Don't Miss AI's Third Wave
Investing in the stock market can be a rollercoaster, with markets climbing to new all-time highs one day and dipping by massive margins the next. A harsh economic environment caused by different factors can make the market even more volatile.
The ongoing trade tensions due to tariffs being implemented on both sides of the border between Canada and the U.S. might not paint a pretty picture. As a young investor, investing in growth stocks might not look like the ideal approach.
If you have a short investment horizon, it definitely isn’t the best time because there are plenty of ups and downs expected in the coming weeks. An investor with a long-term view will look at this situation as the perfect opportunity to invest in a high-quality growth stock on the dip.
Not every growth stock experiencing a decline in share prices is a good opportunity to buy on the dip. It is important to identify those that offer a realistic opportunity for significant long-term gains. Against this backdrop, there is one stock that lagged in 2024 and continues to do so this year. However, it might be a good long-term holding for multi-fold returns in the long run.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) is a $64.45 billion market capitalization convenience store operator. The company has a network of stores across North America, Scandinavia, the Baltics, Ireland, and even Russia. The company generates most of its income through quick service restaurants and the sale of groceries, fresh food, tobacco products, beverages, car wash services, marine fuels, road transport fuel, stationary energy, and other products and services.
The company also operates stores under the Circle K banner in several countries. You can consider Couche-Tard as a consolidator of convenience stores. Right now, it’s in the works to acquire 7-Eleven. This acquisition, if it comes through, will be a historic deal. There’s a good chance the deal won’t happen due to regulatory concerns. Even then, ATD stock might continue making cheaper acquisitions elsewhere and continue growing.
In terms of financial performance, ATD stock is still lagging. In the second quarter of fiscal 2025, the company reported $708.8 million in earnings, down from $819.2 million in the same quarter last year. Despite decreased earnings, the stock continues delivering consistent global revenue growth thanks to its growing network of fuel stations and convenience stores.
Foolish takeaway
As of this writing, Alimentation Couche-Tard stock trades for $67.99 per share, hovering very close to its 52-week low. Despite all the mergers and acquisitions activity it has been engaging in over the last decade, it has a sensible level of debt. Recent earnings might not have been as good as they can be, but the company still boasts a strong balance sheet.
Its solid presence in international markets will play a key role in the recovery whenever it might happen. That said, further downturns in share prices might be on the cards as the market volatility continues. It can be a good idea to allocate some of your investment capital to buying its shares, but it is wise not to put all your eggs in one basket if you’re seeking growth-focused investments.
