A stock market crash like we are currently seeing is extremely uncommon. Markets often crash, and they crash faster than they rise, but this sell-off has been rapid. Investors trying to keep up with all the latest developments and identifying those stocks with the most value has been a difficult task.
Day-by-day valuations are swinging wildly as more news and closures affect how investors view the market and the economy going forward.
Many stocks have incredible value now, but only a select few offer the best discounts.
Great Canadian Gaming is an entertainment company that owns numerous casinos and racetracks across Canada.
The company expanded its portfolio a few years back, acquiring numerous casinos and subsequently renovating a number of facilities.
These renovations were done to increase the profitability of the casinos. Adding more table games and higher profit machines were just some of the ways it has grown its revenue. Management also improved food and beverage options to help grow its ancillary sales.
However, in order to help slow the spread of coronavirus and incentive people to social distance, casinos are shutting down — closures that caused the stock to fall significantly.
As of Thursday’s close, Great Canadian now sits more than 60% off its 52-week high. That values the stock at just 6.7 times its trailing earnings.
While Great Canadian is no doubt facing short-term headwinds right now, when things begin to normalize again, investors who take advantage now and buy the stock at this incredible discount will reap the rewards.
Aritzia has been one of the top growth stocks on the TSX the last year. The business has been expanding rapidly, especially in the United States, where the company is still building out numerous stores.
The economics of its business are what make Aritzia such an appealing investment. The company is able to earn back the money from opening up new stores in less than two years on average.
It continues to grow in popularity with consumers in large part due to the company’s strong marketing efforts. It has been one of the top fashion companies that has capitalized on the popularity of social media influencers.
Like many companies, the stock price was deprecating with the market, but when it announced the closure of its stores due to the coronavirus, the stock was sold heavily and now presents an amazing opportunity.
Plus, in the interim, the company will still be pushing sales through its e-commerce website, which it was already trying to grow in popularity.
These store closures could end up being a blessing in disguise. If Aritzia can grow its ecommerce sales, and consequently the popularity of buying its items online, when the stores do reopen and it’s business as usual for the company, the new popularity of buying its items online could well continue.
The stock’s price is incredibly cheap now, down almost 60% from its recent highs as of Thursday’s close. There’s no telling how long the stores may be closed or what happens in the short run. But at these prices, Aritzia is a screaming buy.
As we have seen up until now, these stocks could still get cheaper. It’s important that investors don’t jump the gun and get impulsive rushing into stocks. Instead, take your time and be sure of what you’re buying.
At the same time, we know that over the long term, these companies will appreciate considerably. Thus, investors should be comfortable buying the stocks at whatever price they choose and holding it for years to come, as these companies will reward investors handsomely.
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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned.