You don’t need to have a high net worth to get started investing with TSX stocks. What you do need is the proper temperament and a long-term time horizon.
These days, with “sexy” investments and bubbles floating around the market, it’s tough to have either the proper temperament or a true long-term time horizon.
Red-hot IPOs, SPACs, Bitcoin, NFTs, SaaS companies, and EV stocks have undoubtedly shrunk the definition of a long-term horizon. Certain speculators and day traders may define a long-term horizon as spanning a few months.
It’s never too early to get started investing
As Foolish long-term investors, we measure a long-term horizon in years, if not decades. Not in mere months, as some momentum chasers may. We’re unmoved by the day-to-day or month-to-month price action in the TSX stocks we follow.
Charlie Munger, Warren Buffett’s right-hand man and colleague, is more than willing to sit on his hands for years after he’s purchased shares of a business he really loves. Like Buffett and Munger, if you are willing to buy and forget for years and decades, you have what it takes to reach a prosperous retirement. You need to get started as soon as you’re able. So, forget timing the stock market (and the bond market) and let’s get put your extra $500 to work today.
In this piece, we’ll have a look at two undervalued TSX stocks that you may want to consider amid today’s rocky market. So, without further ado, consider Alimentation Couche-Tard (TSX:ATD.B). While the blue-chip stock won’t make you as rich overnight as Bitcoin or Dogecoin could, it can help you build wealth and stay rich over prolonged periods. Once the bubbles (EV stocks and cryptocurrencies) in this market burst and the speculative areas are dragged lower, just like in the dot-com bust, you’ll be glad you stuck with fundamentals rather than following the herd.
A misunderstood TSX stock Warren Buffett fans can appreciate
Couche-Tard is a global convenience store roll-up that I believe has “Warren Buffett stock” written all over it. The business is boring, it’s easy to understand, it’s wildly profitable with decent ROIC numbers, and most importantly, its stock is severely undervalued amid COVID-induced pressures. For those looking to grab a bargain at a huge discount to its intrinsic value, Couche-Tard stock, I believe, is one of those rare “steals” hiding in plain sight on the TSX Index.
Couche has suffered from a fair share of stumbles recently. Investors aren’t a fan of the firm’s willingness to pivot into the business of grocery stores. Couche’s pursuit of French grocer Carrefour failed, yet Couche stock remains stuck in the penalty box because investors are still unsure of the deal.
To add even more salt to Couche’s wounds, the firm recently clocked in a mediocre quarter that saw fuel volumes fall by 20%. I thought that was to be expected given COVID-19’s impact. Right now, Couche stock is under profound pressure, and I think one has to go against the grain here now that pessimism is the highest it’s been in quite a while.
The Foolish bottom line
Couche is a wonderful earnings growth company priced as a distressed company that’s going out of style. At 13x trailing earnings, I’d say now is the perfect time to punch your ticket to the TSX stock before management starts putting its cash and credit hoard to work on accretive acquisitions.
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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 Joey Frenette owns shares of ALIMENTATION COUCHE-TARD INC. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC.