4 Value Stocks for Superior Returns in 2023

Four Canadian stocks trading below their intrinsic values are buying opportunities for investors chasing after superior returns in 2023.

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Investors have different financial goals and risk-tolerance levels, although value investing takes precedence during bear markets and economic recessions. Today, four value stocks trade below their intrinsic, or “real,” values, and you can buy one or all for superior returns in 2023.

Supply chain management  

Kinaxis (TSX:KXS) has made its name in supply chain management (SCM) since entering the scene in 1984. Its platform, RapidResponse, helps companies and organizations optimize their supply chains, increase efficiency, reduce costs, and be more competitive.

This $4.6 billion provider of cloud-based subscription software for supply chain operations collaborates with clients in real time. Besides North America, Kinaxis has customers in Asia and Europe. In the nine months that ended September 30, 2022, profit grew exponentially (+557%) year over year to US$11.51 million. Based on market analysts’ forecasts, the current share price is $165.95 (+9.24% year to date).

Excellent value proposition

Another entity with an excellent value proposition and a perfect complement to Kinaxis is Jamieson Wellness (TSX:JWEL). This $1.5 billion company manufactures and sells natural health products and boasts a strong branded business globally. According to management, Jamieson aligned with Kinaxis to counter volatility and accelerate its supply chain transformation. Last year marked 100 years of operation.

Jamieson strengthened its growth pillar in China by acquiring the assets of its distribution partner. Its president and chief executive officer (CEO) Mike Pilato said the Chinese market offers exciting growth opportunities, and its performance continues to outpace the industry average.

Market analysts recommend a buy rating for JWEL with a high 12-month price target of $50 (+39%). The consumer defensive stock trades at $36.04 (+2.71% year to date). Your overall return should be higher if you include the 1.89% dividend.

Resilient demand

Eric Martel, the CEO Bombardier Inc. (TSX:BBD.B), said the $5.68 billion manufacturer and seller of business aircraft and related structural components is starting to generate cash. In the fourth quarter of 2022, total revenue and net income rose 50% and 1% year over year to US$2.65 billion and US$241 million. It also reduced its long-term debt by 41% to US$4.1 billion during the quarter.

According to Martel, demand remains resilient, despite economic headwinds. Bombardier expects business jets delivery in 2023 to increase by 12% to 138 jets versus 2022. Moreover, Bombardier’s extensive network of aftermarket and support facilities is growing.

As of this writing, the industrial stock trades at $60.09 per share (+14.96% year to date). Market analysts’ 12-month average and high price targets are $71.57 (+19%) and $96.92 (+61%).

Flying under the radar

Kolibri Global Energy (TSX:KEI) flies under the radar, but at $6.19 per share, investors are up 55.53% year to date. This $220.46 million energy company exploits energy projects in the United States, mainly oil and gas, including clean, sustainable energy. The Tishomingo Field in Oklahoma is its high-quality asset.

The price of this small-cap stock could soar further if the top and bottom lines continue to rise. After three quarters in 2022, revenue and cash flow from operating activities increased 163% and 255% year over year to US$35.92 million and US$15.94 million. Notably, the net income was US$13.8 million compared to the US$1.33 million net loss from a year ago.  

For value seekers

The financials of the Canadian companies in focus are relatively solid. Moreover, the price targets of market analysts suggest they are ideal for value seekers because of their strong upside.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Kinaxis. The Motley Fool has a disclosure policy.

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