With the market up 20% in 2021 so far, it’s been a great year for anyone investing in TSX stocks. The S&P/TSX Composite Index largely trailed the U.S. market’s performance in 2020, but the two countries have put up comparable numbers this year.
The broader Canadian market may be trading at all-time highs, but there are lots of high-quality companies on sale. Growth stocks, in particular, have significantly cooled off in 2021 after a dominating performance last year. A renewed interest in value-oriented stocks this year has led to many growth stocks trailing the market’s returns in 2021.
If you’re investing for the long term, now may be a wise time to invest in a couple of TSX stocks trading at discounts. Short-term investors may be less inclined to do so, but if your time horizon is a decade or longer, I’d strongly suggest putting these three TSX stocks on your watch list this coming month.
TSX stock #1: Lightspeed Commerce
Shares of Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) are down more than 50% in barely two months.
The tech stock was first hit by a short report that contained serious allegations of management not accurately disclosing the performance of key metrics. Shares then slid again following the release of the company’s 2022 Q2 earnings in early November.
Even with the recent skid, the TSX stock has still largely outperformed the market since going public. Shares are up close to 300% since March 2019, which was when the company joined the TSX.
The tech company is coming off a quarter where year-over-year revenue growth was up nearly 200%. Losses came in higher than expected, which partly attributed to the TSX stock selling off.
Management continues to reinvest aggressively back into the business, which explains why losses are increasing. But as a current Lightspeed shareholder, reinvesting back into the business is exactly what I’m hoping to see.
Lightspeed’s product offering only continues to grow, increasing the total size of the company’s market opportunity. In addition to that, management has not been shy about acquiring companies to strengthen its international presence.
TSX stock #2: Absolute Software
Absolute Software (TSX:ABST)(NASDAQ:ABST) is another tech stock trading at a serious discount. Shares are down more than 20% year to date and close to 50% from all-time highs.
The TSX stock exploded following the COVID-19 market crash early last year. Shares more than doubled by the end of the year after bottoming out in late March 2020. After peaking in early 2021, though, it hasn’t been able to return to anywhere near all-time highs.
Absolute Software isn’t growing revenue at the same rate as Lightspeed. It is, however, valued much more reasonably. So, if you’re looking for a lower-risk tech stock with market-beating growth potential, that’s also trading at a discount, Absolute Software is a perfect choice.
TSX stock #3: Brookfield Renewable Partners
Last on my list is another discounted TSX stock that I’m also a shareholder of.
Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) is down just about 25% from all-time highs. Still, the renewable energy stock is up a market-crushing 125% over the past five years. And that’s not even including the company’s impressive 3% dividend yield.
Many leaders in the renewable energy space are trading at a discount today. The sector as a whole has trailed the market’s return this year, which is why now’s a very opportunistic time to increase your exposure to this growing sector.