The S&P/TSX Composite Index fell five points on Thursday, February 23. Some of the worst-performing sectors included base metals, financials, and telecoms. Despite this, the market has shown some good signs in the late winter. Today, I want to target three TSX stocks that are too cheap to pass up on in the final days of February. Let’s jump in.
This auto parts manufacturing giant just sent off a buy signal
Magna International (TSX: MG) is an Aurora-based company that designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufactures of vehicles and light trucks around the world. Shares of this TSX stock have dropped 21% year over year as of close on February 23. Magna suffered a steep drop following its recent earnings release, as we can see in the interactive price chart below.
This company unveiled its fourth-quarter (Q4) and full year fiscal 2022 earnings on February 10. In Q4 2022, Magna delivered sales growth of 5% to $9.6 billion while adjusted diluted earnings per share fell to $0.91 compared to $1.30 in the fourth quarter of fiscal 2021. For the full year, Magna posted total sales of $37.8 billion — up from $36.2 billion in the previous year. Management expects to see improved sales on the back of a global increase in light vehicle production.
Shares of Magna last had a price-to-earnings (P/E) ratio of 26, which puts it in more favourable value territory compared to its industry peers. Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. This stock possesses an RSI of 35, putting Magna just outside of technically oversold territory.
Here’s a green energy stock that looks undervalued right now
Northland Power (TSX: NPI) is a Toronto-based independent power producer that develops, builds, owns, and operates clean and green power projects in North America and around the world. This green energy stock has dropped 12% in the year-over-year period. Most of those losses have occurred in the new year.
The company released its last batch of fiscal 2022 results yesterday on February 23. Sales rose to $2.44 billion for the full year — up from $2.09 billion in the prior year. Meanwhile, gross profit increased to $2.17 billion compared to $1.87 billion for the full year in fiscal 2021. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. Northland posted adjusted EBITDA of $1.39 billion in fiscal 2022 — up from $1.13 billion in the previous year.
What makes this green energy stock cheap right now? Its shares possess an attractive P/E ratio of 11. Moreover, Northland Power last had an RSI of 24, putting it well into oversold levels. Better yet, this TSX stock also offers a monthly dividend of $0.10 per share. That represents a 3.6% yield.
One more cheap stock to snatch up today
Trisura Group (TSX: TSU) is the third and final cheap TSX stock I’d look to snatch up in the final days of February. This Toronto-based specialty insurance company operates in the surety, risk solutions, corporate insurance, and reinsurance businesses in Canada, the United States, and worldwide. Its shares have plunged 24% so far in 2023.
Investors can expect to see this company’s final batch of fiscal 2022 results sometime in the weeks again. In the first three quarters of fiscal 2022, Trisura delivered net income of $65.0 million compared with $52.3 million in the year-to-date period in fiscal 2021. Moreover, adjusted diluted earnings per share was reported at $1.37 — up from $1.16 for the same stretch in the prior year.
This cheap stock last had a solid P/E ratio of 20. Its shares possess an RSI of 21, putting it deep in technically oversold territory at the time of this writing.
