September is closing in, and instead of a much-anticipated correction, we could be in for continued upside, as more investors finally put their money to work in the bargains that remain. In this piece, we’ll have a look at three Canadian stocks that have already suffered nasty declines and are in a spot to make up for lost time going into the autumn season.
Canadian value stocks on sale
Without further ado, consider Badger Infrastructure Solutions (TSX:BDGI), Cineplex (TSX:CGX), and Suncor Energy (TSX:SU)(NYSE:SU): three unloved names that seem too cheap for their own good heading into September of 2021.
Badger Infrastructure Solutions
Badger Infrastructure Solutions, formerly known as Badger Daylighting, has had an underwhelming year, with the stock now fresh off a nearly 30% correction on the back of some less-than-stellar earnings results. Margins haven’t gone in the direction that Badger had hoped. COVID-19 pressures continue to weigh, and the soil excavator can’t seem to catch any breaks.
Today, the Canadian stock is a few percentage points off its 52-week low. It’s one that I think contrarians have to buy, as the company has a lot of room to make up in the second half. The environment looks more favourable, and recent quarterly concerns may prove to be more temporary in nature.
As infrastructure spending increases in the early innings of the economic expansion, I think it’ll be tough to keep Badger down. The business of mobile soil excavation is a dirty business, but somebody has to do it! The stock trades at 2.3 times sales and is one of the best mid-cap bargains on the TSX these days. If you can handle the volatility, I think the risk/reward tradeoff looks absolutely terrific this September 2021.
Cineplex has been under considerable pressure for nearly five years now. It’s been quite the fall from grace, but I think the tides are about to turn for the better. Everything bad that could have happened for the cherished movie theatre and entertainment company has pretty much already happened. A pandemic is pretty much the worst exogenous event that could have happened!
With more vaccines going into arms, I think the COVID-19 pandemic is positioned to go endemic. While the coronavirus won’t be eradicated for years, if not decades, I think that it will be better manageable such that a return to normalcy will not be jeopardized.
What does that mean for Cineplex stock?
I think the bottom is in. With its new CinePass subscription service, which offers an incredible value proposition to movie fans, I think investors are heavily discounting the firm’s long-term recovery prospects.
Finally, we have Suncor Energy, a quality integrated energy company that doesn’t get any respect these days.
The longer oil stays elevated, the more room the firm will have to run and the more upside its dividend and share price. With the valuation gap widening between Suncor stock and its peers, I think contrarians with strong stomachs have a lot to gain with Suncor’s risk/reward tradeoff here. The Canadian stock trades at a modest discount to book value and is well equipped to make a run past its 2020 highs again, perhaps within the next 18 months.
Oil can be tough to invest in. But if you want deep value, Suncor is one of the better horses to bet on these days.
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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends CINEPLEX INC.