A souring economic climate is making it hard to identify worthwhile stocks to invest in.
This is because we currently find ourselves in a stock picker’s market, where there is little in the way of sustainable value among throngs of companies ill-equipped to pursue their objectives due to high inflation, declining consumer sentiment against increased living expenses, and ensuing fears of an interest-rate-induced economic slowdown.
It takes a special kind of company to be prepared to operate under bullish environments, like the post-pandemic reopening boom, when the world at large put savings and government stimulus to work, as well as bearish environments, where that initial spending momentum resulted in overheating economies, unsustainable growth, and an increased probability of a prolonged contraction.
Essential traits among these potential stocks to invest in include:
- Products and services with clear value propositions aligned with solving lingering industry problems
- Involvement in a market segment forecasting long-term growth, such as automation, electric vehicles and critical metals
- Profitability or a clear trend in that direction
- Access to sufficient capital to increase industry footprint and internal development efforts
The recipe delineated by these traits enables a company to operate without having to worry about macro events, knowing that any share price declines are likely temporary as they eventually revert back to a fair reflection of intrinsic value.
While the Bank of Canada’s next interest rate decision on Wednesday, June 7, will speak volumes about the country’s near-term economic future – our GDP rose 3.1 per cent in Q1, with 4.4 per cent inflation beating expectations in April, opening the door for another rate hike – companies that match our parameters are there for the taking, waiting for the right due diligence process to hone in on their attractive prospects.
TMH readers, ever on the ball, poured over three stories from the past week tied to companies that fit our thesis to a T and are well worth a further investigation:
DM EVS (TSXV:DM) announces five-year deal with the Holiday Inn Vancouver
Datametrex subsidiary Datametrex Electric Vehicle Solutions, an electric vehicle charging station company, has signed a five-year partnership with the Holiday Inn Vancouver Centre.
DM EVS will be the exclusive provider of EV chargers and services for Holiday Inn’s Vancouver West Broadway establishment, with potential to expand to other branches.
The subsidiary is entitled to 100 per cent of the revenue generated from charging operations and carbon credits.
CEO Marshall Gunter spoke with Coreena Robertson about the news.
The deal follows a profit-enhancing collaboration with Rewatt Power.
Datametrex (TSXV:DM) is up by 14.29 per cent year to date.
FPX Nickel announces $16 million strategic equity investment from major global stainless steel producer Outokumpu
FPX Nickel views the funding as a testament to its Baptiste Nickel Project’s potential to produce premium nickel that bypasses the intermediate smelting stage, resulting in a low-carbon feedstock for multiple consumer and industrial markets, including stainless steel.
Proceeds will go primarily toward development activities at the project, including a preliminary feasibility study, ongoing environmental baseline activities, as well as feasibility study readiness activities.
Producer Outokumpu now owns approximately 9.9 per cent of FPX’s issued and outstanding common shares on a non-diluted basis.
President and CEO Martin Turenne spoke with Shoran Devi about the news.
FPX Nickel (TSXV:FPX) is up by 15.91 per cent year to date.
Hank Payments (TSXV:HANK) announces financial results for the third quarter
Hank Payments, a cash flow and budgeting automation company, reported a 14-per-cent YoY increase in monthly recurring revenue per user from $5.22 to $5.93 in Q3.
The company’s gross margin sits at a stellar 89 per cent, while reductions in operating expenses led to its lowest quarterly adjusted loss at $318,779.
The company expects to see revenue from its education channel by the end of calendar Q2, with further licensing revenue in Q4.
CEO Mike Hilmer spoke with Shoran Devi about the news.
Hank Payments (TSXV:HANK) is up by 150 per cent year to date.
While all three of this week’s picks may do wonders for your portfolio, it’s important to remember that small and microcap businesses make for risky stocks to invest in. Make sure your investments are aligned with your financial goals, financial knowledge, risk tolerance and investment time horizon.
This is sponsored content issued on behalf of Datametrex, FPX Nickel and Hank Payments, please see full disclaimer here.