021, but it has still presented a light at the end of the tunnel for the pandemic. Still, Air Canada and its peers will be forced to battle turbulence until we achieve some semblance of normalcy. The Canadian political class appears lost in a fog during this crisis, so we can expect little clarity on that front.

Instead of hoping for a breakthrough for airliners, investors may want to turn to the automobile sector. Magna International (TSX:MG)(NYSE:MGA) is a top TSX stock and the largest auto parts manufacturer in North America.

Its shares have climbed 46% from the prior year as of late-morning trading on February 11. Moreover, Magna has bolstered its exposure to the burgeoning electric vehicle (EV) market. In late December, it announced a joint venture with LG Electronics to construct electric car components. This follows developments in 2018, which included two joint ventures with Chinese companies to engineer and build EVs.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends KINAXIS INC and Magna Int’l.

More on Investing

Paper Canadian currency of various denominations
Investing

The Best Stocks to Invest $2,000 in Right Now

Do you have some extra cash to spare? Here are three Canadian stocks to add to your watch list today.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Friday, November 22

Continued gains in gold, oil, and natural gas prices could give the commodity-focused TSX benchmark a boost at the opening…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

Hourglass and stock price chart
Stock Market

It’s Not Too Late: Invest in These TSX Growth Stocks Now

Solid fundamentals of these top TSX growth stocks could help them maintain strong upward momentum in the years to come.

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

stocks climbing green bull market
Stocks for Beginners

3 TSX Stocks Soaring Higher With No Signs of Slowing

Don't ignore stocks just because they look like they're at a high price. Instead, see exactly why they've driven so…

Read more »

dividends can compound over time
Bank Stocks

Is TD Bank Stock a Buy for Its 5.2% Dividend Yield?

TD Bank stock offers a rare 5.2% dividend yield—can it rebound from challenges and reward contrarian investors? Here's what to…

Read more »