The new Omicron variant of coronavirus has led to a sharp selloff in TSX stocks. While top Canadian stocks lost a considerable portion of their value, shares of Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD), Air Canada (TSX:AC), and WELL Health Technologies (TSX:WELL) hit new 52-week lows.
While I expect the stock market to remain volatile in the near term, the sharp decline in the prices of these TSX stocks represents an excellent opportunity for buying. However, you should take caution and only go long if you have a long-term mindset. Meanwhile, let’s look at these companies to know why one should be buying this dip.
Lightspeed
I see multiple growth vectors for Lightspeed, especially the growing penetration of its payments solutions. Lightspeed reported that its payments penetration rate continued to grow. However, it still represents only a small portion of its gross transaction volume, providing a solid long-term growth opportunity.
Lightspeed continues to expand in the existing market and targets new verticals and geographies. Meanwhile, an increased number of its customers are adopting multiple modules, driving its average revenue per user.
Looking ahead, its strategic acquisitions will likely bolster its growth through accelerating product roadmap, solidifying its competitive positioning in the high-growth market, and driving its customer base. Meanwhile, focus on innovation and new product launches like Lightspeed Capital provide an additional avenue for growth. Lightspeed stock has dropped nearly 66% from its peak and looks attractive at current price levels.
Air Canada
Air Canada stock benefited significantly from easing travel measures and recovery in its financial and operating capacity amid ongoing vaccination. However, the emergence of Omicron led to a sharp selloff in its stock in the recent past. Air Canada erased all of its gains and is trading near its 52-week low.
While the Omicron variant adds uncertainty, I am upbeat on Air Canada’s long-term prospects and see significant upside from current levels. I believe Air Canada’s revenue-diversification initiatives and focus on cost efficiency augurs well for growth. Meanwhile, its strong liquidity positions it well to navigate the ongoing crisis.
I expect Air Canada’s operating capacity and revenues to improve significantly in the medium term. Meanwhile, its operating losses are likely to go down. Air Canada will benefit significantly from the recovery in corporate demand and leisure travel. I am bullish on Air Canada and see this decline in price as a buying opportunity.
Well Health
WELL Health Technologies outperformed the broader markets by a significant margin in 2020 and generated sky-high returns for its investors. However, WELL Health lost a considerable portion of its value amid selling in telehealth stocks and has hit a new low of $5.03.
I am bullish on the telehealth sector and see this correction in WELL Health as a buying opportunity for long-term investors. The ongoing strength in its underlying business, multi-disciplinary telehealth offerings, and strategic acquisitions will likely drive its financials and market share.
Furthermore, its comprehensive omnichannel patient services offering and high recurring revenue base augur well for growth. WELL Health has delivered positive adjusted EBITDA in the last four consecutive quarters and remains on track to deliver profitable growth in the long run.
