3 TSX Stocks That Could See a Sudden Surge in 2021

Predicting the stock market movement (as a whole) is difficult, but if you go deeper, it might be possible to find stocks that can be explosive shortly.

Adam Othman ❯

Adam is a value investor who is always on the hunt for fantastic undervalued companies that he can share with Motley Fool readers. He follows Warren Buffett and Charlie Munger's investment advice and has completed the Canadian Securities Course. When he's not investing, Adam can usually be found traveling or skiing.

Published February 13, 2021 10:15 am EST

2020 was a year of both substantial loss and tremendous growth for investors. Many investors saw their portfolios take significant dips, while others who bought robust recovery stocks when trading at rock-bottom prices saw years’ worth of growth in mere months. But we’ve entered 2021. It promises more stability, which is a stark contrast to 2020 volatility.

But that doesn’t mean that there are no more stocks that might see robust growth in 2021. Here are a few stocks that I think might see a sudden surge in 2021.

An energy stock

Energy is not seeing the recovery akin to the growth spurt tech saw after the crash, but it is recovering. The demand is rising up, and the surplus is being depleted at a controlled rate. The chances are that energy stocks like TC Energy (TSX:TRP)(NYSE:TRP) might see the share price climbing. TC Energy’s share price is still trading at a 28% discount, and it’s attractive from a valuation perspective as well.

Even if you find the company’s capital growth potential a bit uncertain, it’s still a great buy for its dividends. As a Dividend Aristocrat, TC Energy has grown its dividends for over two decades, and it’s currently offering a juicy 5.8% yield.

An investment company

Genworth MI Canada, which has officially changed its name to Sagen MI Canada (TSX:MIC), is a well-known name in the insurance industry. It’s not among the most powerful insurers in the country, nor is it the largest, and it has a market capitalization of $3.6 billion. The company is being purchased by Brookfield Business Partners, and since the announcement, the valuation has been steadily static.

The stock can go either way now, and multiple factors can influence the spike or a dip. The company posted strong fourth-quarter results and has already announced its quarterly dividends. The payout ratio is stable at 42.77%, and its 4.9% yield is also an attractive factor to take into account.

A tech company

Bitcoin is all the rage now, but its underlying technology — i.e., Blockchain — typically doesn’t get the limelight. Still, Dmg Blockchain Solutions (TSXV:DMGI) surged a whopping 2,150% in the last couple of months of 2020. While it’s down from its previous year’s peak, the stock might have what it takes to reach those heights again or even go beyond.

Crypto is still relevant, and as the owner of one of Canada’s largest crypto mining facilities, this blockchain company might ride the wave as well. Its portfolio of products and business under its umbrella extend beyond cryptocurrencies, making it stable, even if the speculative crypto market settles down.

Foolish takeaway

2021 has yet to unfold fully. It can a year of stable and robust economic recovery or a lot of fluctuations, as the government starts pulling the plug on incentives that (in a way) sustained the economy during the height of the pandemic. The stock market might see the stable recovery continue or a stagnation period, making it difficult for investors to find winning stocks.