2 Value Stocks to Buy Right Now

Now is the time to buy value stocks. Your buy list should include BlackBerry Ltd. (TSX:BB) and Brookfield Property Partners L.P. (TSX:BPY.UN)(NASDAQ:BPY).

| More on:
Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks

Image source: Getty Images.

The COVID-19 crash created countless opportunities to buy value stocks. The latest rebound reduced that opportunity set, but there are still bargains to be had.

The important thing is to remember what value means. In short, it means buying companies for less than they’re really worth. In order for this to be possible, the market has to be wrong. There has to be an asymmetric view on the businesses value.

“I believe that I know more about this investment than you, the seller,” explains value investing legend Seth Klarman. The ability to outwit the market requires intelligence, but most of all, it requires effort and patience.

“Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon,” Klarman adds. “Few are willing and able to devote sufficient time and effort to become value investors, and only a fraction of those have the proper mind-set to succeed.”

One of the best ways to maximize your odds of success is to leverage the work of other investors. After sifting through the entire market, the value stocks below should top your buy list.

Think outside the box

BlackBerry Ltd. (TSX:BB) isn’t usually a top pick for value investors, but it should be. Due to market inefficiencies, this stock trades at a 70% discount to the competition. Even a slight normalization in multiples would lead to an easy double.

Here’s what the market doesn’t get: BlackBerry has totally reinvented itself. Last year, it didn’t produce any smartphones. It has completely exited the hardware business. Today, it’s all about cybersecurity software.

Every day, the world adds thousands of internet-connected devices. All of these devices become vulnerable to hacking. That’s especially bad news when we’re talking about things like autonomous vehicles.

BlackBerry’s QNX platform, for example, is already installed in 150 million cars worldwide. It uses artificial intelligence to detect threats before they happen!

BlackBerry is benefiting from a market that will grow by 20% annually for decades. Doesn’t that make it a growth stock? It would if shares were priced correctly. Instead, they’re priced at value stock multiples.

Right now, BB stock trades at three times sales. Better-known competitors like Crowdstrike Holdings Inc trade at 30 times sales. Taking advantage of this market mispricing should lead to sizable gains.

A classic value stock

Brookfield Property Partners L.P. (TSX:BPY.UN)(NASDAQ:BPY) is a more traditional pick for value investors, but it still has lucrative upside.

Brookfield is known for owning some of the best real estate on the planet. Properties like First Canadian Place in Toronto, Brookfield Place in New York City, and Canary Wharf in London. These are irreplaceable assets with permanent value, but thanks to the coronavirus, shares trade at 30% of book value!

As Klarman stresses, value stocks like this take patience. Brookfield owns a sizable amount of retail and office locations. These properties won’t return to their full value until the coronavirus pandemic eases.

If you’re willing to have a multi-year time horizon, this is a great opportunity. As shares move toward their historical valuation multiple, there should be at least 80% upside.

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.

The Motley Fool owns shares of and recommends CrowdStrike Holdings, Inc. The Motley Fool recommends BlackBerry, BlackBerry, and Brookfield Property Partners LP. Fool contributor Ryan Vanzo has no position in any stocks mentioned.

More on Dividend Stocks

young woman celebrating a victory while working with mobile phone in the office
Dividend Stocks

3 CRA Benefits Most Canadians Can Grab in 2024

You can save on taxes by claiming the dividend tax credit on Fortis Inc (TSX:FTS) shares.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »