The TSX today is full of opportunities, especially during today’s market correction. It’s created a situation where Motley Fool investors and others are increasingly worried about what the immediate future holds. However, if you’re a long-term investor, you should be seeing today as an opportunity. While others are selling their stocks, you should be seeking out opportunities for long-term holds. Today, I’m going to offer you three cheap stocks to buy during the market correction. Each is so undervalued based on future performance, you practically can’t afford not to buy them.
CP stock
Investors aren’t sure of what to make of Canadian Pacific Railway (TSX: CP)(NYSE: CP). However, this company is set to explode, and not just for long-term investors. The purchase of Kansas City Southern Railway is huge for the company. It will provide US$1 billion in synergies in the next three years and a vast pipeline of oil, gas and agriculture routes in the near term. CP stock has practically doubled its tracks from the purchase and is now the largest rail line in North America, stretching from Canada to Mexico.
Analysts believe CP stock is a strong long-term buy, and today’s market correction makes it one of the best cheap stocks to buy on the TSX today. It has a P/E ratio of just 17.44 as of writing, with shares down about 2% during the pullback. However, analysts believe in the next year it could rise by a whopping 268%! And right now, it’s just shy of being oversold, with a relative strength index (RSI) of 36. So, I would buy CP stock while it remains so cheap.
NFI stock
NFI Group (TSX: NFI) recently provided an update, and due to supply chain issues, the outlook isn’t great. Not this year at least. The pandemic led to a series of disruptions, and NFI stock believes it now won’t meet its original annual guidance for 2021. However, NFI stock remains confident its medium-term goals can still be met.
But NFI stock is a strong long-term option, especially for those looking to get in on the electric vehicle sector. It’s transitioning its heavy-duty and bus lines to electric, and that will create significant revenue in the years to come. Yet right now, it remains significantly oversold with an RSI of just 24.64. Down 17% on the TSX today as of writing, this is a strong buy for those seeking a long-term hold for decades to come.
Methanex
Motley Fool investors seeking cheap stocks due for a huge boost should consider Methanex (TSX: MX)(NASDAQ: MEOH) as well. Analysts recently boosted their recommendations to sector outperform, thanks to a variety of factors. Short-term availability for methanol has sent prices upwards, and marginal costs to operate have sent production rates down. Add to that the buyback announcement last week, and investors have one of the best cheap stocks to buy on the TSX today.
Shares of Methanex are up 63% in the last year and 41% in the last month. Yet it remains a strong deal based on several factors. First, it offers a solid price-to-book ratio of 2.3 and EV/EBITDA of 8.2. Then, it has a strong potential upside of 36% as of writing! Given the strong year analysts believe it will have, and the steal from fundamentals, it’s one of the cheap stocks Motley Fool investors can’t afford to not consider.
Lithium Americas
If you’re wanting to get in on clean energy stocks, what you really want to consider are batteries. Lithium companies around the world are feeding into companies looking for massive methods of storing energy. Yet because of the market pullback, companies like Lithium Americas (TSX: LAC)(NYSE: LAC) are down significantly.
In fact, Lithium Americas is down 11% as of writing due to the pullback, despite being one of the top-performing companies on the TSX today. It’s only likely because it soared last week from the news, so investors are looking to get their returns. Shares are up 90% in the last year, and it offers a P/B ratio of 4.8. So, that makes it a strong stock to consider for a long-term hold.
