2 Stocks I’d Buy Over Shopify in December 2023


Lady holding mobile phone and shopping bags

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TFSA investors must realize that it’s nearly impossible to get into the markets at the “perfect” time. Indeed, the pursuit of local bottoms may actually cause one to miss out on the market’s best up days. Additionally, those who missed the bottom may be inclined to chase a stock that has already had a sizeable upward move.

Indeed, it’s a bit discomforting to have to invest after the TSX Index rose nearly 8% in a month. Shopify (TSX:SHOP) stock is actually up more than 50% from its October bottom. Indeed, if you flinched as shares tumbled for the late-summer months, you may have missed out on the very sudden surge.

In any case, not all stocks have been red-hot. In fact, some may still be undervalued relative to their long-term fundamentals. And in this piece, we’ll have a quick look at two top plays that could surge in the face of a bull market rally.

Of course, it’s never a good idea to get too far ahead of your skis, assuming the bull will outmuscle the bear moving forward. That’s why keeping a bit of dry powder on the sidelines (for those inevitable and healthy corrections) is a smart idea.

Without further ado, let’s have a closer look at two stocks that I’d consider buying over Shopify as we head into the best time of the year!

Amazon

Amazon (NASDAQ:AMZN), Shopify’s bitter rival turned frenemy (thanks to the recent Buy with Prime partnership), seems to have a more enticing valuation at current levels. Like Shopify and the rest of tech, AMZN stock is starting to really heat up, with the stock up over 22% since its October lows. At new 52-week highs, I view Amazon as an intriguing way not only to play a recovery in retail sales and the cloud services business (AWS) but also generative artificial intelligence (AI).

Undoubtedly, Amazon has a treasure trove of data on a plethora of users, which is invaluable in the AI age. Additionally, the firm seems to be on the cutting edge of warehouse robotics. With the company recently launching free “AI Ready” courses, Canadians ought to consider nibbling into the name if they’re at all concerned their portfolio is light on AI upside.

OpenAI may be the one hot company in the AI scene right now. But it’d be unwise to think Amazon doesn’t have a chance to become one of the new top dogs over the next five years. Indeed, Shopify may have plenty of AI surprises for us all in the coming decade. But if you want a front-row seat to the AI race, I think you need to head south of the border with a mega-cap U.S. titan like Amazon.

Canadian Tire

Canadian Tire (TSX:CTC.A) is a brick-and-mortar retailer that’s really lost its lustre in recent months. The stock is fresh off a multi-year low after a few tough quarters. And as the firm trims its labour force, questions linger as to how the old-school retail giant will be able to keep up with rivals. Over the years, Canadian Tire has invested a great deal in its e-commerce presence.

With a robust loyalty program and wide presence across the country, Canadian Tire continues to be a compelling value gem for investors seeking a solid risk/reward. The 5.03% dividend yield and low 14.4 times trailing price-to-earnings multiple makes for a terrific contrarian play if you’re looking to maximize your value, rather than chase what’s hot right now.



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