As the stock market continues to rally to new heights in 2024, investors are finding it increasingly difficult to identify fundamentally strong stocks that haven't already surged. With many stocks reaching new highs, it's essential to focus on companies with solid fundamentals and promising growth prospects, irrespective of their recent stock price movements.
In this article, I'll highlight two Canadian stocks that I'm loading up on in 2024. Interestingly, one of these stocks has seen solid gains in recent months while the other has been largely overlooked by the broader market, making it an attractive stock to buy on the dip for long-term investors.
Aritzia stock
The first top Canadian stock I recently bought is Aritzia (TSX:ATZ). This Vancouver-headquartered apparel designer and retailer has been on my watchlist for some time now. But the recent rally in its share prices, which was mainly fueled by its ability to continue delivering revenue growth even amid a difficult economic environment, has made it a more compelling buy.
After witnessing 47% value erosion in the previous couple of years, ATZ stock staged a handsome recovery in 2024. The stock currently trades at $45.29 per share with a market cap of $5.1 billion with nearly 65% year-to-date gains.
In its fiscal year 2024 (ended in February 2023), Aritzia's total revenue rose 6.2% YoY (year over year) to $2.3 billion. However, negative factors such as inflationary pressures and weak consumer spending drove its adjusted annual earnings down by 50.5% YoY to $0.92 per share. On the positive side, the company's financial growth trend showed signs of improvement in the latest quarter ended in May 2024. Its revenue during the quarter rose 7.8% YoY to $498.6 million due mainly to a 13% increase in its sales in the United States. Its adjusted quarterly earnings also jumped by 120% from a year ago to $0.22 per share.
Despite a challenging consumer environment, Aritzia's consistent focus on aggressive real estate expansion and increasing brand visibility, especially in the United States, brightens its long-term growth outlook, making it one of the most attractive growth stocks in my portfolio.
BlackBerry stock
Unlike Aritzia, BlackBerry (TSX:BB) hasn't seen much appreciation of late. In fact, the share prices of this Waterloo-based cybersecurity and IoT (Internet of Things) company have tanked by 34% so far in 2024 to currently trade at $3.10 per share with a market cap of $1.8 billion. With this, this tech stock has underperformed the broader market by a wide margin as the TSX Composite currently trades with solid 9.7% year-to-date gains.
Although a global economic slowdown has affected the demand for BlackBerry's cybersecurity solutions of late, its IoT segment revenues continue to rise. In the quarter that ended in May, its IoT sales climbed by 18% YoY to $53 million, mainly due to the strong demand for its QNX software.
As BlackBerry continues to work on advanced technological solutions for the automotive industry, the long-term growth outlook for its IoT segment looks promising. Additionally, I expect demand for its reliable enterprise cybersecurity solutions to rebound as global economic conditions improve, which could lead to a sharp rally in its share prices.