LSPD:CC - 3 Top Canadian Value Stocks in November 2023
2023-11-24 16:50:00 ET
The Canadian equities are witnessing healthy buying this month amid signs of easing inflationary pressure and a pause by the Central banks on interest rate hikes. The Canadian benchmark index, the S&P/TSX Composite Index , is up 6.6% this month. Despite the recent increases, a few companies are still trading at a discount compared to their 52-week highs, while their valuations also look attractive.
Meanwhile, here are three such value stocks that you can buy now to earn superior returns.
WELL Health Technologies
WELL Health Technologies ( TSX:WELL ) reported an impressive third-quarter performance last week, with its revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to its shareholders growing by 40.2% and 13.2%, respectively. During the quarter, the company had 1.03 million patient visits and 1.58 million patient interactions.
Meanwhile, the company continues to develop and launch innovative products and make strategic acquisitions to drive growth. Last month, it introduced WELL AI Decision Support, which aids healthcare professionals in the early diagnosis of diseases. It also acquired Proack Security, which could enhance its capabilities in safeguarding sensitive information while providing robust security across healthcare and corporate networks.? With these growth initiatives and its continued solid underlying business, WELL Health projects its 2024 revenue to exceed $900 million.
Despite its continued solid performances and healthy growth, the company trades at a healthy NTM (next 12-month) price-to-earnings multiple of 13.7, making it an attractive buy.
Lightspeed Commerce
Second on my list is Lightspeed Commerce ( TSX:LSPD ), which also reported a solid second-quarter performance for fiscal 2024 this month. Its revenue grew 25% to $230.3 million, higher than its earlier guidance of $210-$215 million. The company’s customer base shifted towards higher GTV (gross transaction volume), supporting its financial growth. Its ARPU (average revenue per user) also rose 26% to $425.
Amid the top-line growth, the company posted a positive adjusted EBITDA for the first time. Its adjusted EBITDA came in at $0.2 million compared to an adjusted loss of $8.5 million in the previous year’s quarter. With its cash and cash equivalents at $761.5 million, it is well positioned to support its growth initiatives. Further, the company’s management is hopeful that its 2024 revenue could come between $890 million and $905 million. The midpoint of the guidance represents a 23% increase from the previous year. Besides, the company hopes to break even or deliver better adjusted EBITDA for the fiscal year.
Meanwhile, Lightspeed still trades at over 85% discount compared to its 2021 highs. Besides, its NTM price-to-sales and price-to-book multiples are at 2.5 and 1, respectively. Given its growing financials and cheaper valuation, I am bullish on Lightspeed.
Savaria
Another value stock I am bullish on would be Savaria ( TSX:SIS ), which offers accessibility solutions to physically challenged people. Earlier this month, it reported a healthy third-quarter performance, with its revenue growing by 4.3% amid organic growth of 4.1% and favourable currency translation. Meanwhile, the divestiture of the Norway operations offset some of the growth. Meanwhile, its gross margin improved by 2.7% to 34.5%, while its operating margins increased from 8.7% to 9.8%.
Amid top-line growth and expansion of its operating margins, the company’s adjusted net income grew 7.8% to $12.05 million. The company also generated an adjusted EBITDA of $33.6 million, representing an 8.3% increase from the previous year’s quarter.
Given its high backlog levels, cross-selling initiatives, and strong demand, the company’s management hopes to maintain organic growth across its accessibility and patient care segments. So, the management expects its revenue to grow 8-10% this fiscal year while its adjusted EBITDA margin would come at a healthy 16%. Further, Savaria’s management remains confident of achieving revenue of $1 billion in 2025. Meanwhile, the company’s NTM price-to-sales multiple stands at 1.1, making it an attractive buy. It also pays a monthly dividend of $0.0433/share, with its forward yield at 3.62%.
The post 3 Top Canadian Value Stocks in November 2023 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. The Motley Fool has a disclosure policy .
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