With bear markets come great deals, and there are many stocks on the TSX right now that are good value buys. Value investors typically look for stocks that have good fundamentals and that are reasonably priced. While popular tech stocks might have great fundamentals as well, their valuations are normally sky high, and it means investors have to pay a big premium to own the stocks, which could limit long-term returns.
For a stock to be appealing to value investors, it needs to be trading at a reasonable multiple of earnings and book value as well as having strong financials. The world’s most successful investor, Warren Buffett, is a value investor at heart, and it’s no wonder why many try to follow his investing strategy.
Below are three stocks that would be great addition to any value investor’s portfolio.
Laurentian Bank of Canada (TSX:LB) may not be one of the Big Five banks Canada, but that doesn’t mean it won’t benefit from a rising interest rate environment. In the company’s most recent quarter, net revenues were up over 12%, while profits grew by 25% from last year. The bank stock has had no trouble turning a profit and growing its top line, and that makes it a very stable and appealing long-term buy.
Despite its strong fundamentals and decent quarterly performance, Laurentian’s stock has declined more than 14% in just the past three months. The share price is near its 52-week low, and it could be an opportune time to buy. The stock is trading below book value and at a price-to-earnings ratio (P/E) of less than nine, it so meets all the tick marks for a value investor.
In addition, you’ll also secure a great yield, as the stock currently pays investors a dividend rate of over 5.2%.
Power Corporation of Canada (TSX:POW) has also struggled this year, as the financial services stock is down more than 10% to start 2018. It too is near its 52-week low after the stock’s recent fourth-quarter results disappointed investors. With an earnings per share of $0.44 this past quarter, profits are well down from the $0.98 that the company recorded this time last year, despite total revenues being up.
The stock is also trading below book value and at a P/E ratio of just over 10, so it’s not a bad value buy either. While the company may have had a disappointing quarter, for the full year it still continued to show growth in both its top and bottom lines.
Its 5% yield is also an attractive option for dividend investors looking to add to their recurring income.
Corus Entertainment Inc. (TSX:CJR.B) continues to fall in price, and it’s getting harder to ignore what a great bargain this stock is becoming. While it’s tempting to think that this stock is a goner, there are still plenty of reasons to buy it. To say that share price has been a disaster this year would be a massive understatement: in just three months, the stock has dropped more than 40% in value.
While its yield of 16% might be astronomical, the company still has good fundamentals, and the stock could have tremendous upside from its current price point.