LEV:CC - 2 TSX Stocks Near Their Lows That I'd Buy Right Now
2024-07-05 16:10:00 ET
There are plenty of ways you can get solid returns on your investment in the stock market. From investing in high-growth stocks that deliver quick capital gains to high-quality, blue-chip stocks that offer slow and steady growth with long-term capital gains and dividends, there are plenty of opportunities to suit your investing style.
Another excellent way to get good returns is by investing in undervalued stocks and watching your wealth grow as the underlying companies recover and share prices reach reasonable valuations.
Undervalued stocks are publicly traded equity securities trading for lower than intrinsic values. Unfortunately, many new investors confuse stocks that have seen share prices decline significantly as undervalued. Undervalued stocks are challenging to identify but easy to choose from.
In most cases, you can see whether a stock is undervalued by looking at the company’s fundamentals to determine whether they are attractively priced enough to buy. Sometimes, share price declines happen due to other factors that justify them.
The trick is to look for the reasons share prices declined and how they affect its potential to recover, its long-term growth, or fundamentals. Here are two such undervalued stocks near all-time lows that I’d consider buying right now.
Telus International
Telus International ( TSX:TIXT ) is a $2.19 billion market capitalization Canadian tech company headquartered in Vancouver. Not to be confused with Telus , the telco, which is its parent company, Telus International focuses on digital customer experiences.
It designs and delivers next-gen customer experience solutions to companies across several verticals, from e-commerce to healthcare, FinTech, and more.
TIXT stock went public in February 2021 and saw share prices rise by around 20% to hit its peak in October 2021. Since then, TIXT stock has fallen from grace. As of this writing, TIXT stock trades for $7.85 per share, down by 83.87% since October 2021 and just above its all-time low.
The company is not at a low due to finances being its core problem. However, some institutional investors pulled out of their positions in the stock, contributing to its decline.
It is backed by one of the biggest telcos in Canada, and its focus on artificial intelligence can set it up for a solid recovery in the coming years.
Lion Electric
Lion Electric ( TSX:LEV ) is a $233.71 million market capitalization firm that manufactures electric vehicles (EVs). Typically, hearing about EVs automatically makes people think of Elon Musk’s Tesla . However, that is a stock too expensive for the taste of many investors. Canadian EV manufacturers might not offer the same rapid growth potential, but they are worth considering.
Lion Electric does not bother competing with Tesla. Instead, it focuses on manufacturing urban vehicles. While most EV stocks saw tremendous growth recently, LEV stock is far behind. As of this writing, it trades for $1.24 per share, down by 94.97% from its all-time high in July 2021. Several reasons caused its decline, including weak financials.
However, the market for EV companies focusing on mass transit, like LEV stock, is largely untapped in the U.S. and Canada right now. As the global shift to EVs increases, Lion Electric could see substantial growth in the coming years.
Foolish takeaway
Trading at heavily discounted share prices, these two TSX stocks look too attractively priced to ignore if you want to buy undervalued stocks. However, it is important to remember that investing in these stocks carries a degree of risk for your investment capital. The factors that can lead to a recovery are difficult to predict.
In some cases, it can take years for conditions to become favourable for recovery. There is even a chance that share prices might slip further down before they recover. However, investors can enjoy solid returns through capital gains whenever a recovery happens.
The post 2 TSX Stocks Near Their Lows That I’d Buy Right Now appeared first on The Motley Fool Canada .
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Telus International. The Motley Fool has a disclosure policy .
2024