There are a number of ways Motley Fool investors can look for undervalued stocks. It could be a pullback, fundamentals, or the promise of future growth, among other reasons. But if you’re looking for undervalued stocks on the TSX today, it’s becoming harder and harder to find them.
On the one hand, an economic recovery is a good thing for everyone. Though it does mean those seeking the growth of 2020 are simply going to be out of luck very soon. It’s becoming a volatile situation, where many believe they can buy up a meme stock and become an overnight millionaire.
But instead of risking your life savings, I would consider these four undervalued stocks on the TSX today instead. Each has strong fundamentals and promising future growth. And Motley Fool investors can buy it right now before you miss out on any more growth.
Forget the Big Six
The Big Six Banks are great, sure, but if you want superior growth you want to consider Canadian Western Bank (TSX:CWB) on the TSX today. The bank is rising on the back of stellar earnings, reporting EPS of $1.01, much higher than the $0.89 predicted by analysts. Meanwhile, it believes fees and the launch of an updated digital platform will continue to drive revenue through this year, and into 2022.
Yet despite share growth of 41% in the last year, analysts believe there is even more in the future, of about 13.5% as of writing by year’s end. Despite this, Motley Fool investors can pick up undervalued stocks like this one for a P/E ratio of just 10.76 as of writing! On top of that, you can add a dividend of 3.21%.
Higher and higher
Air Canada (TSX:AC) is a stock for Motley Fool investors who believe that patience is a virtue. But here’s the thing, this company is cheap now. It won’t be for long. It’s really the best time to buy as Air Canada stock isn’t likely to remain one of the undervalued stocks for much longer. With more vaccines underway, and holiday travel on the horizon, it looks like revenue will help increase the share price.
Air Canada stock has traded around $25 per share for a year. And yet investors have watched it closely during that entire time on the TSX today. But watching isn’t buying, and that means they’re missing out on the opportunity to buy now and watch it grow over the next few decades. Passengers will fly again. The pandemic will end. So be patient and see your shares of Air Canada stock soar.
Alimentation Couche-Tard (TSX:ATD.B)(TSX:ATD.A) is another strong company to consider when the pandemic ends. It continues to have a strong balance sheet, made stronger by its recent acquisitions. But here’s the best part: you should buy this stock this instant because earnings for the last quarter and future outlook are due tomorrow: Tuesday, August 31!
And despite reaching all-time highs recently, the company remains a steal with a P/E ratio of 16.69. While not value territory, it’s definitely not overvalued. With the pandemic coming to an end in the next year or so, this is one of the undervalued stocks set to soar in that time thanks to commuter and traveller traffic.
Analysts recently upgraded their estimates for H&R REIT (TSX:HR.UN) for Motley Fool investors. This came as the diversified real estate investment trust reported solid growth in the last quarter, along with the purchase of further properties valued at $1.67 billion. Analysts love that it has exposure to retail, apartments, and offices, and COVID-19 coming to an end will see growth in all areas.
Motley Fool investors can pick up one of the best-undervalued stocks at a P/E ratio of just 7.61 as of writing! Not only has it grown 66% in the last year alone, but analysts believe it has a future potential upside average of around 16% right now. That makes it one of the best-undervalued stocks you can buy on the TSX today, with little downside to boot.
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 Amy Legate-Wolfe owns shares of AIR CANADA. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC.