Investors seeking growth at reasonable plays have arrived at the right place. Today, I’ll be discussing three stocks on the TSX that I believe highlight deep value today.
Let’s dive in.
When it comes to value stocks, Alimentation Couche-Tard (TSX:ATD.A)(TSX:ATD.B) has been one of my top picks on the TSX for quite some time. This stock has a valuation multiple of 15 times earnings and trades around the $44 mark at the time of writing. Indeed, it’s dirt cheap right now considering the broader market.
Yes, the gas station and convenience store sector is quite enticing from a long-term perspective. However, this space has been severely impacted over the near-term due to the pandemic.
That said, the reopening thesis remains strong today because of this fact. As we all start driving to places again and visiting our favourite convenience stores, revenue and profit growth should once again materialize.
Furthermore, Couche-Tard’s management team is one of the best in the space at creating long-term growth via acquisitions. I expect this trend to continue over the long term, and view this stock as a strong buy at these levels.
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Kirkland Lake Gold
For investors looking to play the gold mining space, Kirkland Lake Gold (TSX:KL)(NYSE:KL) remains one of the best options out there today. Yes, gold hasn’t performed as well of late as many investors would have expected.
That said, gold is once again on the rise, as is Kirkland Lake’s stock price. The company’s valuation remains dirt cheap at roughly 16 times earnings and should see a big boost in the coming months if the market appreciates that gold prices will remain higher for longer.
The company’s got some high-quality mines and best-in-class margins. Accordingly, I view this stock as an unstoppable cash flow machine at these levels.
With a pristine balance sheet and a relatively large war chest, Kirkland Lake stands as one of the few gold producers with the ability to ramp up distributions to shareholders for a very long time. This is a company with cash flow growth potential unlike any of its peers right now. In the gold space, this is my hands down my top pick.
A safer, defensive pick long-term pick investors may want to consider is Gildan Activewear (TSX:GIL)(NYSE:GIL). This maker of undergarments, T-shirts, and other essentials stands to benefit from a rise in retail spending coming out of this pandemic.
Indeed, the company’s operations remain best in class with some rather juicy margins relative to the sector. Additionally, Gildan boasts some influential brands in its core operating segments. Gildan has also been able to strengthen relationships with its partners and build incredible value across its supply chain.
The company’s balance sheet looks better today than it has in some time. I think this is another undervalued stock with a valuation that’s hard to ignore at this level. The company trades at roughly 23 times earnings at the time of writing. Compared to the market, these three picks represent some deep value today.
Like these top value picks? Here are some higher-growth options to consider right now:
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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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC. The Motley Fool recommends GILDAN ACTIVEWEAR INC.