As markets have sold off this year, naturally, different stocks and industries have outperformed and underperformed at different times. This is crucial to recognize, especially if you’re looking to buy the stocks that offer the best value right now.
At first, growth stocks were selling off, but now, many stocks can’t get much cheaper. Lately, we’ve begun to see safer, more resilient stocks selling off.
The key to ensuring you’re buying the best stocks is to look at each company’s earnings, how vulnerable they are to the current environment, and how the company can perform in the next few years. You also, of course, want to look at the valuation.
With that in mind, if you’re looking for some of the top stocks to buy in July 2022, here are two of the best.
A high-quality growth stock with a proven track record of success
There are many Canadian stocks that are cheap. But one of the largest and most unbelievable discounts you can find today is with goeasy (TSX: GSY), an incredible Canadian growth stock that’s increased its profitability rapidly in recent years. Therefore, after the massive selloff goeasy has seen in 2022 leading up to July, it’s certainly one of the best stocks to buy now.
goeasy is a specialty finance company that predominantly lends money to consumers with below-prime credit ratings. The increased risk of these borrowers allows goeasy to charge a higher interest rate. And as long as it can manage to keep its underperforming loans low, which it has done consistently for years, then goeasy has the potential to earn massive returns.
After years of incredible growth already, though, the stock is still only worth roughly $1.6 billion, giving it a tonne of room to continue growing rapidly. Furthermore, it has ambitions to continue growing and expanding its business over the coming years, especially in industries such as auto loans.
So, the fact that one of the best growth stocks you can buy is down over 50% from its high as we begin July, it’s clear that goeasy is one of the best stocks to put on your watchlist.
In just the last three years, goeasy has managed to increase its earnings by over 150%. In addition, it’s increased its dividend payments by 194% over that span.
Therefore, with goeasy trading at the lowest level that it’s been in over three years (besides briefly at the start of the pandemic) and now offering a dividend yield of roughly 3.7%, it’s undoubtedly one of the best stocks to buy in July.
This long-term tech stock is one of the best value stocks you can buy in July 2022
In addition to goeasy, one of the few Canadian stocks that might actually be cheaper is AcuityAds Holdings (TSX:AT)(NASDAQ:ATY). AcuityAds is one of the best stocks to buy in July, because it’s a growth stock with significant long-term potential, but it also trades dirt cheap in today’s market.
The reason that AcuityAds is so cheap is that it’s been out of favour for a few reasons all year long. Firstly, its business — specifically, its new propriety platform illumin — has taken longer than expected to grow sales from new advertisers.
However, in addition, with a potential recession on the horizon, many investors and analysts are worried about the impact that it will have on advertising spending going forward. Therefore, stocks like AcuityAds have been out of favour going all the way back to 2021.
With the stock trading around $3, though, this is roughly as cheap as AcuityAds should get. First off, at this price, AcuityAds has a market cap of just $180 million and trades at a forward price-to-earnings ratio of 14.5 times. That’s considerably cheap for a high-potential growth stock.
However, what’s even more noticeable is that AcuityAds has a significant cash position. Therefore, its enterprise value (EV) is even lower at just $90 million. Thus, AcuityAds is trading at a forward EV to EBITDA of just 4.4 times, which is extremely cheap.
Therefore, if you’re looking for a high-potential tech company to buy undervalued, AcuityAds is so cheap that it has little downside risk and is easily one of the best stocks to buy in July.
