Right now is a great time for Motley Fool investors to consider oversold stocks. There are a lot out there, to be sure, but many that could also turn your Tax-Free Savings Account (TFSA) into a million-dollar portfolio.
What it comes down to is finding the right oversold stocks that fit within your long-term TFSA goals. Today, I’m going to cover three of these oversold stocks on the TSX today — ones that are bound to come back after the market downturn is over and bring your returns up along with them.
CIBC
A strong long-term hold should pretty much always include a Big Six bank, and among the oversold options I would consider Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM). The Canadian bank has overhauled its image as of late, offering more customer service and getting into emerging markets. And yet, it remains oversold at 29.47 on the relative strength index (RSI).
Shares of CIBC stock are down 14% year to date as of writing, trading at 8.7 times earnings. So, you can now lock in a substantial dividend yield of 5.22%, the highest per share of the Big Six banks. That makes it a no brainer if you’re looking for long-term income that pays you simply to hold the stock. Furthermore, it’s grown 175% in the last decade, a compound annual growth rate (CAGR) of 10.62%. So, this would certainly be one of the oversold stocks that could make you a millionaire in the next decade.
Nutrien
The storms have calmed around Nutrien (TSX: NTR)(NYSE: NTR) after Motley Fool investors became excited among oversold stocks within the nutrient industry. The Ukraine crisis left those buying low-cost potash from Russia searching for new options. As the largest producer of crop nutrients in the world, Nutrien stock became the new focus.
But with the market dropping, Nutrien stock fell from grace. It now trades at 29.42 on the RSI. But nothing fundamental has changed about the company. It’s still a necessary company in an essential industry for those seeking long-term income. Shares are down 24% in the last few months but still up 1.5% year to date. Furthermore, it trades at 9.8 times earnings and offers a 2.01% dividend yield.
ONEX
Finally, ONEX (TSX: ONEX) is the last of the oversold stocks I’d consider for your long-term millionaire portfolio. Onex is great because it focuses on acquisitions for anything with revenues above $300 million. It has investments in everything from tech and aerospace to healthcare and industrials. You can get it all from the investor, which gives you a globalized, diversified portfolio.
Yet right now, it’s one of the oversold stocks trading at 28.17 on the RSI. Shares are down 37% year-to-date, making it now trade at just 3.8 times earnings. While earnings are down this year, it’s expected to explode by 2023, as the economy returns to normal. And long-term investors will be thrilled to hear it’s grown 236% in the last two decades — a CAGR of 6.24%. Nothing extraordinary but certainly stable. So, you could increase your returns four times over in the next 20 years.
Bottom line
These three oversold stocks offer a great opportunity for Motley Fool investors today. Each provides you with a history of returns and a strong future for it as well. If you want a million-dollar account, these three stocks are certainly the ones to get you there.
