LSPD:CC - 3 Bargains I'd Snatch Up as They Approach 52-Week Lows
2024-05-15 20:45:00 ET
Canadian equity markets have bounced back strongly this month, with the S&P/TSX Composite Index rising by 2.44%. The easing of tensions in the Middle East and the Federal Reserve’s indication of no further rate hikes despite a lack of progress in inflation have increased investors’ confidence, driving the equity markets.
Despite the recovery in the broader equity market, a few TSX stocks are still trading close to their 52-week lows. Notably, the following three bargain stocks offer attractive buying opportunities for long-term investors despite their near-term volatility.
Lightspeed Commerce
First on my list would be Lightspeed Commerce ( TSX:LSPD ), which offers omnichannel selling solutions to small- and medium-scale businesses. The company has been under pressure over the last few months amid an uncertain broader economic outlook and management’s cautious outlook. It has lost 40% of its stock value compared to its 52-week high and trades just 2% higher than its 52-week lows. Amid the steep correction, its valuation has declined to attractive levels, with its NTM (next 12 months) price-to-sales multiple at 1.9.
Lightspeed has launched several products that provide data-driven insights, which could aid its customers in scaling their businesses and improving their customer experiences. Besides, its Unified Payments initiative has increased its Payment platform adoption, with its GPV (gross payment value) as a percentage of its GTV (gross transaction value) expanding to 29%. Further, the company’s management has taken reorganization and cost-reduction initiatives, such as trimming its workforce and integrating its recent acquisitions into two flagship products. These initiatives could improve operating efficiency and drive profitability in the coming quarters. Considering all these factors, I believe Lightspeed would be an excellent buy at these levels.
WELL Health Technologies
Another bargain stock I am bullish on is WELL Health Technologies ( TSX:WELL ). The tech-enabled healthcare company offers products and services to healthcare professionals for positive patient outcomes. The growing adoption of telehealthcare services and digitization of clinical procedures have created multi-year growth potential for the company. Besides, the company is investing substantially in artificial intelligence (AI)-powered products and services to enhance healthcare professionals’ productivity and efficiency.
Further, WELL Health has expanded its footprint by acquiring 10 primary care medical clinics from Shoppers Drug Mart last month. It has also signed a five-year collaborative agreement with Microsoft , which would integrate Microsoft Azure and its digital health platform to improve clinical outcomes and optimize expenses. The company continues to optimize its operations for organic growth and drive profitability for the rest of this year. WELL trades at an over 30% discount from its 52-week high while its NTM price-to-sales multiple has declined to 0.9, making it an attractive buy.
Telus
My final pick would be Telus ( TSX:T ), which has lost substantial value over the last two years. Higher interest rates and unfavourable regulatory decisions have weighed on the telecom sector, including Telus. T stock is down over 35% compared to its 2022 highs and is trading just 6% higher than its 52-week lows. Amid the steep sell-off, the company trades at 1.6 times analysts’ projected sales for the next four quarters.
Despite the near-term weakness, I believe Telus would be an astute buy at these levels due to the growing demand for telecommunication services amid digitization and growth in remote working and learning. Meanwhile, the company is expanding its 5G and broadband infrastructure to drive growth. As of March 31, its 5G network covered 86% of the country’s population, while fibre-optic cable connected 3.2 million households and businesses. Besides, the company is also scaling its other growth segments, TELUS Health and TELUS Agriculture & Consumer Goods, which could boost its financials in the coming years.
Further, Telus’s management has raised its quarterly dividend by 7% to $0.3891/share, the 26 th increase since May 2011. T’s forward dividend yield stands at an attractive 6.7%. Considering all these factors, I am bullish on Telus.
The post 3 Bargains I’d Snatch Up as They Approach 52-Week Lows appeared first on The Motley Fool Canada .
Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Lightspeed Commerce, Microsoft, and TELUS. The Motley Fool has a disclosure policy .
2024