2 Cheap Stocks in Canada to Buy in February 2022

These two cheap stocks in Canada have seen a correction lately, making their stocks look attractive to buy now.

| More on:
value for money

Image source: Getty Images

The stock market continues to go through a roller-coaster ride in 2022 after posting strong gains last year. While the TSX Composite Index inched up by 21.7% in 2021, the benchmark hasn’t seen any notable change this year so far from last year’s closing level. On the positive side, the recent market correction has made many fundamentally strong stocks look cheap to buy right now. In this article, I’ll highlight two such cheap stocks in Canada that I find worth buying in February 2022.

Celestica stock

Celestica (TSX:CLS)(NYSE:CLS) is a North York, Ontario-based company with its main focus on providing supply chain solutions and hardware platforms to its clients. The company currently has a market cap of about $2 billion and a current market price of $15.03 per share. After rising by 37.3% last year, its stock hasn’t seen much appreciation this year.

In the December quarter, Celestica reported a nearly 70% increase in its adjusted earnings to US$0.44 per share with the help of a 9% year-over-year rise in its total revenue. Moreover, its earnings for the quarter also managed to beat analysts’ expectations by a good margin. Despite the dynamic macro environment, its consistent financial growth and the strong operating margin could help its stock rally in the near term. Celestica reported its strong Q4 results in the final week of January. But its stock has dived by nearly 6% in February so far, making this cheap stock look even more attractive.

Interfor stock

Interfor (TSX:IFP) could be another great cheap stock to buy right now in Canada. It’s a Vancouver-based lumber provider with a market cap of about $2.2 billion. In 2020 and 2021, its share price saw a sharp rally due to a consistent improvement in the demand for its products. After yielding solid 82% positive returns in 2021, IFP stock has seen 8.3% value erosion in 2022 so far.

In Q4 2021, Interfor posted $1.29 per share in adjusted earnings — slightly better than Street analysts’ expectations. During the quarter, its revenue of $676 million rose by 2% a year ago but missed analysts’ estimates. This could be one of the reasons why IFP stock has seen a correction lately. In the December quarter, its total lumber production increased by about 27 million board feet sequentially while lumber prices continued to strengthen. These factors drove the company’s total revenue up by a solid 51% in 2021.

Interfor expects lumber demand to remain strong over the mid-term, especially in the North American market. At the same time, the company also continues to focus on maintaining a diversified portfolio of operations in multiple geographical markets to keep its risks low.

Overall, its consistently increasing lumber production and strong demand could help the company report handsome financial growth in the coming quarters. These factors make this cheap stock in Canada worth buying on the dip. At the time of writing, Interfor stock was trading at $36.75 per share.

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.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Stocks for Beginners

Stocks for Beginners

5 Canadian Stocks to Hold in Your TFSA For Decades

The TFSA is the perfect place to compound wealth over decades. Don't pay any tax on these top five growth…

Read more »

An airplane on a runway
Stocks for Beginners

Where Will Air Canada Stock Be in 3 Years?

Here’s why I wouldn’t be surprised if Air Canada (TSX:AC) stock more than doubles in value in the next few…

Read more »

clock time
Stocks for Beginners

Is It Too Late to Buy Dollarama Stock?

Dollarama stock (TSX:DOL) is up a whopping 48% in the last year, but growth is slowing for this great low-cost…

Read more »

Oil pumps against sunset
Energy Stocks

Lower Loonie? This Sector’s a Gusher Anyway

If the Canadian dollar weakens, this one industry is set to make enormous profits, and investors can get in on…

Read more »

Stocks for Beginners

3 No-Brainer Stocks to Buy Under $13

These three stocks are cheap and easy buys if you want some quick wins in the next while. Just make…

Read more »

Hands shaking over a business deal
Tech Stocks

Meet the Growth Stock I Can’t Stop Buying This Year

Topicus stock (TSXV:TOI) has been a top growth stock this year, with strong finances, a stable acquisition strategy, and more…

Read more »

Stocks for Beginners

Up Over 25% After Earnings! Is Canada Goose Stock a Good Buy Now?

These important fundamental factors could help Canada Goose (TSX:GOOS) stock continue soaring in the long term.

Read more »

A bull outlined against a field
Stocks for Beginners

Bull Market Buys: 3 Magnificent Stocks to Own for the Long Run

These three stocks should be some of the first to bounce back in a bull market, which makes now a…

Read more »