There are still plenty of top Canadian stocks under $5 that you can pick up at a discount today. While I wouldn’t advise chasing stocks based solely on their low dollar price amounts (you’ll find yourself getting into trouble with penny stocks pretty fast), it makes sense to put every dollar to good use as soon as you’re able.
The two sub-$5 TSX stocks in this piece are wonderful growth businesses at attractive valuations and a stock price that happens to be under $5. Both names are promising mid-caps that aren’t as dangerous as the sub-$100 million market cap companies that could crash in an instant.
Undervalued Canadian stocks under $5
If you only have a small sum to invest and won’t be on the hook for sizeable commissions, the following two Canadian stocks under $5 are among the top bets for mid-April 2021.
While they won’t make you rich overnight, as some of the more speculative instruments out there like Special Purpose Acquisition Companies, or Non-Fungible Tokens, they can help you turn a modest amount of principal into a sizeable sum over the next five years and without having to risk your shirt and pants. So, without further ado, let’s have a closer look at each play to see which, if any, is worthy of your portfolio in today’s seemingly frothy market.
At $4 and change, StorageVault Canada (TSXV:SVI) is quite possibly the “safest” Canadian stock that’s listed on the TSX Venture Exchange. The self-storage company is poised to continue benefiting from industry tailwinds that are often referred to as “the four Ds:” death, divorce, disaster, and displacement. Bad things happen, usually at the worst possible times. But self-storage play StorageVault Canada is a quick way to ease the pains of dealing with a surplus of stuff.
StorageVault is essentially a REIT for your stuff. And while the pandemic has caused many to ditch the inner city for more spacious homes in the suburbs, I don’t think that such a trend will last for long, especially in costly, crowded Canadian cities like Vancouver or Toronto, where it’s impossible to afford a home that can accommodate all of one’s stuff.
The Canadian self-storage market has its own set of tailwinds. And it appears to have way more room to run than the more mature U.S. self-storage market. In any case, Canadian investors should buy shares while they’re still cheap relative to their long-term growth rate. The Canadian stock trades at 9.8 times sales, which is pretty modest for a firm that’s averaged 36% in top-line growth over the last three years.
Fire & Flower Holdings
For $1 and change, you can buy you a share of Fire & Flower (TSX:FAF), a cannabis retailer that’s head and shoulders above the competition thanks to its partnership with c-store giant Alimentation Couche-Tard, which has a growing stake in the Flower’s business.
On its own, Fire & Flower is a top cannabis retailer with a solid e-commerce presence and brick-and-mortar stores that draw upon the experiential factor that’s grown so popular with millennials.
With the mutually beneficial relationship with Couche-Tard, I believe Fire & Flower is a sleeper pick in the budding cannabis retail market. While small-cap cannabis plays like Fire & Flower are pretty speculative, I’m willing to give the firm a pass for its dealings with an established c-store kingpin and its modest valuation (under 2 times sales at the time of writing).
I wouldn’t want to speculate on whether Couche will continue upping its stake. Still, I certainly would not be surprised if it continues growing through the years, especially if the Couche-Flower joint venture continues yielding fruit.
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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.