4 Cheap Stocks I’d Buy Before the Market Erupts

Canadian and global markets have picked up steam, but I’m still looking to snag cheap stocks like goeasy Ltd. (TSX:GSY) and others.

| More on:
A worker gives a business presentation.

Source: Getty Images

The S&P/TSX Composite Index increased 31 points on Friday, February 24. Some of the worst-performing sectors included battery metals, base metals, information technology, and health care. Meanwhile, energy and financials, the largest weighted sectors on the TSX, finished the day in the black. Today, I want to zero in on four cheap stocks that I’d look to snatch up before this bull market kicks into high gear. Let’s dive in.

This cheap stock offers exposure to the insurance industry

Trisura Group (TSX:TSU) is a Toronto-based specialty insurance company that operates in the surety, risk solutions, corporate insurance, and reinsurance businesses in Canada, the United States, and around the world. Shares of this cheap stock have dropped marginally in the year-over-year period. Meanwhile, the stock has plunged 25% so far in 2023.

This company rescheduled its fourth quarter (Q4) and full-year fiscal 2022 earnings release earlier this month. We still do not know when the company plans to unveil its results. In Q3 2022, Trisura posted earnings per share (EPS) of $0.51 compared to $0.38 in the previous year. Meanwhile, net income increased 47% to $23.7 million. Adjusted diluted EPS jumped 9.8% to $0.45.

Shares of this stock possess a favourable price-to-earnings (P/E) ratio of 19. The Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. Trisura possesses an RSI of 20, putting it well in technically oversold territory.

Here’s a bank stock to target after its Q1 earnings release

Canadian Imperial Bank of Commerce (TSX:CM) is the fifth largest of the Big Six Canadian bank stocks. That said, CIBC is still a Canadian powerhouse that you can rely on for the long term. This bank stock has declined 21% in the year-over-year period as of close on February 24. Its shares have climbed 13% in the new year.

The bank released its Q1 fiscal 2023 earnings last Friday, February 24. It achieved total revenue growth of 8% year over year to $5.93 billion. Meanwhile, adjusted earnings per share blew passed expectations at $1.94. Moreover, adjusted pre-tax earnings increased 6% to $2.66 billion.

CIBC last had an attractive P/E ratio of 9.4. Better yet, it offers a quarterly dividend of $0.85 per share. That represents a strong 5.4% yield.

Magna is a cheap stock set to gain as vehicle production ramps up this decade

Magna International (TSX:MG) is an Aurora-based company that designs, engineers, manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks around the world. Its shares have dropped 22% from the prior year. Meanwhile, this cheap stock has declined 6.8% so far in 2023. Investors can see more with the interactive price chart below.

It posted its final batch of earnings in fiscal 2022. Magna achieved total sales of $37.8 billion — up from $36.2 billion in the previous year. Looking to 2023, the company is forecasting strong sales growth on the back of improved global light vehicle production.

Shares of Magna last had a P/E ratio of 26, putting it in favourable value territory compared to its industry peers. It last had an RSI of 34, putting it just outside of oversold levels.

One more undervalued and exciting stock I’d buy as the market improves

goeasy (TSX:GSY) is the fourth and final cheap stock I’d look to snag. This Mississauga-based company provides non-prime leasing and lending services under the easyhome, easyfinancial, and LendCare brands to consumers in Canada. Shares of goeasy have climbed 17% in the year-to-date period.

The company released its Q4 and full-year fiscal 2022 earnings on February 15. Its loan portfolio delivered growth of 38% to $2.79 billion. Meanwhile, adjusted annual diluted earnings per share climbed 11% to $10.43. This top TSX stock still possesses an attractive P/E ratio of 14. Moreover, goeasy is a Dividend Aristocrat that offers a quarterly distribution of $0.96 per share, which represents a 3% yield.

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 Ambrose O'Callaghan has positions in Goeasy. The Motley Fool has positions in and recommends Trisura Group. The Motley Fool recommends Magna International. The Motley Fool has a disclosure policy.

More on Investing

Question marks in a pile
Bank Stocks

Should You Buy Canadian Western Bank for its 4.8% Dividend Yield?

Down 35% from all-time highs, Canadian Western Bank offers a tasty dividend yield of 4.8%. Is the TSX bank stock…

Read more »

Gold bars
Metals and Mining Stocks

Why Alamos Gold Jumped 7% on Wednesday

Alamos (TSX:AGI) stock and Argonaut Gold (TSX:AR) surged after the companies announced a friendly acquisition for $325 million.

Read more »

tsx today
Stock Market

TSX Today: Why Record-Breaking Rally Could Extend on Thursday, March 28

The main TSX index closed above the 22,000 level for the first time yesterday and remains on track to post…

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »

clock time
Tech Stocks

Long-Term Investing: 3 Top Canadian Stocks You Can Buy for Under $20 a Share

These three under-$20 stocks offer excellent buying opportunities for long-term investors.

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »