With the market selling off so significantly, there are tonnes of opportunities for investors. However, with so many stocks looking cheap, it can be difficult to find the best value stocks to buy — ones that are truly undervalued and haven’t been this cheap in years.
Looking at a stock’s chart can be helpful sometimes. However, in some instances, it can be deceiving. Furthermore, even if the stock’s chart is helpful, it’s important to confirm that stocks are undervalued in several other ways.
If you’re looking to find the best value stocks to buy after the significant selloff in stocks over the last few months, here are two that haven’t been this cheap in years.
Image source: Getty Images
One of the best-known Canadian companies to buy and hold for years
One of the very best stocks you can buy today, offering both value and tonnes of long-term growth potential, is Canadian Tire (TSX:CTC.A).
Canadian Tire’s business has been firing on all cylinders recently. It performed exceptionally well through the pandemic and continues to post impressive numbers, as the impacts of the pandemic fade.
Despite this top-notch performance, the stock hasn’t been rewarded by the market. And at its current price of just below $170 a share, Canadian Tire stock may not look that cheap, but in reality, its business hasn’t been this cheap in a long time.
Looking at the stock’s valuation on a forward price-to-earnings (P/E) basis, it’s clear why Canadian Tire is one of the best value stocks to buy.
It’s currently trading at a forward P/E of just 8.6 times. The only time it was cheaper in the last decade was briefly at the start of the pandemic. In fact, its 10-year average is approximately 13.1 times.
That’s not all, though. Canadian Tire also trades at a forward enterprise value (EV) to EBITDA ratio of just 8.1 times. Again, the only time it was cheaper was at the start of the pandemic, and its 10-year average is roughly 9.6 times.
Therefore, considering how well Canadian Tire has been performing lately, its plans for growth going forward, and the fact that it’s ultra-cheap, there’s no question it’s one of the best value stocks to buy now.
One of the best Canadian growth stocks to buy offering unbelievable value
In addition to Canadian Tire, another one of the best Canadian stocks to buy now, offering an attractive mix of value and growth is WELL Health Technologies (TSX:WELL).
WELL is another exciting stock that’s been performing admirably. It continues to meet and increase its guidance and has been expanding its operations with an attractive mix of acquisitions and organic growth.
Despite its performance, though, the valuations for earlier-stage growth stocks, especially tech stocks, have fallen significantly. Therefore, WELL’s stock has become extremely cheap.
Valuations are only going to stay this low temporarily, though. So, while these stocks are out of favour, it’s the best opportunity to buy them for dirt cheap.
And right now, WELL is trading at a forward EV-to-sales ratio of just three times — the cheapest it has ever been since it was upgraded to the TSX in January of 2020.
Right now, WELL stock is even cheaper than it was at the worst point of the initial pandemic selloff. And considering the company is in much better shape today and has tonnes of potential to continue growing, it’s easily one of the best value stocks to buy now.
