Fire Sale! 3 Stocks to Buy Today

Great Canadian Gaming Corp. (TSX:GC) and others have dropped into discounted territory in May.

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

The S&P/TSX Composite Index suffered another triple-digit loss on May 13. Heightened trade tensions between the United States and China have weighed on global markets this month. China is prepared to retaliate with its own batch of tariffs on June 1, which will likely escalate worldwide anxiety.

In the midst of this chaos, there is opportunity for investors. Today, we are going to look at three stocks that have fallen sharply in May. Each is worth adding on the cheap.

Great Canadian Gaming (TSX:GC)

Great Canadian Gaming is a British Columbia-based company that operates gaming, entertainment, and hospitality businesses in Canada and the United States. Shares have plunged 15.6% month over month as of close on May 13. The stock is down 13% in 2019 so far.

The company released its first-quarter results for 2019 on May 6. Revenues jumped 35% year over year to $312.1 million, but total net earnings fell 8% to $41.8 million. Recent anti-money laundering rules have worked to curb high-stakes play, which has eaten into Great Canadian Gaming’s profit. This ongoing crackdown has hurt casinos in British Columbia, and it is difficult to predict when it will see a drawdown.

The crackdown aside, the company’s GTA properties make it an enticing play going forward. It boasts solid financial flexibility after its Q4 2018 corporate refinancing. Construction is underway at several GTA and West GTA gaming facilities. Shares had an RSI of 18 as of close on May 13, which puts Great Canadian Gaming stock well into technically oversold territory.

Magna International (TSX:MG)(NYSE:MGA)

Magna International is the largest automobile parts manufacturer in North America. Shares of Magna have plunged 15.3% over the past month. The stock is down 1.4% in 2019 so far.

Declining demand for automobiles spurred a downward adjustment in Magna’s guidance in its first-quarter report. Earlier this month, I’d discussed the state of the automobile industry in Canada and weakening sales that have continued over 14 months. Softening global demand is a risk to Magna going forward.

Magna hopes to make inroads as it moves to incorporate advanced driving and automated technologies. However, this push has resulted in higher costs. Magna still boasts a strong cash position, but investors should expect a pullback in its overall results compared to a record 2018.

Magna stock had an RSI of 20 as of close on May 13. This post-earnings dip has put the stock into technically oversold territory in mid-May. Magna is facing a challenging environment in its industry, but its stellar production and strong cash flow make it a worthy target for investors.

Toromont Industries (TSX:TIH)

Toromont Industries is an Ontario-based industrial company that operates through its Equipment Group and CIMCO segments. The stock has dropped 12.8% over the past month. Shares are still up 5.5% from the prior year.

Toromont has suffered a sharp drop following the release of its first-quarter 2019 results. Total industry activity softened compared to the prior year, but Toromont still reported a 3% increase in revenues to $700 million. Construction orders increased in its Equipment Group segment, but mining and power systems orders dropped 21% from the prior year.

The company boasts a strong financial position. Leverage as represented by the net debt to total capitalization was 26% at the end March 2019. Toromont announced a quarterly dividend of $0.27 per share in Q1 2019, which represents a 1.8% yield. The company has achieved dividend growth for 29 consecutive years.

Toromont stock had an RSI of 16 as of close on May 13, which puts it deep into technically oversold territory. This is an attractive dividend-growth stock to add at a discount.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. Magna is a recommendation of Stock Advisor Canada.

More on Investing

A stock price graph showing growth over time
Dividend Stocks

2 Safe TSX Stocks to Add to Your TFSA Amid Rising Volatility

Given their stable underlying businesses and healthy growth prospects, I'm bullish on these two low-volatility TSX stocks.

Read more »

A golden egg in a nest
Dividend Stocks

How to Turn $5 Into $50,000 for Retirement

Can you invest in your retirement goals even in this volatile market? The answer is yes, and an investment amount…

Read more »

Glass piggy bank
Dividend Stocks

Compound Interest: 3 Dividend Stocks That Can Make You Rich

If you're looking to maximize the incredible powers of compound interest while investing for the long haul, here are three…

Read more »

Dice engraved with the words buy and sell

3 TSX Stocks I Will “Never” Sell

The Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is one Canadian stock I will never sell.

Read more »

Clean energy
Energy Stocks

TSX From Windfall to Free Fall: Where is the Value?  

The TSX Composite Index is in a free fall after windfall gains from tech and energy stocks. Where to look…

Read more »

Dividend Stocks

TFSA Wealth: How Top Dividend Stocks Can Turn $10,000 Into $185,000

Here's how owning top TSX dividend stocks can help you build TFSA retirement wealth.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern
Dividend Stocks

Passive Income Seekers: Buy These 6%+ Dividend Stocks Before It’s Too Late!

These three dividend stocks all offer passive income above 6.5%! But don't plan on these valuable rates lasting long.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

3 Ways to Make Money From Suncor Energy (TSX:SU) Stock 

Suncor Energy (TSX:SU)(NYSE:SU) stock attracted investors seeking exposure to the oil price. Here's how to make money from it.

Read more »