The S&P/TSX Composite Index jumped nearly 26% over the past year, reflecting momentum in several Canadian stocks. While most TSX stocks have trended higher, shares of a few fundamentally strong companies still appear to be undervalued, offering a solid buying opportunity for long-term investors. If you’re considering an investment of $500, here are three no-brainer undervalued stocks to buy right now.
Table of Contents
goeasy Stock
Shares of financial services company goeasy (TSX) have gained over 78% in one year. Despite this notable gain, goeasy stock remains undervalued. The company, which provides lending services to subprime borrowers in Canada, has consistently increased its sales and earnings at a double-digit rate. Its earnings per share (EPS) has grown at a compound annual growth rate of over 28% over the last five years. Currently, goeasy trades at a next-12-month (NTM) price-to-earnings (P/E) ratio of just 9.8, indicating significant undervaluation. The company is well-positioned to benefit from its dominance in the subprime lending sector, with diverse product offerings and multiple funding sources expected to drive revenue growth.
WELL Health Stock
WELL Health Technologies (TSX) is a digital healthcare company trading at a low valuation. It has an NTM enterprise value-to-sales (EV/sales) multiple of 1.4, well below its historical average. Despite this, the company is experiencing rapid sales growth, with a 42% year-over-year increase reported in Q2 2024. WELL Health has achieved record revenues for 22 consecutive quarters and is on track to reach $1 billion in annual revenue by the end of 2024. Its focus on enhancing profitability and investing in AI capabilities positions it well for future growth.
Lightspeed Stock
Lightspeed (TSX) is another undervalued stock that investors should consider. This Canadian technology company provides digital payment and omnichannel commerce solutions and is set to benefit from the shift towards multi-channel selling platforms. Currently, Lightspeed trades at an NTM EV/Sales ratio of 1.6, significantly lower than its historical metric. The company is focused on expanding its customer base and improving margins, and despite recent pressures on consumer spending, its solid growth prospects make it a promising long-term investment.
Is Brookfield Asset Management Stock a Buy for its 3.2% Dividend Yield?
High Dividend Yields: A Smart Way to Boost Your Income
Down 20% This Stock Is Primed to Soar in 2025 and Beyond
A Tax-Free Savings Account (TFSA) Can Be Your Secret Side Hustle Without Ever Leaving the Couch!
Manulife (TSX) and CIBC (TSX) Are Up 65% and 60%, Respectively, in the Past 12 Months
Investing in these undervalued stocks could provide substantial returns as they capitalize on their growth potential while the broader market continues to rise.