1 Top Value Stock to Buy After a Market Pullback

Alimentation Couche-Tard (TSX:ATD) is a wonderful retail stock that’s just too cheap to ignore after the recent TSX market pullback.

| More on:

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

The recent market pullback has been harder to buy. The broader markets have been weak and trending lower for nearly six months. That’s a lot of pain dealt out over a rather lengthy timespan. Indeed, many dip buyers have likely grown accustomed to quick V-shaped recoveries like the one enjoyed in the early innings of 2020. The quick recession and bounce back was unprecedented, and it all happened in a few months.

These days, it seems like the bear market is dragging on, with no V-shaped spike in sight. Indeed, the Fed is serious about stomping inflation. And they don’t seem to care as much about recent losses in markets. That’s concerning. A so-called Fed put may be off the cards. And that has many investors reeling, opting to ditch stocks today, with the intention of asking questions later.

The Fed still has many more hikes to serve up. And investors could face steeper losses in the months ahead. Regardless, any dovish pivot, no matter how modest, could send stock markets right back into rally mode. So, if you give into fear today, with expectations that nothing positive can happen, you could run the risk of having to buy all your stocks back at much higher prices later down the road.

Nobody can time the markets. However, when it seems absolutely reckless to be bullish while every talking head on TV is yelling to sell, we could be closer to a bottom than you think. In any case, one thing is guaranteed: we’re closer to a bottom than we were back in January! With that in mind, it makes it easier to scoop up value plays today, as they sink on the back of horrid macro news.

Currently, I’m a big fan of Alimentation Couche-Tard (TSX:ATD), one of the best retail plays that have real value in their share today.

Alimentation Couche-Tard

Couche-Tard is a profitable growth company that has a somewhat predictable earnings-growth stream. It’s a rare consumer staple on the TSX, but it’s a cheap one that U.S. investors may wish to consider, as the economy tilts into a recession.

Couche-Tard isn’t just a convenience store owner and operator. It’s a firm that’s ready to take the concept of convenience retail to the new age. With plenty of innovations going on behind the scenes, including frictionless payments, and margin-enhancing initiatives, the Couche-Tard-run stores of the future could be a heck of a lot more profitable than today. How? As electric vehicles (EVs) become the norm, consumers will spend more time at the convenience store. They’ll likely be willing to buy more and perhaps sit down and enjoy a coffee or hot meal.

Could the convenience store of the future include a restaurant and other intriguing grocery items? They could. In any case, Couche is more than ready to adapt. It’s making the right investments, and, in due time, they will pay off.

For now, the stock trades at a mere 15.9 times trailing earnings. That’s too cheap for such a competent earnings grower.

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 Joey Frenette has positions in Alimentation Couche-Tard Inc. The Motley Fool has positions in and recommends Alimentation Couche-Tard Inc.

More on Investing

data analyze research
Tech Stocks

1 Under-the-Radar TSX Stock to Buy in August

Are you hoping to pull a fast one on the market? Here’s one under-the-radar stock that you could take advantage…

Read more »

Target. Stand out from the crowd
Dividend Stocks

Have $1,000? 2 Stocks to Buy at the Real Estate Bottom

Many real estate stocks offer both dividends and decent growth potential. And if you grab them at a discount, you…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.

3 TSX Stocks That Are Perfect to Start Your Retirement Portfolio

Canadians building their retirement portfolios should target dependable TSX stocks like Suncor Energy Inc. (TSX:SU)(NYSE:SU) and others.

Read more »

Increasing yield
Dividend Stocks

3 High-Yield Dividend Stocks to Buy and Hold Forever

Young and old income investors can sleep easy by holding three high-yield dividend stocks for the long term, if not…

Read more »

Dividend Stocks

1 Under-the-Radar Dividend Stock to Buy for Monthly Passive Income

This dividend stock offers investors a whopping 9.02% dividend yield that's remained stable for over a decade.

Read more »

energy industry
Energy Stocks

Warren Buffett Is Going All-In on Oil: Should You?

Warren Buffett is buying oil stocks. In the past, he owned Canadian oil stocks like Suncor Energy (TSX:SU)(NYSE:SU).

Read more »

oil and natural gas
Dividend Stocks

Passive Income: 4 TSX Energy Stocks With Incredible Dividends

TSX energy stocks are gushing cash. Here are four top stocks to own for a combination passive income and capital…

Read more »


Restaurant Brands International Stock: My Favourite Dividend Bargain on the TSX

Restaurant Brands International (TSX:QSR)(NYSE:QSR) stock is a dividend juggernaut that's finally starting to get on the right track.

Read more »