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

stock analysis

Buy the Dip: 2 Stocks to Buy Today and Hold for the Next 5 Years

These Canadian stocks are trading at discounted valuations, providing an opportunity for buying the dip.

Read more »

bulb idea thinking

Safety in Size? 2 of the Bluest Blue-Chip Stocks I’d Buy Now

TC Energy (TSX:TRP) and another cash cow have huge dividend yields for safe investors.

Read more »

A cannabis plant grows.
Cannabis Stocks

Can Aurora Cannabis Stock Recover in 2024?

Aurora Cannabis stock is down 99% from all-time highs but remains a high-risk bet, despite its cheap valuation.

Read more »

Question marks in a pile
Dividend Stocks

Where Will Brookfield Infrastructure Partners Stock Be in 5 Years?

Brookfield Infrastructure Partners (TSX:BIP.UN) kicked off 2024 with a bang. Where will it be in five years?

Read more »

TFSA and coins

TFSA Investors: 3 Incredible Stocks for 2024

Are you looking for stocks to buy and hold for years for your TFSA? These three stocks could deliver exceptional…

Read more »

A person looks at data on a screen
Stocks for Beginners

3 Warren Buffett Stocks to Hold Forever

Warren Buffett sold some shares in Apple (NASDAQ:AAPL), and the market had questions.

Read more »

Dividend Stocks

Golden Years Gain: Your CPP Benefits at Age 70

CPP users delaying pension payments until 70 will receive substantial monthly income streams in the golden years.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

3 Dividend Stocks You Can Safely Hold for Decades

Top TSX dividend stocks are on sale.

Read more »