LEV:CC - 2 Canadian Stocks That Are Simply Too Cheap to Ignore (But They Won't Be for Long)
2023-04-03 16:15:00 ET
Bargain hunters can choose from several stocks trading at deep discounts before the next bull market. Among the stocks on sale or whose prices are too cheap to ignore are Lion Electric Company ( TSX:LEV ) and Tamarack Valley Energy ( TSX:TVE ). Their businesses have long growth runways and could deliver superior returns.
The electric vehicle (EV) maker looks forward to cornering a significant share of a huge addressable market. Meanwhile, the payoff from the energy stock could be substantial when demand returns and oil prices rebound.
Growing footprint in the EV market
The Lion Electric Company designs, develops, manufactures, and distributes purpose-built, all-electric, medium- and heavy-duty urban vehicles. This $528.23 million firm gained in-house industry expertise after more than 12 years of all-electric vehicle R&D (research and development) by its Battery and R&D division.
Lion’s manufacturing facility near Montreal, Quebec, can produce around 2,500 vehicles at full scale. The purpose-built, all-electric trucks and buses have several range and configuration options to meet specific customer’s needs and align with their route planning.
Today, over 950 of these all-electric vehicles are on the road and in real-life operating conditions. The business thrives, as evidenced by the 174 delivered vehicles in the fourth quarter (Q4) of 2022 compared to 71 units in Q4 2021 (145% year-over-year increase).
In 2022, revenue soared 142.4% to US$139.9 million versus 2021. The net earnings reached US$17.77 million compared to the US$43.32 net loss in the previous year. Lion also delivered the first zero-emission school bus in December 2022, funded by the U.S. Environmental Protection Agency’s Clean School Bus Program.
Marc Bedard, Lion’s chief executive officer (CEO), said, “We are pleased with our 2022 performance, as once again, despite external challenges, we delivered a record number of electric vehicles.” For 2023, management will continue to manage liquidities and utilize the required capital and resources to accelerate production ramp-up.
Lion’s primary goal is to optimize its manufacturing footprint and drive long-term growth and profitability. The industrial stock trades at only $2.39 per share (-21.38% year to date), although market analysts see a 139.3% return potential in 12 months.
North America’s most profitable oil play soon
The energy sector is on pause right now due to the weakness in oil prices. However, a strong comeback is inevitable soon. At $3.95 per share, Tamarack Valley is down 10.95% year to date. However, this mid-cap stock has rewarded investors with an overall gain of 260.2% in the last two years.
Market analysts recommend a buy rating; their 12-month average price target is $7.37 (+66.4%). If you invest today, the $2.2 billion oil and gas exploration and production company will pay a 3.89% dividend. Due to the 170% year-over-year increase in adjusted funds flow (2022 versus 2021) to $727 million, Tamarack initiated a return of capital framework, including the inaugural monthly base dividend.
According to management, 2022 was a year of continued transformation and operational execution, as it repositions the business. The goal is to turn Tamarack into North America’s most profitable oil play.
Growth stocks
Lion Electric and Tamarack Valley are absurdly cheap right now. You can hold both growth stocks long-term and eventually realize an enormous windfall.
The post 2 Canadian Stocks That Are Simply Too Cheap to Ignore (But They Won’t Be for Long) appeared first on The Motley Fool Canada .
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
2023