3 Cheap Canadian Stocks to Buy Right Now

If you’re looking to retire early, you’ll want to consider buying these cheap Canadian stocks for substantial price gains potential.

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

The Canadian stock market trades near its all-time high, but there are still plenty of cheap Canadian stocks you can buy right now. Here are a few top stock ideas you can investigate further.

Air Canada stock

The airline industry was already unfairly impacted by COVID-19. Now, higher oil prices, with the WTI oil price hovering around US$110 per barrel, are probably what triggered the latest dip in Air Canada (TSX:AC) stock.

Be reassured that Air Canada has started recovering. In the latest quarter, AC stock reported $2.7 billion of revenues, which are three times the revenues generated in the quarter about six months prior. Additionally, it reported a gross profit of $82 million, which was much better than a loss of -$754 million a couple of quarters ago.

It looks like the normalization of the business could take at least a year or two. At least, AC stock seems to be getting some support from the $20 level, which is right about where it rebounded from in the last few days. Analysts currently have a consensus 12-month price target of $29.97 for AC stock, which represents near-term upside potential of about 43%. Longer term, perhaps over the next three to five years, AC stock could revisit the $40 range to double patient investors’ money from current levels.

Brookfield Business Partners stock

Brookfield Business Partners (TSX:BBU.UN)(NYSE:BBU) stock also looks cheap. The growth stock has corrected more than 20% from its 52-week high, which is a good entry point to get a position going.

Jason Mann talked about BBU stock on BNN in September 2020. The following comments are still relevant today:

“They’re effectively a private equity firm. They look to generate a 15% return on their portfolio of energy, infrastructure and power… You want to own this long term. It has a good balance sheet, and it trades at a reasonable price.”

Jason Mann, chief investment officer at EHP Funds

Brookfield Business aims to own and operate quality businesses that provide essential products and services. Because it buys and sells businesses (after it has improved their operations), its earnings will be bumpy. Therefore, the adjusted EBITDA, a cash flow proxy, is a better metric to gauge its business performance. Its 2021 adjusted EBITDA climbed 27% year over year to US$1,761 million.

The analyst consensus 12-month price target suggests there’s about 36% near-term upside in the growth stock, which also yields 0.6%.

Linamar stock

This week, Bruce Murray just picked Linamar (TSX:LNR) as one of his top stock picks on BNN. It’s a good entry point indeed after the recent correction of more than a third! Linamar also yields 1.5%. Here are Murray’s thoughts:

“I don’t see why the stock has come down so much. It’s mispriced. They make automotive products. Linamar is gaining market share in a business that faces a huge recovery. The chip shortage will go away. There’s fear that European production will be down because of Russia. Due to the excess capacity in the Russian/European manufacturers, that can be replaced quickly. It’s a great company. I think you can double your money by next year easily.”

Bruce Murray, CEO of The Murray Wealth Group

Bottom line

These three stocks could deliver strong price appreciation over the next three to five years, but beware: they will also come with above-average volatility. So, consider setting a range for your long-term sell price target to have your eyes set for substantial gains prospects.

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 recommends LINAMAR CORP. Fool contributor Kay Ng has no position in any of the stocks mentioned.

More on Investing

edit Four girl friends withdrawing money from credit card at ATM
Bank Stocks

Should You Buy Canadian Bank Stocks in the Face of a Potential Recession?

Royal Bank of Canada (TSX:RY)(NYSE:RY) stock a is a great blue-chip name that investors should not hesitate to buy on…

Read more »

analyze data
Metals and Mining Stocks

3 Under-the-Radar Commodity Stocks to Buy

Three commodity stocks are likely to break out soon if inventories in metals markets continue to decline or demand outpaces…

Read more »

Oil pumps against sunset
Energy Stocks

Is it a Good Time to Buy in the Energy Sector?

Boosted by a very bullish supply/demand environment, energy stocks like Canadian Natural Resources and Tourmaline have much further to go.

Read more »


2 Stocks to Buy Offering Better Value Than Air Canada

Air Canada has been a popular stock for years, but despite its low price, these two picks are much better…

Read more »

money cash dividends

How to Make $373/Month in Passive Income With These 2 TSX Stocks

You could bring in passive income of $4,482 annually, or $373 per month!

Read more »

clock time
Stocks for Beginners

3 Stocks to Start Investing Today

Looking for a set of stocks to start investing today? Here are some great options that offer growth and income…

Read more »

investment research
Dividend Stocks

Young Investors: Create Cash Flow With This Top Dividend Stock

If you're a young investor looking for cash flow, you need a strong dividend stock and solid banking program designed…

Read more »

Illustration of bull and bear

Is the Stock Market Selloff Over?

Throughout this week, many stocks have been gaining value and rebounding from their lows. So, is the stock market selloff…

Read more »