The TSX is recovering. Since the horrible crash in March, the TSX Composite Index is on its way up. And even though it dipped a few times, the fall didn’t go beyond 6%. But the broader performance of the index is not accurately translated in the recovery of stocks, and on a more granular level, the individual stocks. Even though the overall aura is of recovery, there is a lot of disparity in the pace.
If you haven’t acted yet and used your capital to buy stocks that are tastefully undervalued and trading at a discount, you may still have a chance. Three stocks that still haven’t caught up to their pre-crash values are Global Water Resources (TSX:GWR)(NASDAQ:GWRS), Blackline Safety (TSXV:BLN), and iA Financial (TSX:IAG).
A total water management company
Global Water Resources has a very focused regional presence for a company with its name starting with global. Global Water is headquartered in and primarily operates in Phoenix, Arizona. The company aims to preserve and carefully use the limited resource of fresh water by taking control of the whole water supply cycle in an area. That means it owns water supply, wastewater management, and recycling facilities.
Over the years, the company has acquired a number of subsidiaries, almost all operating in Arizona. Since this U.S.-based water company also trades on TSX, investors here can benefit from this $6.7 billion market cap company’s growth and dividends.
Before the crash, the company grew over 160% in the past five years. Right now, the company is trading at $15 per share, 19% down from its pre-crash high.
A small safety company
Blackline Safety is a small venture capital company with a market cap of just $264.5 million. Its primary focus is on lone-worker security equipment and wireless gas detectors. The company works with and in a wide variety of industries, ensuring the safety (and evacuation if something goes wrong) of individuals working in hazardous conditions.
The company spends a decent amount of its revenues on research, which usually pushes down its operating income into negative territory.
Some of the good things about the company are its capital growth potential, minimal debt, and a decent amount of cash on hand. Two bad metrics are its negative return on equity and income margin.
The company is currently at a price ($5.5 per share), that’s 24.5% down from its pre-crash value. Even at this valuation, the company touts a 10-year compound average annual growth rate (CAGR) of 17.46%, making it a decent growth stock trading at a low price.
A Dividend Aristocrat
Many aristocrats, especially from energy and finance sectors, haven’t truly recovered yet. One of them, iA financial, is still trading at a price of about 37% lower than its pre-crash value. It’s one of the largest insurance and wealth management groups in the country with a market cap of about $5.08 billion. The company serves over four million clients and manages assets valued at about $175 billion.
It has increased dividends for six consecutive years, and is currently offering a yield of 4.14%. In the past five years, the company grew its dividends by about 61%. Before the crash, it increased its market value by about 77%.
The three stocks are just some of the still-recovering stocks that are trading on TSX right now. Based on your appetite for growth, risk, and dividends, you can choose stocks that best fit your portfolio.
Now might be a perfect time because if another correction/crash doesn’t come, you may not see these low valuations anytime soon.