Got $3,000? 3 Beaten-Down Stocks to Buy Right Now

These beaten-down stocks offer good value and are among the top recovery bets.

| More on:
Woman has an idea

Image source: Getty Images

As the pandemic decimated demand, several TSX-listed stocks lost significant value. However, with the gradual pickup in demand (thanks to the reopening of the economy), a few TSX stocks showed a sharp recovery in the recent past.  

Despite the recovery, they offer good value and continue to trade cheap compared to their pre-pandemic levels. So, if you got $3,000 to invest, consider buying these three stocks while they are still low. 

Gildan Activewear

Shares of Gildan Activewear (TSX:GIL)(NYSE:GIL) are among my top recovery picks. Its stock recovered sharply and has surged over 110% from its March lows. Despite the stellar run, Gildan Activewear stock is still down about 26% since the start of the year and offers good value for investors looking to bet on the recovery theme. 

Gildan Activewear registered a major reduction in sales, reflecting social-distancing measures, closure of retail outlets, and restrictions on its manufacturing and distribution channels. The company’s net sales during the second quarter of 2020 plunged 71% year on year. Moreover, Gildan Activewear was forced to suspend its dividends and share-repurchase programs. Also, it implemented significant pay reductions to boost liquidity and stay afloat amid challenges. 

However, with easing lockdown measures and the restart of its production facilities, Gildan Activewear has started to see improving sales trends. While an uncertain economic trajectory poses a challenge in the near term, Gildan Activewear stock could gain big over the next three years, reflecting the recovery in demand. 

Bank of Montreal

As the economic activities pick up the pace, bank stocks are likely to witness a strong recovery. Meanwhile, with a year-to-date decline of over 16% in stock and a price-to-book multiple of 1.1, Bank of Montreal (TSX:BMO)(NYSE:BMO) is another top recovery bet

Despite the significant disruption from the pandemic, the bank’s revenues showed improvement in the most recent quarter, thanks to its ability to drive loans and deposit volumes. Further, its pre-provision, pre-tax profits remain strong. 

Bank of Montreal stock is likely to benefit from the significant sequential decline in the provisions for credit losses. Meanwhile, the continued expansion of the balance sheet and strong expense management should cushion its bottom line and, in turn, its stock. 

Investors are also expected to benefit from the bank’s robust dividend payouts. The bank has been paying dividends for a very long period. Meanwhile, its dividends have been growing at a healthy pace. Currently, Bank of Montreal pays a quarterly dividend of $1.06 per share, translating into an annual yield of 5.2%. 

Spin Master 

Like Gildan Activewear, Spin Master (TSX:TOY) stock has also marked a stellar recovery from its March lows and has jumped over 199%. However, its stock is still down over 26%, providing an excellent buying opportunity right before the key selling season. 

Its production facilities are operating at normal levels. Moreover, its top three customers are continuing with their purchases. Also, its digital offerings are growing at a healthy pace with sustained growth in its monthly active users. 

Spin Master’s multi-platform products, growing digital and entertainment assets, and the upcoming holiday season should drive the recovery in its stock and boost investors’ returns. 

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Spin Master. The Motley Fool recommends GILDAN ACTIVEWEAR INC.

More on Dividend Stocks

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 »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »

Payday ringed on a calendar
Dividend Stocks

3 Dividend Stocks That Pay Me More Than $54.57 Per Month

These three dividend stocks have done me well over the years, so let's look at how much I've gotten in…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Royalty: 3 Fabulous Stocks to Buy Now for Decades of Passive Income

Rogers Communications stock and Canadian Natural Resources stock could pay you dividends for decades to come.

Read more »

Dividend Stocks

The Top Canadian REITs to Buy in April 2024

For growth and dividends this April, look to these two REITs that have quite the promising present as well as…

Read more »