Buy the Dip: 2 Insanely Cheap Growth Stocks to Buy Today!

Many Canadian growth stocks are looking insanely cheap today. Here are two stocks that have long histories of making investors rich.

| More on:
Hand writing Time for Action concept with red marker on transparent wipe board.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Growth stocks have been falling for months. It seems like the bad news and selling will never end. It is incredibly difficult to call a market bottom. However, what we can observe is that many Canadian growth stocks are becoming incredibly cheap.

Why does valuation matter?

While stock prices in many of Canada’s best-known growth stocks have declined, so have their valuation. By valuation, I am talking about the comparison of the stock price the market is willing to pay versus a stock’s current earnings power. Just six months ago, stock market sentiment was euphoric. The market did not seem to care about valuations.

Today, valuation and future earnings is all that the market cares about. In many instances, the stock market is pricing in a worst-case scenario for earnings, even if certain stocks are performing incredibly well. In essence, the market is throwing out the baby (great companies) with the bathwater (so-so or bad companies).

Fortunately, that creates wonderful opportunities for investors willing to do the work and find companies that the market is pricing wrong. Here are two top Canadian growth companies that look insanely cheap today.

Colliers International: A cheap growth stock that has been a long-term winner

Colliers International Group (TSX:CIGI)(NASDAQ:CIGI) has one of the best long-term track records on the TSX stock exchange. For more than 25 years, it has compounded total annual returns by a +15% rate. That is very impressive for such a long period of time.

The good news is its growth rate has actually been accelerating over the past few years. Colliers has been known as a commercial real estate broker. However, it has been expanding platforms in investment management, engineering, investment banking, and property management.

These platforms are driving strong internal growth and have ample acquisition opportunities. Today, this growth stock trades for only 15 times earnings and 10 times EBITDA. It hasn’t been this cheap since the March 2020 crash. For long-term growth at a very reasonable price, Colliers is a favourite stock to pick today.

2 ultra-cheap growth stocks to buy today

Brookfield Asset Management: A long-term compounder at a discount

Another growth stock with a unique focus on asset management is Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM). BAM has carved out a specialized asset management focus in hard assets and alternatives. It has become a global leader in infrastructure, renewables, real estate, and private equity investments.

Like Colliers, Brookfield has delivered 25 years of very solid 15% annual total returns. It has a contrarian investment approach. It can capitalize when economic and market environments take a downward turn. Brookfield buys up cheap assets, fixes them up, reaps their cash flows, and then sells them at the market peak again.

This downturn will likely be the same scenario. BAM is down 22% this year, and it trades at a steep discount to its intrinsic value. The company plans to spin-out its asset management business later this year. That could be a huge catalyst for this growth stock. Right now, is a perfect time to pick up shares in this high-quality business while they are still very cheap.

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 Brookfield Asset Management Inc. CL.A LV and COLLIERS INTERNATIONAL GROUP INC. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV and COLLIERS INTERNATIONAL GROUP INC.

More on Stocks for Beginners

potted green plant grows up in arrow shape
Stocks for Beginners

1 Canadian Growth Stock That Could Double Your Money in an Economic Recovery

The market downturn is an opportunity to lock growth during the economic recovery. This stock is a blend of value,…

Read more »

edit Safe pig, protect money
Stocks for Beginners

2 Safe TSX Stocks for Beginners to Buy in a Market Correction

These two TSX stocks are still solid long-term buys today, despite the recent market correction.

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Stocks for Beginners

3 Real Estate Stocks to Buy for Terrified Investors

Motley Fool investors shouldn't be afraid of investing in real estate if they have a long-term growth strategy, but these…

Read more »

Value for money
Stocks for Beginners

Market Correction: A New List of Value Stocks Just for You

The 2022 stock market has been bearish, with tech stocks being the biggest losers. But tables are turning. It's time…

Read more »

Knowledge concept with quote written on wooden blocks
Stocks for Beginners

3 Reasons Why Inflation Impacts Canadian Stocks

Here are the three most common ways inflation impacts Canadian stocks, why they're selling off, and when you'll want to…

Read more »

Growth from coins
Stocks for Beginners

2 Growth Stocks New Investors Can Buy on the Dip Today

After the recent market correction, many growth stocks look cheap, making it a perfect time for stock market beginners to…

Read more »

Make a choice, path to success, sign
Stocks for Beginners

3 Reasons Cineplex Stock Is a Better Buy Than Air Canada

Although both Air Canada and Cineplex stock are ultra-cheap, here's why the entertainment company is a much better investment.

Read more »

stock data
Stocks for Beginners

Where to Invest $5,000 Amid the Market Selloff

Can you afford to invest $5,000 in stocks right now? If yes, you must consider buying these dirt-cheap stocks amid…

Read more »