It’s not necessary to always invest in pick mega-cap stocks to get handsome returns. Even if you buy some cheap stocks with a good fundamental outlook and hold them for the long term, they could help you generate extraordinary returns. Here’s a list of five of the best TSX stocks to buy today — currently trading under $10 per share.
Sandstorm Gold stock
Sandstorm Gold (TSX: SSL)(NYSE: SAND) is a gold royalty company that primarily provides financing to gold mining companies. At its current market price of $9.56 per share, it has a market cap of $1.9 billion.
Last year, Sandstorm Gold’s adjusted earnings rose by nearly 33% to $0.08 per share. Its adjusted net profit margin also expanded significantly in 2020 to about 17.9% compared to 12% a year ago. As the demand for gold remains strong, its earnings and profit margin are likely to improve further in the coming years. Overall, Sandstorm Gold stock could be a great buy for long-term investors looking for exposure to gold-related assets.
Celestica stock
Celestica (TSX: CLS)(NYSE: CLS) is a North York-based electronics manufacturing services provider with its shares trading at $9.35. Its large client list includes businesses from many industries, including communications, industrial, energy, defence, and aerospace.
While the ongoing trend in Celestica’s financials — especially revenues — might not be very impressive, the trend is likely to improve in the coming years, as the demand for its services continues to rise. Considering its healthy future earnings-growth potential, its stock could be trading at a bargain right now.
Centerra Gold stock
Centerra Gold (TSX: CG) stock is currently trading at $9.59 per share, with about a 35% year-to-date drop after rallying in a previous couple of years. In recent years, Centerra Gold has demonstrated its ability to post extraordinary earnings growth. In 2020, the company’s adjusted earnings more than doubled to US$1.55 per share.
In May 2021, the company’s largest gold mine in the Kyrgyz Republic was temporarily seized by the country’s government after some controversies. This could be the main reason why its stock has shed more than 30% this year. Nonetheless, Centerra Gold is now pursuing arbitration against the government to resolve the issues as soon as possible.
Given its solid earnings and revenue growth trend in recent years, Centerra Gold’s stock looks cheap for long-term investors, despite its ongoing legal battle to gain the control back of its largest gold mine.
ARC Resources stock
ARC Resources (TSX: ARX) is a Calgary-based based energy firm with its main focus on the production of crude oil, condensate, and natural gas. After surging by 63% this year, its stock is currently trading at $9.77 per share with a market cap of about $7 billion. The company has been consistently beating analysts’ consensus earnings estimates by a wide margin for the last couple of quarters.
In April this year, ARC Resources completed its merger with low supply-cost energy producer Seven Generations Energy. The merger is likely to give a big boost to ARC’s overall financials. Analysts expect its 2021 revenue to be more than double from the pre-pandemic (2019) levels. While its stock has staged a big rally this year, it still might have much more upside potential, as its financial trend has just started significantly improving.
Alamos Gold stock
Alamos Gold (TSX: AGI)(NYSE: AGI) is a Canadian intermediate gold producer with a market cap of about $4 billion. Its stock has lost nearly 9% in 2021, as it trades at $9.82 per share.
The company’s revenue growth consistently improved in the last couple of years — from 4.8% in 2019 to 9.5% in 2020. Similarly, its profit margins are also rapidly expanding. Alamos Gold’s earnings are expected to rise by nearly 39% in 2021. Overall, its consistently improving earnings growth, solid revenues, and reliable business model make its stock worth buying right now.
