Since today is Boxing Day, and many people around the country are out and about, looking for some great deals to spend their Christmas cash on, investors need some discounts, too.
Luckily for investors, though, you don’t need to leave your couch to find what might be the best deal of the year with this high-quality, undervalued stock.
Buying some shares of this company today could set you up for a profitable 2020 and beyond, so you won’t want to wait long, or the value could be eroded as the stock’s price is getting bid up.
This year’s best Boxing Day deal on the TSX is Leon’s Furniture (TSX: LNF).
Leon’s is a company many wouldn’t think at first is that exciting of a stock, and it isn’t, but sometimes boring and reliable is exactly what you want.
It operates in the furniture business in Canada, and its market position is very strong, as it operates some of the most well-known and trusted Canadian brands across the country.
The furniture business isn’t going anywhere, and thousand-dollar couches aren’t something that’s bought online, so it’s risk there that many other retailers face is almost non-existent.
You know the industry has good fundamentals as well as solid economics when Warren Buffett has owned a furniture retailer for decades and his company Berkshire Hathaway just made a major $200 million investment in U.S furniture retailer RH this year.
Plus, on top of a low-risk and stable business it’s been building, it’s also been adding other key elements to its operations that integrate the company and give it that much more potential.
The company has added furniture insurance and repair services to its operations, which only retains more customers, drives more sales, and helps to scale costs — all major things that will lead Leon’s to be a top performer going forward.
What’s most intriguing about Leon’s, though, is its premium real estate locations it owns in many of the major cities across Canada.
As the real estate industry continues to stay hot in Canada, and large properties in downtown urban areas are highly sought out, Leon’s is sitting on a gold mine.
These locations could easily be sold for major profits and the stores moved elsewhere. It also acts as some collateral and a backup plan for investors, if, for some crazy, unforeseen reason, Leon’s business struggles and it needs something to fall back on.
That’s unlikely to happen, though, as it continues to grow its operations and its profitability remains impressive.
Currently, it has about a 12% return on equity over the trailing 12 months, while its stock has traded extremely cheap all year long at just a 12 to 13 times price-to-earnings ratio.
For investors wondering about the dividend, it pays an annual dividend of $0.56, which yields more than 3%, plus it has huge upside in its share price, making it one of the best deals on the TSX.
Investors have already been tipped off to this exciting Boxing Day deal, which has bid up its share price to be at or near its 52-week high.
The discount still exists though as Leon’s stock still has plenty of upside and isn’t even trading near its all-time highs, which it reached in 2015 and again twice in 2017.
Its high-quality business coupled with its cheap stock price makes it one of the biggest opportunities going into 2020, so scoop up your shares as soon as possible, because this deal won’t last.
