As volatility creeps back into the market, investors are becoming increasingly polarized. Aggressive investors see gains to be had in growth stocks and various speculative plays. Meme stock mania has once again picked up, as has options activity among various high-risk, high-reward plays. Value stocks have received far less attention.
However, for Foolish investors, the long-term investing approach looks a lot more like gardening than gambling. Planting seeds, weeding once in a while, and watching these trees grow is what Foolish investing looks like.
For those seeking stable and consistent long-term gains, there are a number of options today. However, I believe Alimentation Couche-Tard (TSX:ATD.B) and Kirkland Lake Gold (TSX:KL)(NYSE:KL) are two of the best.
Top value stocks: Alimentation Couche-Tard
Couche-Tard could be the biggest company many investors haven’t heard of. Indeed, with a market cap of nearly $50 billion, Couche-Tard is a big player. However, the company’s core business providing goods and services via its gas stations and convenience store chains isn’t that attractive to many investors.
Indeed, with the economy reopening from pandemic-related restrictions, I expect we’ll see strong demand for Couche-Tard’s offerings. We’ll all be driving more, and perhaps pop our heads into one of Couche-Tard’s convenience stores to pick up a cold drink. This reopening catalyst is so simple yet so powerful for Couche-Tard. Indeed, the company’s recent results over this past year have left a lot to be desired for many investors. And many appear to have walked away from this name.
That said, Couche-Tard is now trading at more than $45 per share, nearing its all-time high. There’s a reason for this, and there’s reason for this stock to potentially climb even higher.
Couche-Tard has gotten to this size via consolidating a fragmented industry. As the company picks up the pace with acquisitions, as I expect it will in the years to come, Couche-Tard’s growth trajectory should return to normal. Indeed, a lot of expectations in this area are already being factored in today.
In the gold mining space, Kirkland Lake could be the best stock on the market right now.
Well, this company’s operations are top notch. Kirkland Lake’s portfolio of high-grade mines in mining-friendly jurisdictions are about as good as it gets in the mining space. These mines have tonnes of potential for production growth over time, and Kirkland Lake has made this a part of the company’s strategy.
Accordingly, I expect cash flows to continue to grow this year and in the years to come. Currently, Kirkland Lake’s valuation doesn’t factor in a lot of growth. In fact, it appears many investors are bearish with respect to gold miners, reflecting negative sentiment on the price of gold.
I think the current inflationary trajectory of monetary policy, as well as a weakening U.S. dollar could bode well for gold and gold miners. Accordingly, I think the market is getting the assumptions wrong on this stock and the sector, broadly speaking.
Accordingly, Kirkland Lake is a top choice for investors who share this view. The company offers a juicy (and fast-growing) dividend yield around 2%, which is the cherry on top. Indeed, there’s a lot to like about this top value pick today.
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 stocks mentioned in this article. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC.