It’s tough to find TSX stocks that fit all your criteria as the broader markets continue their consistent march toward new highs.
Of course, you’ll need to insist on paying less to get more with undervalued stocks, which tend to be unsexy or highly underrated at a given instance. But for many beginners with limited sums of capital to deploy in stocks, it also makes sense to look to the names with low dollar amounts.
With low- to no-commission trading, it’s become more justifiable to put an extra $100 or so to work immediately, rather than waiting for it to reach a level such that commissions would account for 1% or less of the value of shares to be purchased.
Without further ado, let’s look at two TSX stocks under $10 that also look severely undervalued at this market crossroads.
Fire & Flower Holdings: A top TSX stock under $1
At under a buck per share, Fire & Flower Holdings (TSX: FAF) is a compelling way to play the crowded cannabis retail scene. Undoubtedly, legal weed has paved the way for pot shops appearing down the street from almost every inner-city street it seems. The space is crowded and the barriers to entry are starting to fall.
What does Fire & Flower, a publicly traded near-$2 billion firm, have that other mom-and-pop pot shops don’t? Deep pockets, retail expertise, a top-notch digital presence, a powerful brand, and most importantly, a mutually beneficial relationship with convenience store kingpin Alimentation Couche-Tard. Couche-Tard has been slowly exercising warrants to up its stake in the pot shop.
Moving ahead, the Couche-Flower mutually beneficial partnership and co-location projects should pay massive dividends. And count me as unsurprised if Fire & Flower starts applying some serious pressure to the mom-and-pop shops that lack Flower’s distinct advantages.
Couche-Tard knows how to pressure mom-and-pop retailers like few others in the space. And I do think Fire & Flower is well-positioned to become a dominant force in Canada’s pot retail scene, even if it does end up standing on Couche-Tard’s shoulders.
StorageVault Canada: The best TSXV Exchange stock out there?
StorageVault Canada (TSXV:SVI) trades at just shy of $5 and is one of the best Canadian stocks on the TSX Venture Exchange in my books. I view the company as a “REIT for your stuff” in a less mature Canadian self-storage market that’s expected to heat up steadily over the next several years.
With the “Roaring 20s” upon us, the demand for “stuff,” especially discretionary items that people don’t have the space to store is likely to skyrocket. Moreover, as I’ve noted in prior pieces, the pandemic-induced move to the suburb trend could reverse in a big way once people are asked to come back to the office come September and October.
Undoubtedly, a hybrid-work environment is likely the future. But with remote workers worried about being passed up for promotions and raises at the hands of their attentive coworkers, I suspect people will be downsizing and heading right back to the inner cities as the pandemic winds down and ends.
Yes, self-storage is boring. But the secular trends and growth runway are very real. As such, Canadian investors would be wise to place their bets on the under-$10 stock as momentum picks up.
