Stocks have been struggling lately, as the trade war between the U.S. and China has been weighing down the markets. Below are three stocks that are trading below their book values that could be bargain buys today.
Corus Entertainment (TSX:CJR.B) was doing well this year until we learned that Shaw Communications was going to be selling its interest in the media company at a price well below where the stock was trading at. That put a lot of negative pressure on Corus’s stock price and has helped the stock decline by more than 35% in just the past three months.
Corus was already undervalued then, and it’s trading at even more of a discount now. At a price-to-book ratio of less than 0.7 and a price-to-earnings multiple of less than seven, Corus is a steal of a deal given the popular channels that it holds in its portfolio, including Disney Channel Canada and HGTV. It’s a good bet to recover from where it is today.
And not only is there a good opportunity for investors to benefit from potential capital appreciation, but the stock also pays a great dividend of around 4.7%, and that’s after recently cutting it.
Cenovus Energy (TSX:CVE)(NYSE:CVE) hasn’t been on as sharp of a decline as Corus has been lately, but it too has not gotten a lot of love from investors lately. The stock is down 6% over the past three months, and in one year it has fallen by around 14%.
While profits have been hard to come by, the company has been making good progress with two straight quarters being in the black and its most recent earnings report reporting a profit of $1.8 billion. Despite Cenovus making some improvements, the stock still trades at around 0.7 times its book value.
Unfortunately, oil prices have been falling, and given that Cenovus’s share price is highly correlated with West Texas Intermediate, it may not come as a surprise that the stock has been down again. Nonetheless, it could be a good investment to make given OPEC’s appetite for a stronger price of oil and the likelihood that we’ll see efforts continue to be made to give oil prices a boost.
AltaGas (TSX:ALA) has done very well this year, climbing around 40% since January. And yet, even though it has rallied so much this year, the stock is still trading below its book value. A year ago, the stock was trading at more than $25 a share and it still has a long way to go in getting back to its previous highs.
The company has been improving and tightening up its business, posting strong profits lately. And with more of a focus on the U.S. markets, there’s a lot of potential growth for AltaGas over the long term. It’s a very cheap buy today, and combined with a dividend of around 5%, it can give investors many different ways to benefit from owning the stock.
AltaGas gives investors a lot more stability than a typical oil and gas stock would, as it also has a lot of recurring income from its utility business.
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 owns shares of CORUS ENTERTAINMENT INC., CL.B, NV. David Gardner owns shares of Walt Disney. The Motley Fool owns shares of Walt Disney and has the following options: long January 2021 $60 calls on Walt Disney and short October 2019 $125 calls on Walt Disney. AltaGas and Walt Disney are recommendations of Stock Advisor Canada.