Trying to time the markets can be a waste of time. However, buying stocks that are trading at lows can be a great way to position yourself for stronger possible returns in the future. Below are three stocks that have been underperforming lately that could prove to be great deals for investors that buy today.
Canadian Tire (TSX:CTC.A) has been struggling over the past 12 months, losing more than 20% of its value during that time. From a high of more than $183 per share back in August of 2018, the stock has proceeded to fall to below $134 since then. It’s still currently very close to its 52-week low, coming off a disappointing quarter recently that saw minimal sales growth and a weaker bottom line as well.
However, with the peak season for home repair and maintenance coming up, we could see better numbers ahead with the economy still looking very strong today. The fundamentals of Canadian Tire remain intact, and it could be a very attractive time to buy this stock, which currently trades at a little over two times its book value and 13 times earnings.
Not only do investors get a great opportunity to benefit from possible capital appreciation, but they can lock in the company’s growing dividend yield, which currently sits around 3% per year.
Baytex Energy (TSX:BTE)(NYSE:BTE) has been on a nasty fall over the past month, losing more than 27% of its share price during a short period of time. What makes the stock a bit intriguing is that the sell-off has incurred during a time when Baytex has not released anything significant, making the sharp decline in price a bit of a mystery.
In fact, the company was actually coming off a strong quarter that saw it post a profit for just the second time in the past five reporting periods. Sales were also up 58% year over year. With strong numbers, the stock should have been poised to rise, and instead, entering trading on Monday, it was just $0.08 away from its 52-week low.
The stock has been heavily discounted in the past, and at a price-to-book ratio of just 0.4, it’s become an even better deal today.
Seven Generations Energy (TSX:VII) is another stock that’s trading at just a fraction of its book value at a multiple of 0.5. Like Baytex, it too has struggled in the past month, losing around 30% of its value, and year to date it has fallen by more than 43%.
Unlike Baytex, however, Seven Generations is coming off a bit of a disappointing quarter, which saw sales flat from a year ago and profits down as well. However, it’s still a sharp sell-off that has put the stock at not just a new 52-week low, but a new all-time low as well. Over the years, Seven Generations has generated a lot of positive growth in its financials and could be a fantastic buy at its current price.
Although there’s more than a healthy degree of skepticism when it comes to oil and gas stocks, this is one that could have tremendous upside, especially if the company can bounce back with a strong quarter.
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 David Jagielski has no position in any of the stocks mentioned.