Savvy investors know that when there is uncertainty in the stock market and many TSX stocks are cheap, it’s an incredible opportunity to buy stocks that you can own for years.
Apparently, the tendency for most investors is to buy the cheapest stocks possible. In fact, there’s actually more potential for gains by buying higher-quality stocks that are still cheap but likely offer less of a discount.
When you buy a mediocre stock that’s significantly undervalued, you have the potential to earn big gains as it recovers in value along with the market.
However, when you buy one of the top stocks on the TSX while it’s cheap, not only does it have recovery potential, but it also offers years of growth potential. And with the power of compound interest, the gains that these stocks offer are astronomical compared to a lower-quality company that may offer a better discount in the short term.
So with that in mind, if you’re looking for cheap TSX stocks to buy now that can help make you rich, here are two of the top companies to consider.
This top TSX growth stock is unbelievably cheap
One of the top TSX stocks you’ll want to consider adding to your portfolio while it’s still so cheap is goeasy (TSX:GSY), the specialty finance stock.
goeasy’s stock price has plummeted over the last year and a half, despite the company continuing to perform well. With all the headwinds the economy is facing, investors are worried about how goeasy and its mostly sub-prime borrowers could be impacted.
Furthermore, following the Canadian government’s recent release of its proposed federal budget and the suggestion that interest rates could be capped, goeasy’s growth could potentially slow down if it has to reduce its loans to the highest risk borrowers.
Nevertheless, with goeasy trading more than 55% off its all-time high and at a forward price-to-earnings ratio of just 6.8 times, it’s one of the top TSX stocks to buy now while it’s so cheap.
goeasy has been one of the top growth stocks in Canada over the last five years. The lender has increased its revenue by 108% over that stretch and its normalized earnings per share by over 288%.
Furthermore, while it does lend to higher-risk borrowers, goeasy has done a tremendous job minimizing its loan book risk and keeping the loan it needs to charge off within its target range.
Therefore, while investors have the opportunity to buy this top TSX stock at such a cheap price, it’s certainly one of the best companies to consider adding to your portfolio today and holding for years to come.
This high-quality Canadian stock has already started to rally
Another top TSX stock that has the potential to make investors rich and you can still buy while it’s cheap is WELL Health Technologies (TSX:WELL).
However, while WELL Health Technologies is still cheap today, it has been rallying significantly since the start of the year. This momentum makes it a stock you’ll want to consider adding to your portfolio soon.
WELL stock has gained over 70% so far year to date. Yet, even at this price, it still only trades at a price-to-sales ratio of 1.7 times. For comparison, its three-year average is 5.4 times
Therefore, WELL is one of the top stocks to buy on the TSX while it’s still this cheap, especially considering all the growth potential it offers in the coming years.
Ever since it has gone public, it has continued to exceed analyst expectations. In addition to having a tonne of organic growth potential, WELL has proven time and again that it can make value-accretive acquisitions.
As WELL stock is trading undervalued and expected to grow its sales by almost 20% again this year, in addition to improving its profitability, it’s one of the top investments to consider adding to your portfolio today and holding for the long term.