Benjamin Graham and Warren Buffett are not simply considered to be two of the best investors of our time. Indeed, the stock market geniuses have mastered the art of value investing to become the recognized successes they are. The world-famous investors took on long-term bets on what they identified as assets trading below intrinsic values.
In light of the coronavirus outbreak, the S&P/TSX Composite Index is down by more than 7% since the February 2020 peak. As the global stock markets falter, the time is ripe for value investors to take advantage of attractively valued assets and place their long-term bets.
Mullen is an undervalued stock that operates in transportation. The company provides a range of specialized transportation services to Canada’s energy sector operators.
The trucking and logistics services company has a strong presence in Western Canada, providing transportation services to the oil and natural gas industries.
Mullen’s stock price has been affected by weak oil and natural gas prices along with the coronavirus outbreak. The stock is trading for $7.71 per share at writing – down more than 35% from the same time last year. Its most recent slump since the start of 2020 is 16.65%.
The $808.20 million market capitalization company is trading at a forward price-to-earnings ratio of 13.53 — a bargain given its juicy 7.78% dividend yield. The bear market will likely see the stock fall further in 2020, but its long-term prospects are reliable as the market recovers.
IA Financial is a Canada-based behemoth offering life and health insurance products to its customers. The firm also provides retirement plans, mutual funds, home and auto insurance, mortgage loans, savings plans, and other related services.
The $6.88 billion market capitalization company’s stock more than doubled through the last 10 years. Analysts expect IAG to increase its earnings per share by almost 10% in 2020 and by nearly 7% in the next year. The company managed to increase revenue by 13% year over year in 2019.
At writing, the stock is trading for $63.07 per share, and it offers shareholders a juicy dividend yield of 4.28%. Its low payout ratio of 27.58% gives it plenty of room to increase its payouts to shareholders.
The company has attractive share prices due to the current market scares and could show fantastic growth once the markets get back to normal.
Value investing relies on choosing potentially fantastic value picks. You have to choose assets that have an attractive valuation right now that you can expect to rise in value with passing time substantially.
The coronavirus outbreak is impacting global economies, and stock markets are falling across the board. The market correction territory will make attractively valued stocks even more affordable.
Investing in stocks like IA Financial and Mullen Group can prove to be terrific long-term bets for value investors.
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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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends MULLEN GROUP LTD.