3 of the Best Stocks to Buy After Last Week’s Selloff

After many Canadian stocks fell rapidly in price last week, here are three of the best to buy to take advantage of these massive discounts.

| More on:
A worker uses a laptop inside a restaurant.

Source: Getty Images

Last week, we saw markets continue 2022’s significant selloff, with the TSX falling by over 5% in just five days. Many Canadian stocks were already cheap heading into last week, so after more downside pressure, plenty of the best Canadian stocks are worth a buy at these valuations.

The TSX is now down roughly 13% so far year to date. And south of the border, the S&P 500 entered bear market territory and is now down by roughly 23% year to date.

With so much turmoil in markets and many stocks losing value rapidly, this may seem like the time to sell. However, the best thing to do is the complete opposite.

With so many stocks, particularly high-quality stocks, that are now trading at such significant bargains, now is an excellent time to buy stocks as long-term investments.

So, if you’re keeping a long-term mindset and looking to take advantage of this significant opportunity, here are three of the best stocks to buy now.

One of the best financial stocks to buy for long-term growth

One of the best Canadian stocks to buy in recent years for its growth, and now one of the best to buy today for its value, is goeasy (TSX:GSY).

goeasy has sold off significantly this year. It began to recover through the summer but is now trading more than 50% off its high again. This creates a significant opportunity for investors to buy one of the best Canadian stocks while it’s dirt cheap.

The stock’s operations do face some pressure in the current economic environment. But goeasy has proved for years what a high-quality company it is and what a resilient loan book it’s built.

Furthermore, it’s been one of Canada’s most impressive growth stocks. In the five years from 2016 to the end of 2021, the stock more than doubled its revenue and increased its normalized earnings per share by over 335%. Therefore, it’s no surprise that during that stretch, goeasy investors saw a total return of more than 735% or a compounded annual growth rate of more than 52%.

So, while this high-quality growth stock has pulled back from its highs, it’s certainly one of the best Canadian stocks you can buy for the long haul.

A top defensive growth stock

Another unbelievable growth stock that’s proven what a high-quality stock it can be is Jamieson Wellness (TSX:JWEL). Yet even after continuing to post strong results each quarter and making an acquisition earlier this year that gives it significant growth potential, Jamieson continues to trade roughly 20% off its 52-week high.

That may not be as significant of a deal as goeasy, but for such a resilient and defensive stock like Jamieson, it’s certainly one of the best Canadian stocks to buy today.

Typically, safer stocks grow at a slower rate. However, although Jamieson is highly resilient, it’s grown its sales over the last five years by roughly 82%. Furthermore, it’s expected to grow its sales by more than 23% this year and next year, even with all the economic turmoil we’re seeing.

So, with Jamieson now trading at a forward enterprise value (EV) to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio of just 10.8 times, which is much lower than its three-year average of 16 times, it’s one of the best Canadian stocks to buy after last week’s selloff.

One of the hottest stocks of 2022

Dollarama (TSX:DOL) has been one of the few stocks that’s seen a positive impact on business from the economic environment in 2022. Its sales have been growing faster than expected, as there is more demand for its discounted goods. The stock has performed so well that while the TSX has lost over 13% this year, Dollarama’s stock has gained roughly 20%.

However, even recently, it too has begun to fall in price, and in last week’s selloff, Dollarama fell by more than 3%.

This gives investors the opportunity to buy one of the best stocks in this environment while it trades off its highs. Dollarama’s positive impact on business is not surprising to see in a high-inflation environment. Plus, it could also benefit if we see a recession.

So, if you’re looking to buy one of the best Canadian stocks for this environment, Dollarama is worth considering.

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 Daniel Da Costa has positions in goeasy Ltd. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

how to save money
Investing

Could This Undervalued Canadian Stock Be Your Ticket to Millionaire Status?

Not every millionaire-maker stock is a consistent grower. Some are temporary but substantial bullish opportunities that you can ride to…

Read more »

Confused person shrugging
Dividend Stocks

Passive Income: How Much Do You Need to Invest to Make $625 Per Month?

This retirement passive-income stock proves why investors need to always take into consideration not just dividends but returns as well.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Secure Your Future: 3 Safe Canadian Dividend Stocks to Anchor Your Portfolio Long Term

Here are three of the safest Canadian dividend stocks you can consider adding to your portfolio right now to secure…

Read more »

money goes up and down in balance
Dividend Stocks

Is Fiera Capital Stock a Buy for its 8.6% Dividend Yield?

Down almost 40% from all-time highs, Fiera Capital stock offers you a tasty dividend yield right now. Is the TSX…

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Wednesday, December 11

In addition to the U.S. inflation report, the Bank of Canada’s interest rate decision and press conference will remain on…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How to Use Your TFSA to Double Your TFSA Contribution

If you're looking to double up that TFSA contribution, there is one dividend stock I would certainly look to in…

Read more »

Income and growth financial chart
Investing

A Top-Performing U.S. Stock That Canadian Investors Really Should Own

Amazon (NASDAQ:AMZN) is starting to run faster in the AI race, making it a top U.S. pick for 2025.

Read more »

Person uses a tablet in a blurred warehouse as background
Tech Stocks

2 Canadian AI Stocks Poised for Significant Gains

Here are two top AI stocks long-term investors may want to consider before the end of the year.

Read more »