We’re all about sound fundamental analysis here at the Motley Fool. Still, after you’ve done your due diligence on a stock, I think having a look at the technical story can only add to an already solid investment thesis. Even if you’re a fundamentals-first investor like me, viewing technical moves can aid with your entry into or out of stocks if such technicals are in alignment with your analysis. Of course, the technical story is independent of the fundamentals. But that doesn’t mean it can’t serve to supplement your fundamental analysis further.
In this piece, we’ll have a look at two top TSX stocks that I believe to be fundamentally sound, with outstanding long-term growth stories and reasonable prices of admission at current levels. Both stocks, I believe, look undervalued relative to the magnitude of their long-term growth profiles, with a technical picture that just so happens to be stellar.
Whenever the technical and fundamental pictures come into alignment, you could be looking at a timely bet that you may wish to act on, regardless of what the talking heads on TV deem is next for the markets as a whole. So, whether there’s a market crash, correction, pullback, or bear market, consider shares of Jamieson Wellness (TSX:JWEL) and ATCO (TSX:ACO.X) as timely plays for short-term traders and long-term investors alike.
Jamieson Wellness is a legendary vitamin maker that’s been in business for almost a century. While the firm is in a boring commoditized industry that’s been little changed over the past few decades, it would be a mistake to think that Jamieson isn’t capable of next-level growth now that it has greater access to capital.
The Jamieson story has never looked this good, with international markets and enough funds to put into new products. While the pandemic has made many more health conscious, I think that the health trend will hold strong well after this public health nightmare is over. Health consciousness is a profound secular trend, and Jamieson Wellness is a great way to bet on it for the next decade and beyond.
The stock is just coming off a nasty dip into bear market territory (a plunge of at least 20%), cutting the froth right off of the top of the stock. I think the dip is a buyable one, especially after its symmetrical continuation triangle, which suggests the stock could be headed to a new all-time high over the next few months.
ATCO is a diversified energy, engineering, and logistics holding company based out of Calgary. You may know the company for its utility subsidiary, Canadian Utilities, a publicly traded entity with its own handsome dividend yield.
The stock sports a juicy 4.7%-yielding dividend, alongside a depressed valuation following the coronavirus crash that sent shares tumbling by nearly 40%. Today, the stock is off 30% from its 52-week high, with a mere 1.1 times price-to-book multiple. Shares are not only cheap, but they also look technically sound, with a bullish diamond bottom reversal pattern that looks to have formed.
Should the reversal come to fruition, the stock could be in for a 20% upside move over the medium term. With earnings on tap for February 25, investors may wish to scoop up shares now if they seek income, value, and timely gains. Steady Eddie dividend stocks like ATCO fell out of favour in 2020, but I think it’s well positioned for a major comeback as we inch closer to the post-pandemic world.
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Fool contributor Joey Frenette has no position in any of the stocks mentioned.