It’s a fine time to go bargain hunting.
After several weeks of losses, the TSX is trading at its lowest level since March, and cheap stocks are ripe for the picking. Although this past week saw a few good days, prices remain low–despite strong quarterly reports from many top TSX component companies.
When you’ve got a situation in which prices are low despite strong fundamentals, it’s time to buy.
With that in mind, here are three solid TFSA stocks trading near 52-week lows.
Husky Energy Inc
Husky Energy Inc (TSX:HSE) is a diversified oil & gas company that operates in Canada, the U.S. and Asia. The company owns a number of valuable oil leases, including oilfields in the Fort McMurray region and offshore oil deposits in the Atlantic. As an integrated energy company, it has operations in exploration, extraction and refining.
As it extracts oil in a number of geographic regions, Husky has strong diversification among different grades of crude. Trading at $12.55 as of this writing, it’s at one of the cheapest prices it has seen in the past 12 months.
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Kinder Morgan Canada Ltd
Kinder Morgan Canada Ltd (TSX:KML) is an energy pipeline and storage company best known for selling the Trans Mountain Pipeline to the Government of Canada for $4.5 billion. Pipeline companies earn money from toll fees rather than from selling oil directly, so their earnings are less tied to the price of crude than other energy companies are.
This provides considerable protection in a volatile oil market such as the one we find ourselves in now. Excluding an extreme and short-lived price drop in early January, the stock is trading near its 52 week lows, and also pays a generous dividend that yields a sumptuous 5.5%.
Canadian Tire Corp Ltd
Canadian Tire Corp Ltd (TSX:CTC.A) is a company that needs no introduction. As one of Canada’s largest auto parts stores, it has a highly diversified business that includes clothing stores and gas stations. In its most recent quarter, the company grew same-store sales by 6.1%, which breaks down to 7.1% growth in the flagship store, 4.9% growth at Marks and 3.4% at SportChek.
Same-store sales is a retail growth metric that shows how much a store can increase sales without opening new locations. These numbers are extremely solid, demonstrating that Canadian Tire can power revenue growth into the future even with its flagship chain being pretty ubiquitous nationwide.
In less fortunate news, the company’s diluted EPS fell by 4.8% in the same quarter, driven mainly by an increase in operating capital expenditures. This weak earnings growth is the most likely reason why CTC stock is falling, but it was in fact driven by an increase in expenses, suggesting that it’s manageable. Going purely by revenue, Canadian Tire grew at 2.3% year over year in Q1.
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 Andrew Button has no position in any of the stocks mentioned.