After several days of falling, the TSX today has multiple bargains for investors. If you’re looking for undervalued stocks, luckily, today there are many options. That’s especially true for the cannabis, energy, and airline sectors. These three sectors continue to trade far below fair value. I’ll dig into three options that are screaming buys on the TSX today.
Pembina Pipeline stock
A lot of investors are looking at pipelines as a way to take advantage of the energy rebound. And they would be right! Yet Pembina Pipeline (TSX:PPL)(NYSE:PBA) continues to trade below fair value. The company fell, as oil and gas prices slumped back in 2018, but it has since been slowing climbing back. Yet this initial fall was unwarranted.
Pembina Pipeline stock has long-term contracts that will see cash flowing in for years. As oil and gas production continues to climb and demand increases, Pembina Pipeline stock is likely to see even more revenue. That’s especially as it has billions in growth projects set to come online.
Shares in Pembina Pipeline stock are 27% in the last year but continue to trade at 1.8 times book value. That makes it bargain on the TSX today. Meanwhile, you can lock in a dividend yield of 6.35% as of writing.
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Canopy Growth stock
Cannabis stocks continue to trade at incredibly low levels given the future of the industry. While there have been growing pains, these companies hit a major road block with the pandemic affecting production. But now, the pandemic is coming to an end. And consumers continue to want cannabis in any form possible. That’s why investors on the TSX today should consider Canopy Growth (TSX:WEED)(NYSE:CGC).
Canopy Growth is the only marijuana stock on the TSX’s top 60 stocks — the only one. That right there should tell you how Canopy Growth stock is going to grow at a solid clip out of this downturn. Canopy Growth stock found a number of cost-cutting measures even before the pandemic, and acquired several companies for when United States legalization eventually happens.
Yet shares remain low, trading at 2.7 times book value, with Canopy Growth stock up just 23% in the last year alone. Yet that’s still a 957% increase since it came on the market. Even better, that leaves a potential upside of 176% to reach all-time highs on the TSX today!
Air Canada stock
Finally, it can seem risky to invest in airline stocks today, but, frankly, people will fly again. So, while it might take some time for a company like Air Canada (TSX:AC) to get back in the air at full capacity, it will happen. That also means those $50 share prices will return once more.
And that’s why the TSX today offers a great opportunity for investors in Air Canada stock. The company already had a plan to pay down its billions in debt, and the government aid package has made it ready to get planes back in the air. By September, many Canadians (and people in general) will be fully vaccinated and wanting to make holiday travel plans. If news comes from the government with fewer restrictions, investors should see an intense boost in share price.
Yet today, shares may be up 76% in the last year, but there is still a potential upside of 100% as of writing to reach all-time highs. That’s still undervalued in my book, especially for long-term investors on the TSX today.
But if you'd rather wait and see what will happen with Air Canada stock, then these might be great HIGH-GROWTH options!
Before you consider Air Canada, you may want to hear this.
Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now... and Air Canada wasn't one of them.
The online investing service they've run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.
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 Amy Legate-Wolfe owns shares of AIR CANADA, Canopy Growth, and PEMBINA PIPELINE CORPORATION. The Motley Fool recommends PEMBINA PIPELINE CORPORATION.