Oversold and Undervalued: 2 Canadian Stocks to Keep a Close Eye on

Jamieson Wellness (TSX:JWEL) and Cargojet (TSX:CJT) are promising mid-cap stocks that are oversold and incredibly cheap for value investors.

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Canadian stocks are doing a great job of holding their own relative to the S&P 500 over the past few weeks. Indeed, the hot start to January has led to a fairly weak second half of February. Indeed, negative commentary and headlines are back following a higher-than-expected U.S. inflation report for the month of January. There’s a fear that inflation could linger for longer, pushing back the “rate-cut” hopes by 2024, or perhaps later.

Indeed, worrying about month-to-month economic data is not good for your health or your wealth. In any given month, the numbers beat, miss, or hit a target. Constant beats and hits are just not realistic. Along the way, blips can be expected, and investors shouldn’t make too much of it, even if they spark a wave of negative short-term forecasts.

Oversold conditions: Undervalued gems are more abundant

After a few weeks of fading market sentiment, I think there are bargains to be had for the venturesome, and Foolish investors who are willing to defy the negative short-term market forecasts by buying the dip and hanging on for the long haul (think five years at minimum).

In this piece, we’ll have a look at two oversold Canadian stocks that seem to have been overpunished and are now trading at what I view as a great value.

Consider Jamieson Wellness (TSX:JWEL) and Cargojet (TSX:CJT), two TSX stocks that are down 11.1% and 7.7%, respectively, over the last week (past five trading sessions) alone. Indeed, both firms have their own company-specific headwinds, but the recent haze of gloom, I believe, has made the selling pressure that much worse.

Jamieson Wellness

Jamieson’s a vitamin maker with a 100-year-old brand that many Canadians are likely familiar with. It’s a high-quality brand that has the edge over various generic rivals in a fairly commoditized space. The rise of private-label goods, in particular, has been a major concern for the big-brand consumer-packaged goods players. Supplements and wellness products aren’t something consumers should skimp on. If one’s health is on the line, it often costs more to go with a cheaper generic.

In any case, Jamieson seems like a firm that can mostly resist the headwind of inflation. But it’s not immune. The stock slid last week, thanks in part to a tough fourth quarter. Earnings-per-share numbers came up a penny shy of the estimate. The results themselves weren’t terrible. Regardless, the multiple was quite high for the name going into the results.

After last week’s selloff, shares trade at a more palatable 26.3 times trailing price to earnings (P/E), which I think discounts the firm’s growth profile. Looking ahead, China is a market where Jamieson could really take its top line to the next level.

After the big dip, Jamieson stock looks like a very tempting defensive growth stock to buy in a recession year.


Cargojet is in an ugly bear market, with shares falling more than 3% on Monday’s session. The stock is off more than 50% from its all-time high hit in 2020. Though e-commerce isn’t booming like it once was, as consumers tighten their purse strings, I still view Cargojet as a terrific way to play the secular trend that may be closer to a recovery than many may think.

In any case, the stock’s trading for 7.3 times trailing P/E. With a $2.1 billion market cap and a sizeable moat (its aircraft fleet), I view Cargojet as a mid-cap stock that will fly high again. For now, shares seem to have grounded, but likely not for long.

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cargojet. The Motley Fool has a disclosure policy.

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