Since the sudden crash back in March, a lot of TSX stocks have gone on significant rallies. In the U.S., the S&P 500 has reached new highs, and in Canada, the TSX is not far off.
Despite the strong rebound by all the stock indices, there are still several individual stocks trading way off their pre-pandemic highs.
For most of these stocks, the underperformance since the start of the pandemic is not surprising. Some industries have been impacted far worse than others, so investors have avoided the stocks. However, this also creates a significant opportunity for savvy investors.
As we continue to move through reopening phases, and vaccines are rapidly progressing through trial phases to help contain the pandemic, this could be the prime time to get these stocks while they are still undervalued.
There’s no doubt that the pandemic has had a massive impact on every TSX stock. However, these businesses are all resilient enough to ride out the storm. So, for investors willing to buy today at these levels, your patience will certainly be rewarded.
Here are three TSX entertainment stocks to consider buying today.
TSX media stock
The first stock to consider is one that’s had the least significant impact of the three: Corus Entertainment (TSX:CJR.B).
Corus’s primary business is T.V. media, and while viewership actually increased during the pandemic, a lot of advertising dollars were lost.
The company has held in relatively strong, though. Management elected not to trim the dividend, and the significant work the company has done to reduce its debt load the last few years has given it a tonne of breathing room.
As the reopenings continue, and companies restart their ad campaigns, I expect a lot of that lost revenue to be recovered quickly.
Corus has started to rally recently, however, despite that the stock remains down 35% from where it began the year. And with its juicy 7.1% dividend, I believe the combination of value and income is too attractive to pass up.
Another top TSX entertainment stock to consider is Great Canadian Gaming (TSX:GC). The company was a top growth stock before the pandemic and is still a top pick for long-term investors.
However, the impact on the casino business from the pandemic has been extremely severe. There is no doubt that facilities where patrons are crowded together, spend long periods of time, and touch multiple surfaces would be shut down the longest.
So, investors who are interested in Great Canadian should be committed to owning it long term from the start.
There is considerably more uncertainty investing in an industry that’s been this impacted. However, there’s also a huge opportunity for significant share price appreciation, plus a continuation of its long-term growth once things get back to normal.
Since the bottom in March, Great Canadian has only gained back 40% vs. the TSX, which has gained back nearly 50%. Furthermore, the stock remains 40% down from its pre-pandemic high vs. the TSX, which is down roughly 7%.
There’s no telling where the stock may go in the short run, but if you don’t want to buy it today, I’d definitely keep it on your watch list. It’s one of the top long-term growth stocks on the TSX.
TSX entertainment stock
The last stock to consider is the battered theatre operator Cineplex (TSX:CGX). Cineplex is in a position similar to Great Canadian.
At the moment, there is still a tonne of uncertainty, and that’s turning away a lot of investors. However, Cineplex has always been resilient, and with its growth potential, it could offer investors huge potential in the medium to long term.
The company has now reopened nearly all of its theatres in addition to all of its Playdium and The Rec Room locations. And in the near term, the company has more than enough liquidity to weather the storm.
At roughly $9 a share, the stock is down nearly 75% from where it started the year. So, it’s still heavily discounted for those long-term investors willing to buy today.
Although these stocks have seen significant impacts from the pandemic, at current prices, these three TSX stocks are just too cheap to ignore.
Speaking of really cheap TSX stocks...
Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.
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 Daniel Da Costa owns shares of CORUS ENTERTAINMENT INC., CL.B, NV.