3 Incredibly Cheap Canadian Growth Stocks to Buy Today

Canadian growth stocks are cheaper than they have been in a long time. Here are three stocks that are incredible bargains today!

| More on:
Growth from coins

Image source: Getty Images

It has been an incredibly challenging time for Canadian growth stock investors. Many of Canada’s best-known growth stocks have been slaughtered. The market is worried about declining growth, rising interest rates, and elevated valuations (especially for technology stocks).  

The recent pullback has created some incredible opportunities, especially in non-technology growth stocks. Investor sentiment is very low, and the market is wracked with worry. Short-term-minded investors are selling their best-quality growth stocks for cash, and prices keep getting cheaper.

Shrewd investors that can think long term can pick up some of these great stocks at fire-sale prices. Here are three high-quality Canadian growth stocks that look incredibly cheap today.

WSP Global: A discounted Canadian growth stock

WSP Global (TSX:WSP) is one of the world’s largest consulting, engineering, and design firms across the globe. Even after its recent 26% decline, this Canadian stock has produced a 644% total return over the past decade. That is a 22% compounded annual return!

WSP just produced very strong first-quarter 2022 earnings. Net revenues, adjusted EBITDA, and adjusted net earnings grew year over year by 26%, 34.7%, and 44.8%, respectively. These are incredibly strong numbers, despite the supposedly poor economic outlook for the world.

Today, this Canadian stock trades for 23 times earnings. It is not the cheapest stock, but that is down from 32 times earnings only a few months ago. Given that earnings are accelerating, the pullback presents very attractive long-term value for shareholders today.

Top Canadian growth stocks to buy today

goeasy: A cheap financial stock

If you are looking for a very cheap Canadian growth stock, you don’t find much better than goeasy (TSX:GSY). This stock is down 37% in the year. It pays a very attractive 3.2% dividend and trades for only nine times earnings today.

Many may not know it, but this Canadian stock is one of the best-performing stocks on the TSX over the past decade. It is up 1,890% over the past decade! That is a 34.8% compounded annual return. It just reported first-quarter results in 2022. Loan growth was strong, credit quality was improving, and adjusted earnings per share grew by a high-teens rate.

Yet one analyst noted that the stock is trading only just above “liquidation value.” Clearly, the market is pricing a worst-case scenario, creating a great opportunity for long-term investors to buy the stock.

Hardwoods Distribution: A high-growth Canadian stock on sale

The cheapest stock on this list is Hardwoods Distribution (TSX:HDI). Not many people know of this stock. Yet it is one of the largest distributors of architectural building supplies in North America.

Despite a recent 25% decline, this Canadian stock has still delivered a 929% return over the past decade. It has grown by consolidating both large and small building products distributors. Over the past five years, it has grown both EBITDA and earnings per share by a 35% average compounded rate.

Despite its great track record, this stock only trades for 5.5 times earnings. You’d think something might be wrong with its business. Yet it just delivered a record quarter, where adjusted EBITDA and profit per share both increased 200%. That is largely due to some recent major acquisitions, but the company continues to perform very well.

The Foolish bottom line

The market is freaking out, but there are plenty of bargains out there. If investors consider operational results over stock prices, there are plenty of investment gems to be found. Be patient and think long term, and you could stand to earn a fortune from today’s ugly stock markets.

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.

Fool contributor Robin Brown has positions in HARDWOODS DISTRIBUTION INC, WSP GLOBAL INC, and goeasy Ltd. The Motley Fool recommends HARDWOODS DISTRIBUTION INC and WSP GLOBAL INC.

More on Stocks for Beginners

little girl in pilot costume playing and dreaming of flying over the sky
Stocks for Beginners

TFSA Investors: 3 Steps to Get Into Cross-Border Investing

Overseas trading can be scary. But if you follow these steps, you can certainly achieve far higher returns than just…

Read more »

question marks written reminders tickets
Dividend Stocks

Up 10% in a Month, Is Loblaw Stock a Buy?

Loblaw stock (TSX:L) has seen a strong increase in share price in the last month, but could more be on…

Read more »

Canadian Dollars
Stocks for Beginners

2 of the Best TSX Stocks to Invest $1,000 in Right Now 

Are you looking to invest $1,000 in growth stocks that can give you double-digit growth? Consider these stocks ahead of…

Read more »

edit Colleagues chat over ketchup chips
Stocks for Beginners

3 Oversold Stocks to Buy Before They Bounce Back

These oversold stocks offer a huge return for investors willing to buy now and hold on tight and gain a…

Read more »

Car, EV, electric vehicle
Stocks for Beginners

Up 17% in the Last Month, Is Stantec Stock a Buy Today?

Stantec stock (TSX:STN) has been rising higher and higher from huge announcements, and more good news looks like it's on…

Read more »

Money growing in soil , Business success concept.
Stocks for Beginners

3 Growth Stocks About to Take Off

These three growth stocks surged by double digits in the last month, but more is planned for the future, so…

Read more »

Value for money
Dividend Stocks

3 Top Canadian Value Stocks in December 2023

These three value stocks offer immense growth and dividend opportunities as we return to normal in the next year.

Read more »

Canadian Dollars
Stocks for Beginners

Where to Invest $1,000 in December 2023

If you have $1,000 and you're a little nervous about parting with it, you can't go wrong with these two…

Read more »