Many TSX stocks have sold off significantly this year as surging inflation impacts the economy, and a recession next year seems likelier each day. Few stocks have escaped the sell-off. Although a handful of stocks, in particular, have lost tonnes of value. And no matter how cheap they get, they continue to sell off.
These market environments are certainly full of risk. But they can also offer significant opportunities that the market is missing.
So if you’re looking for incredible deals to consider now, they’re on offer. Here are three TSX stocks that are unbelievably cheap and ideal for investors with long investing timelines and higher risk tolerances.
A Canadian media stock offering a dividend yield of over 10%
Corus Entertainment (TSX: CJR.B) is one of the most undervalued stocks on the TSX today. The media company owns television channels, radio stations, and a content production studio in addition to streaming services.
Corus is set to release earnings on Friday, an event many will watch closely. Back in September, the company warned it was seeing a notable impact on advertising sales as the economic environment worsened.
This spooked investors, and the stock has lost 35% since the September 9 announcement. In total, this year, it’s down roughly 50%. Furthermore, as a result of this sell-off, its dividend yield has skyrocketed to over 10%. In many cases, the market would see a red flag and risk of the stock being trimmed.
But Corus’ financials support a different outlook. CJR would have to take a substantial hit to revenue for the dividend to come under pressure.
And considering the stock has been earning so much free cash flow recently, allowing it to pay down debt and buy back stock; it’s much more likely Corus would slow its buybacks before it trimmed its dividend.
According to the average of seven analysts, Corus is expected to report quarterly sales on Friday that are down just 4.8% year over year. That’s obviously not ideal, but it also shouldn’t cause the stock to be trading at just 4.3 times its forward earnings and offering a yield above 10%.
Therefore, while it’s ultra-cheap, it’s one of the top TSX stocks to consider for your portfolio.
A top Canadian wine maker
Andrew Peller Ltd (TSX: ADW.A) is another stock that’s fallen out of favour with the market. ADW.A is down over 30% year to date and over 35% in the last 12 months.
The company produces, distributes, and retails wine and several other alcoholic beverages across the country. The wine retailer enjoys significant market share in the domestic space.
Throughout the last 12 months, the stock has faced higher costs due to inflation, while sales have pulled back slightly after an increase during the pandemic. This has caused its profitability to fall significantly. The issues it faces, though, notably higher costs, are short-term problems.
So while this TSX stock is out of favour and trading so cheaply, it’s one of the best stocks to buy and hold for the long haul.
Alcohol is considered a consumer staple since sales aren’t typically impacted in recessions. Furthermore, Andrew Peller offers numerous products for cost-conscious consumers. The low-cost wines could help it see an increase in sales through a recession if consumers are looking to save money.
A top tech stock with significant growth potential
If you’re looking to buy out-of-favour stocks that you can get at a massive discount on, many tech stocks are worth consideration. However, one of the cheapest tech stocks to buy is Lightspeed Commerce (TSX: LSPD)(NYSE: LSPD). Lightspeed provides point-of-sale solutions to companies mainly in the restaurant and retail industries.
The stock has sold off significantly for several reasons, including a short report last year. High-growth tech stocks have come crashing down in 2022. Lightspeed’s business faces uncertainty in a high inflation environment.
However, management has said that Lightspeed’s diverse portfolio of clients is helping it to mitigate impacts from the current economic environment. This should alleviate some of the investors’ short-term concerns. But the stock is also worth an investment primarily for its long-term potential.
Therefore, while Lightspeed trades at just 2.1 times its forward sales, below its three-year average of 14.6 times, it’s one of the top TSX stocks to buy today.
