Sometimes it’s good to be cheap. And when it comes to investing, it can be downright great to be cheap. While a cheap share price isn’t the best way to find a stock to buy, it also doesn’t mean you should write it off as a bad one. So here are two cheap stocks to buy now if you’re looking for a strong long-term investment.
1. Hexo stock
Trading at less than $8.50 per share as of writing, HEXO (TSX:HEXO)(NYSE:HEXO) is a $1 billion company with serious long-term potential for growth. The Canadian cannabis operator owns several marijuana brands, focusing primarily on the cannabis-infused industry. It offers dried cannabis under the Time of Day and H2 lines, cannabis oil mist through Elixir, cannabis powder through Decarb, and adult-use and medical products under its HEXO brand name.
Then there’s the beverage industry. HEXO stock offers cannabis beverages under Little Victory, House of Terpenes, Mollo, Veryvell, and XMG brand. This is supported by a partnership with Molson Coors Canada.
While we are still waiting on third-quarter results, it seems HEXO stock must have money to blow. That comes from its recent acquisition of Redecan for $925 million, an acquisition that puts HEXO stock as the number one market share in Canadian recreational cannabis, equipping it with a diverse brand portfolio in the process to build wealth.
Shareholders who bought HEXO stock a year ago have seen shares rise by 93%. In fact, it’s still working toward those all-time highs, at a much faster rate than many of its peers. It remains to be seen whether all this growth is also supported by a robust cash position.
As HEXO stock continues to grow its footprint, this is a great time for these cheap stocks to buy now at a share price with plenty of long-term potential.
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2. NorthWest Healthcare
NorthWest Healthcare Properties REIT (TSX:NWH.UN) skyrocketed in share price during the pandemic. This comes from the company’s diverse range of healthcare properties in spaces around the world. Even with the pandemic fuelling a lot of growth, investors can remain confident that there is more to come. And yet shares still trade at only $13 per share as of writing.
COVID-19 and the subsequent investment into healthcare properties had a large impact on the company’s balance sheet. So too did inflation or lack thereof. The company boasts a 97% occupancy rate and an average lease agreement of about 14.5 years! The company continues to diversify by expanding into further countries. This was supported recently by a $2.6 billion acquisition of the Australian Unity Healthcare Property Trust.
Over the next decade, it’s likely that NorthWest will continue to see massive investment from both private and government institutions. We don’t want to see another pandemic like this again, and hospitals and other healthcare facilities have to modernize and adapt. As this happens, it’s likely that NorthWest will see an increase in opportunities and investment as well.
The company is also attractive for dividend seekers. The stock yields a healthy 6.14% dividend yield as of writing. It also trades at an incredible 9.8 times earnings, making it one of the most absurdly cheap stocks to buy now. This combination makes it a superior buy for long-term investors seeking growth and income.
You'll wish you had bought these stocks a decade from 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 Amy Legate-Wolfe owns shares of HEXO Corp. and NORTHWEST HEALTHCARE PPTYS REIT UNITS. The Motley Fool recommends HEXO Corp. and NORTHWEST HEALTHCARE PPTYS REIT UNITS.