3 Cheap TSX Stocks You’ll Regret Not Adding to Your TFSA

These growth stocks are poised to deliver stellar returns. Moreover, they have lost substantial value, providing an opportunity for TFSA investors to buy them cheap.

| More on:
TFSA and coins

Image source: Getty Images

Most top TSX stocks have lost a notable portion of their value amid the recent selloff. While macro uncertainty could keep the equity market volatile, now is an excellent time for investors to add stocks to their TFSA (Tax-Free Savings Account) portfolio and eventually benefit from the price recovery. Against this backdrop, here are three stocks you’ll regret not adding to your TFSA portfolio at current price levels. 

Aritzia

Aritzia (TSX:ATZ) stock has grown at a CAGR (compound annual growth rate) of 38% in three years. Its market-beating returns came on the back of its stellar financial performances. Notably, Aritzia’s top line has grown at a CAGR of 19% since 2018. Thanks to the solid sales and operating leverage, its adjusted net income grew at a CAGR of 24% during the same period. 

While Aritzia continues to perform well, its stock corrected about 23% from the 52-week high amid the recent selling in the market. This pullback is a buying opportunity for TFSA investors. Aritzia’s strategy of boutique expansion will continue to support its growth. The new boutiques support its revenue and profitability and drive brand awareness. It has identified 100 locations in the U.S. market, implying it has a significant runway to grow. 

Aritzia’s investments in e-commerce, geographic expansion, and product expansion could drive its organic sales. Meanwhile, tight expense management and pricing/mix will likely support its bottom line.

WELL Health

WELL Health (TSX:WELL) took the spotlight amid the pandemic. Its offers digital healthcare services that witnessed stellar demand amid COVID restrictions. Thanks to the stellar demand, WELL Health stock skyrocketed. However, economic reopening weighed heavily on this stock, erasing a significant portion of its value. However, what attracts is that the company continues to produce amazing growth, despite tough year-over-year comparisons and the easing of pandemic restrictions. 

For instance, this fiscal year, WELL Health’s top line surged 395% and 127% year over year in the first and second quarter, respectively. What’s more? WELL Health has delivered positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the past several quarters. Also, it turned profitable on the net income front. 

Thanks to the ongoing momentum in its business, and solid omnichannel patient visits, WELL Health raised its 2022 financial outlook thrice this year, which is encouraging. Its strong organic sales, focus on acquisitions, and strength in the U.S.-based virtual patient services businesses augur well for growth. 

BlackBerry

Down over 50%, BlackBerry (TSX:BB)(NYSE:BB) stock is worth investing in at current levels. BlackBerry’s IoT (Internet of Things) and cybersecurity businesses continue to generate strong revenues, despite challenges from the weak macro environment. 

Thanks to the strong demand, BlackBerry expects to deliver solid sales growth over the next five years. It expects its total revenues to grow at a CAGR of 13% through 2027. The ongoing digital shift, higher enterprise spending on cybersecurity, and automation and electrification of vehicles will support BlackBerry’s revenues.

Sales improvement, productivity savings, customer wins, and a growing addressable market indicate that this tech stock could deliver above-average returns in the coming years. TFSA investors could use the pullback in BlackBerry stock to capitalize on the recovery in its price. 

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ARITZIA INC. The Motley Fool has a disclosure policy.

More on Investing

Daffodils in bloom
Tech Stocks

2 Best “Magnificent Seven” Stocks to Buy in April

Two surging mega-cap tech stocks are the best buys among the “Magnificent Seven” this April.

Read more »

A golden egg in a nest
Stocks for Beginners

Got $5,000? 5 Stocks to Buy for Lasting Wealth

Got $5,000 to build a long-term compounding stock portfolio? Here are five top Canadian stocks to building lasting lifetime wealth.

Read more »

Businessman looking at a red arrow crashing through the floor
Dividend Stocks

BCE’s Stock Price Has Fallen to its 10-Year Low of $44: How Low Can it Go?

BCE stock price has dipped 39% in two years and shows no signs of growth in the next few months.…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Invest $10,000 in This Dividend Stock for $3,974.80 in Passive Income

This dividend stock gives you far more passive income than just from dividends alone, so consider it if you want…

Read more »

Payday ringed on a calendar
Dividend Stocks

This 6% Dividend Stock Pays Cash Every Month

Can a 6% dividend yield help you build a monthly retirement income? An investment made right can help you build…

Read more »

Payday ringed on a calendar
Dividend Stocks

Passive Income: How Much Should You Invest to Earn $1,000 Every Month?

These three monthly-paying dividend stocks can help you earn a monthly passive income of $1,000.

Read more »

clock time
Tech Stocks

Up 47%, Is it Time to Buy Payfare Stock?

Payfare (TSX:PAY) stock has been rising higher in the last six months after dropping significantly since 2021. Is it time…

Read more »

Dividend Stocks

3 Dividend Stocks to Double Up on Right Now

Some of these dividend stocks will take longer to recover than others, but they'll certainly pay you to stick around.

Read more »