Trawling through the TSX index looking for stocks hitting their 52-week lows came up with the following three steals. Each of the three following stocks has something going for it, and in at least once case there’s a strong buy signal here. Let’s dive into the data and see which tasty stocks are lurking in the bargain basement at the moment.
Shaw Communications (TSX:SJR.B)
This Canadian coms stock has some dodgy data today — besides that 12-month low, that is: a one-year past earnings slowdown of 89.4% underperforms its own 21.7 five-year average past earnings contraction, while a PEG of 3.2 times growth is still too high. Indeed, there’s not a lot about Shaw Communications‘ data that looks super at the moment: its comparative debt level of 73% of net worth is a bit high, while a P/E of 220.5 times earnings and P/B of 2.3 times book do a good job of signalling overvaluation fairly definitively.
There’s good news for this favourite of the TSX index coms stock club, though: a dividend yield of 4.65% is quite handsome, while growth investors should love its 69.6% expected annual growth in earnings. Furthermore, those looking for intrinsic value should find its 3% discount to future cash flow value intriguing.
A one-year past earnings tumble of 54% puts this stock in largely the same situation as the previous one, though a five-year average past earnings slowdown of 5.6% paints an even less rosy picture. That said, a PEG of 0.3 times growth is good and low, while a debt level of 31.9% of net worth is acceptable.
Celestica is one of the best-valued growth stocks on the TSX index at the moment, thanks to a strong outlook and falling share price: value indicators such as a P/E of 23.5 times earnings, discount of more than 50% compared to the future cash flow value, and a P/B of 0.9 times book are good to see. It’s got an 84.3% expected annual growth in earnings ahead too, which is fine and dandy since this a dividend-free zone suited for capital gains investors.
Power Corporation of Canada (TSX:POW)
A one-year past earnings drop by 17.6% hasn’t turned the whole pot sour, with Power Corporation of Canada still enjoying a five-year average past earnings growth of 5.6%. Value isn’t a problem for this 12-month low-trading TSX index gem, with its share price discounted by 11% compared to its future cash flow value, and a PEG ratio showing a P/E equal to growth.
It’s got a tidy balance sheet with an acceptable debt level of 44.6% of net worth and currently pays a tasty dividend yield of 6.16%. While growth investors shouldn’t get too excited about Power Corporation of Canada’s expected annual growth in earnings, with the outlook calling for just 8.8%, it’s a steal today, with undervaluation confirmed by a P/E of 9.1 times earnings, and P/B of 0.8 times book.
The bottom line
Power Corporation of Canada is one of the healthiest bargains on the TSX index right now, and as such is a strong buy. The other two stocks are left to duke it out, with Celestica being the clear winner in terms of growth and undervaluation – just right for a mid- to long-term capital gains investor on the lookout for upside.
