As the equity markets are trading at all-time highs, investors might consider waiting for a pullback to purchase stocks and derive attractive returns. However, if you look closely, it might be possible to buy stocks trading at a lower valuation and well-positioned to stage a turnaround going forward.
Here, we look at three lower-priced stocks on the TSX that you can buy today.
Air Canada (TSX:AC) is the first stock on my list. The airline sector was among the worst hit due to COVID-19 sending AC stock from $52 per share at the start of 2020 to less than $10 in March last year. Air Canada stock is currently trading at $26.5, which is 50% below its record highs.
While the world is crawling towards normalcy and the rollout of vaccines continues to gain pace, travel numbers are unlikely to reach pre-COVID-19 levels anytime soon.
In Q1 of 2021, Air Canada confirmed it is losing $14 million each day from grounded flights, posting a loss of $1.274 billion in the March quarter. Comparatively, its EBITDA loss widened to $763 million compared to $71 million in the year-ago period, while operating revenue was down 80% for obvious reasons.
While Air Canada expects to double its seating capacity in Q2 year over year, it will still be 84% lower than the same period in 2019. However, pent-up travel demand and Air Canada’s robust liquidity position will help the company tide over an uncertain macro environment.
Canadian energy company Suncor (TSX:SU)(NYSE:SU) is coming off a difficult year as well. The ongoing pandemic shattered oil prices in 2020 as travel demand was negligible and economies were shut. However, rising oil prices in the last few months might result in an uptick in Suncor stock and other energy companies.
In 2020, Suncor reported a loss of $4.3 billion. However, impairment and other non-operating charges accounted for $2.2 billion of losses in the last year. Despite a volatile period, the Canadian energy heavyweight was able to generate $227 million in free cash flow in the last four quarters by focusing on cost efficiencies.
Suncor stock also provides investors with a tasty dividend yield of 2.9% and has already gained 44% in the first six months of 2021.
WELL Health Technologies
The final stock on my list is Canadian digital health giant WELL Health Technologies (TSX:WELL). While the pandemic negatively impacted Suncor and Air Canada, it acted as a tailwind for telehealth stocks including WELL Health.
Valued at a market cap of $1.7 billion. WELL stock has delivered mind-boggling returns to long-term shareholders and has risen close to 9,000% since its IPO in May 2016. Despite these market-thumping gains, WELL Health stock continues to trade at an attractive valuation and has gained massive traction south of the border due to accretive acquisitions including CRH Medical.
WELL Health sales stood at just $5.9 million in 2018 and its top line might expand to over $420 million in 2022. This will also allow the company to post a positive net income within the next 12 months.
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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.