ATZ:CC - 2 Bargain Stocks You Can Buy Today and Hold Forever
2023-09-19 16:00:00 ET
As the economy continues to face significant headwinds and policymakers continue to try and cool inflation without causing a significant recession, many high-quality stocks have become ultra-cheap. And while stocks across the board have fallen in value over the last year and a half, the best stocks you can buy today are high-potential growth stocks that are trading well off their highs.
With interest rates increasing significantly and many expecting a recession to materialize, many growth stocks have been some of the hardest-hit investments, especially smaller growth stocks that still have years or even decades of growth potential ahead of them.
So if you’re looking for stocks that you can buy at a massive bargain today, here are two impressive businesses that you can buy now and potentially hold forever.
One of the best stocks to buy at a significant bargain today
Many tech stocks have become cheap in this environment, but considering WELL Health Technologies ( TSX:WELL ) serves the highly defensive healthcare sector, and is still ultra-cheap, it’s one of the best stocks you can buy today.
WELL was an ultra-popular stock during the initial stages of the pandemic. At the time, it was seeing significant interest from investors as a healthcare tech stock because of the nature of the pandemic and all the shutdowns.
At the same time, though, WELL was also growing its revenue rapidly. And while that revenue growth has slowed down, its pace is still impressive and now leading to a rapid increase in profitability.
From 2019 up until the end of 2022, WELL’s revenue increased from just $32 million to more than $569 million. And now, with its revenue expected to jump another 32% this year, analysts estimate that WELL’s normalized earnings per share (EPS) will grow by 12.5% this year and another 28.5% next year.
Therefore, with the stock still trading around $4.30 a share, it’s a major bargain. Not only does it trade at just 1.3 times its expected sales over the next twelve months, below its three-year average of 4.3 times, but it also trades at a forward price-to-earnings ratio of just 13.4 times, which is ultra-cheap for a high-potential small-cap growth stock with a market cap of just $1 billion.
So while WELL trades at such a significant bargain, it’s certainly one of the best Canadian stocks you can buy today.
A top retailer with years of growth potential
In addition to WELL, Aritzia ( TSX:ATZ ) is another high-quality stock to buy today that not only offers years of significant growth potential but also trades at a massive bargain.
The main difference between the two is that Aritzia is not nearly as defensive, especially considering it sells discretionary goods as a women’s fashion retailer.
With that being said, though, while it has seen some impact on business as a result of the economic environment, these impacts should only be temporary.
Furthermore, although its profitability is being impacted at the moment, it continues to remain profitable, showing investors what a high-quality and reliable stock it is.
In fact, for its fiscal 2024, which ends at the end of February 2024, analysts estimate that its normalized EPS will fall by 50%, even though Aritzia is still expected to grow sales in fiscal 2024 by 4%.
By 2025, though, analysts estimate that its normalized EPS can fully recover and grow by 100% back to $1.86, what Aritzia earned in fiscal 2023.
Therefore, while Aritzia is only being temporarily impacted, investors have a major opportunity to buy the stock at a huge bargain.
Today it trades at just 21.1 times its forward earnings, below its three-year average of 29.6 times. Furthermore, it trades at just 12.2 times its expected earnings in fiscal 2025, when analysts anticipate its operations will have recovered.
So while you can buy this impressive growth stock at such a massive discount, it’s certainly one of the best Canadian stocks to buy today.
The post 2 Bargain Stocks You Can Buy Today and Hold Forever appeared first on The Motley Fool Canada .
Fool contributor Daniel Da Costa has positions in Aritzia and Well Health Technologies. The Motley Fool has positions in and recommends Aritzia. The Motley Fool has a disclosure policy .
2023