It’s been a volatile past few months and with that comes a few corrected names that look like timely bets for those looking to bag a bargain as we inch closer to election day in Canada.
In no particular order, let’s get to the on-sale TSX stocks that look compelling at this juncture.
Alimentation Couche-Tard
Kicking off the list, we have Alimentation Couche-Tard (TSX:ATD.B), a rapidly growing convenience store consolidator that’s been growing ridiculously fast for a company with such an expansive global footprint.
Management continues to impress, both in same-store sales growth (SSSG) and through the driving of synergies through prior acquisitions. The company expects net income to double within the next five years and given the exceptional stewards running the show, I wouldn’t doubt the ambitious target.
The company will need to grow both organically and inorganically to achieve such a result. With debt lowering to levels to justify another significant acquisition, we may witness a deal in the high-ROE market of Southeast Asia. Wherever Couche-Tard looks to next, you can be sure that no deal will be made unless there’s a high likelihood of substantial benefits.
The stock has fallen by about 10% and for no real good reason. As a consumer staple that can hold up well in an economic slowdown, I’d load up on shares while they trade at just 18.4 times forward earnings before another impressive quarter sends the stock back to all-time highs.
TD Bank
TD Bank (TSX:TD)(NYSE:TD) has been known as Canada’s most premier bank stock. With lower-volatility earnings thanks to a robust retail banking business and a management team that’s more conservative than most, it’s not a mystery why TD Bank has traded at a big premium to its peers.
Today, the premium isn’t quite as big thanks to the U.S. brokerages’ race to $0 commissions. TD Bank owns a considerable chunk of TD Ameritrade, so when the brokerage announced the elimination of commissions, TD Bank stock took a mild hit to the chin, as its peers were spared.
While the exposure to TD Ameritrade is a definite negative over the intermediate-term, a $0 commission world, I believe, isn’t as horrid as most investors think. There are many other ways to make money in an era where investors are ditching their advisors to go the route of a DIY investor.
Moreover, TD Bank is still the same premium bank as it was before the TD Ameritrade sell-off. The stock is now just 7% cheaper, with a dividend yield just above the 4% mark.
Boyd Group Income Fund
Finally, we have Boyd Group Income Fund (TSX:BYD.UN), a stock that was featured in the 2019 TSX30 top performers list.
The chain of auto repair shops continues to unlock value for long-term shareholders through mergers and acquisitions. The industry remains highly fragmented, and with a management team that’s able to drive efficiencies like nobody’s business, we’re likely to continue to see years of outperformance from this low-volatility earnings grower.
Given Boyd stock has been a smooth ride up over the years, dips are rare, but when they happen, investors ought to be backing up the truck. At the time of writing, Boyd is down over 8% from its high, which is nothing more than a blip when you have a glimpse at the massive gains posted over the last five years.
Stay hungry. Stay Foolish.
