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TFSA Investors: A Rare Opportunity to Buy This Top TSX Stock for Dirt Cheap

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2020 has been an eventful year for stock markets all over the world. Savvy investors who are able to eliminate the short-term noise and focus on buying long-term TSX stocks have been heavily rewarded.

Up until the coronavirus pandemic hit the global economy, markets had been on a lengthy bull run. So, when stocks crashed earlier this year and fell by massive amounts, it was one of the best opportunities in years for investors.

As markets recovered in the months that followed, many of these stocks returned to fair value eroding the bargains they offered investors back in March. Some stocks, however, have been missed by the market and remain dirt cheap.

TSX stocks still trading undervalue

At this point in the economic recovery, with the TSX index off its highs by just 8%, you have to be careful about which value stocks you’re buying.

Any stock that remains well off its highs is because the market has deemed it to still be considerably risky for whatever reason. A lot of that will have to do with its industry; however, it’s important investors recognize this increased risk.

There’s a good chance that many cheap stocks on the market today are value traps, which is why it’s even more crucial that investors do their homework before buying one of these dirt-cheap businesses.

TSX stock to buy today

If you want a solid TSX stock that’s trading ridiculously cheap, I would recommend investors consider Corus Entertainment (TSX:CJR.B).

Corus is a media content and entertainment company that owns television and radio assets. The majority of Corus revenue, however, comes from TV.

The company predominantly makes money in two ways. Firstly, through advertising selling commercial time to clients. The second way is through subscription services to either its specialty channels or its streaming service.

When the pandemic first hit, the fear was that Corus would lose a significant amount of revenue, as companies pulled their ad campaigns. The fear was compounded even more when investors became concerned that the company may have to trim its dividend.

So far, that hasn’t needed to happen. In the second quarter (the quarter with the most impact from the pandemic), the TSX media stock saw its revenue fall by just over 20%. Furthermore, the company still managed to earn a profit before tax. However, the free cash flow the company is still able to generate is what’s most appealing.

Dirt-cheap valuation

The stock is currently trading at a forward price to free cash flow of just 2.3 times. Furthermore, it’s trading at a forward price-to-earnings ratio of just 4.4 times. These ratios show just how cheap the stock is priced these days.

Right now, it’s all about weathering the storm for Corus. However, if it can continue to execute and keep its business in good financial shape, there is huge potential upside, as the economy continues to recover.

Finding TSX stocks trading at bargains this attractive is a rare opportunity. Moreover, when you consider Corus also pays a dividend that’s yielding roughly 8%, it quickly becomes apparent that Corus is the most attractive stock on the TSX.

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Fool contributor Daniel Da Costa owns shares of CORUS ENTERTAINMENT INC., CL.B, NV.

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