Finding value in today’s market is the key goal of most long-term investors. However, given the nature of where valuations are today, finding top value stocks isn’t as easy as it once was.
That said, this recovery provides a few opportunities I think are too good to pass up. Here are two such value stocks I think need to be on investors’ radar right now.
Top value stocks: Alimentation Couche-Tard
Last year, the retail sector underwent a lot of turmoil. Indeed, Alimentation Couche-Tard (TSX:ATD.B) has not been spared from this carnage. Driving activity plummeted, as did the company’s gasoline and convenience store sales.
However, given Couche-Tard’s recent results, it appears things are turning around for this core Canadian company. This $55 billion player has recently hit new 52-week highs. For long-term investors, this is an indication things are moving in the right direction with Couche-Tard stock.
Indeed, I think there are signs that momentum is finally starting to pick up with Couche-Tard. Investors are starting to buy into the idea that this long-term growth company can return to its former status. And given the existing valuation of only 16 times earnings that investors must pay to acquire Couche-Tard stock, investors are able to pick up shares on the cheap today.
This ought to be the key focus for long-term investors seeking top-notch value stocks. Finding great growth companies at attractive valuations is likely going to be the key to long-term success. I think the line between “value” and “growth” has been blurred somewhat of late. Accordingly, companies with market-beating growth rates and attractive valuations are in the sweet spot right now. I consider Couche-Tard to be one of the best such opportunities in the market today.
Indeed, the insurance business isn’t necessarily a glamorous one. It’s a competitive, low-margin business filled with companies offering basically the same goods. Picking out the top value stocks of the bunch isn’t necessarily easy.
However, similar to Couche-Tard, I like Manulife’s growth trajectory. This is a company that isn’t only Canada’s leading insurance company. Rather, Manulife has morphed into a global player in this domain.
The company’s focus on targeting Asian markets for growth is somewhat unique among its peers. Manulife has continued to expand in Asia, at a time that I view as extremely advantageous to investors. I think the foreign concerns surrounding China are largely overblown, and Manulife stock could soar once the market comes to its senses.
Of course, that could take time. However, for now, Manulife remains one of the top value stocks on the TSX 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.