3 Surprising Stocks Trading Lower in 2023

Some of the weakest performers of 2023 (so far) may be powerful additions to your portfolio in the right market circumstances.

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The TSX has been fluctuating for the last 12 months. The post-pandemic bull market phase lasted till March 2022; since then, there have been multiple ups and downs. The trend has continued into 2023, and the bearish phase the market is going through right now has placed discount tags on a wide array of stocks. Three of these discounted stocks should be on your radar right now.

An automobile company

AutoCanada (TSX:ACQ) is an Edmonton-based company that runs 64 franchised dealerships in Canada and 18 in the United States. The company represents 25 brands in Canada alone and owns a collision repair centre chain. Its business is both geographically and operationally diversified, though it leans heavily on new car sales.

Even though the automotive brands it sells through its dealerships don’t include the North American EV giant (Tesla), the company can take advantage of the EV boom and cater to potential EV customers through the other brands it represents.

The stock has been going down for a while now and has fallen over 23% this year alone. This slump has also made its valuation more attractive, making it a potentially good buy for recovery-fueled growth.

An energy company

2023 has been a bad year for energy stocks in general, and Ovintiv (TSX:OVV) is no exception. The stock has already fallen over 25% in the year, and even though it started to go up in the last few days, the momentum may not last long, considering the weak energy sector.

The fall hasn’t been enough to push the value of the stock down to the pre-pandemic peak, and the stock is still trading at a 54% premium to that price point.

Still, the fall has been enough to push the yield up to 2.8%, and the stock has slipped further into the undervaluation territory. The price-to-earnings ratio right now is just 2.47. Even though the company is already reasonably discounted, it may be prudent to wait before you consider buying it.

The energy sector may still have a few dips left before it goes bullish for the long term, and you may be able to lock in an even more attractive yield with this stock.

An investment management company

Brookfield (TSX:BN) is one of Canada’s largest asset and investment management companies. It has an impressive portfolio of assets worth over $800 billion spread out over 30 countries. The company has a long and proud history of acting as an owner-operator for a wide array of assets stretching back a century.

But perhaps the strongest point in Brookfield’s favour is its choice of assets, which include renewable and infrastructure, reflecting the company’s long-term vision. It’s a powerful addition to virtually any portfolio and a good long-term holding and is currently trading at a 19% discount from its 2023 peak.

Foolish takeaway

The three discounted stocks are worth considering and not just for the short-term recovery potential. All three stocks might be worth holding on to for years, albeit for different reasons. Brookfield may offer consistent long-term growth, while Ovintiv offers healthy payouts. AutoCanada might reveal its true potential once the EV boom reaches its peak in Canada.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield, Brookfield Corporation, and Tesla. The Motley Fool has a disclosure policy.

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