2 Canadian Stocks That Are Simply Too Cheap to Avoid

These two Canadian stocks have sunk lower and lower, which is why now could be the right time for long-term investors to jump in.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published April 27, 2023 4:00 pm EDT

Alright, investors. The time has come. Certain Canadian stocks for some time now have been completely avoided and dumped by investors, and at the time for good reason.

But these Canadian stocks I’m about to cover have fallen enough. We get it, you don’t like them. But today, I’m going to tell you why you simply cannot avoid these cheap Canadian stocks for a moment longer.

Medicinal research is conducted on cannabis. — Source: Getty Images

Lithium Americas

Lithium Americas (TSX: LAC) is one of those companies that went through a major boom before busting last year. Investors were excited about clean energy companies, and lithium provided the power for batteries to operate those clean energy assets. However, a few problems led to this lithium supplier dropping in share price.

Lithium Americas stock holds three lithium production assets in Argentina and Nevada. It’s adding several new locations in both areas as well, which analysts expect will be up and running in the near future. But some issues came up during earnings that led to a drop in share price.

The company reported a loss of US$94 million during the quarter, yet analysts believe the company should return and breakeven in profits of US$88 million in 2023. The reason this could occur is there is a massive shift towards using lithium mines from Argentina, as Chile tightens production. Further, the company continues to export impressive amounts, surging past analyst estimates.

Further, with a new acquisition of Arena Minerals in Argentina, there is even more lithium coming into play. So trading at just $27 per share, analysts believe this company is incredibly undervalued. It continues to be a top lithium pick, with long-term lithium prices due to climb. Shares of Lithium Americas stock are down 17.5% in the last year among Canadian stocks.

Canopy Growth stock

I know, I know, cannabis stocks are so 2017. However, it might be time to consider Canopy Growth (TSX: WEED) once more. I’m not saying it’s going to be an easy climb, but with shares dropping down to incredibly low 52-week levels, there isn’t much more room to go but up.

In fact, the reason investors may want to consider Canopy Growth stock has nothing to do with marijuana at all. While the company should one day become the largest producer of cannabis in a country that should prove to be the largest consumer, that could be some time off. Meanwhile, it is shifting towards non-THC products for sales.

In fact, while cannabis sales take up about 50% of sales, non-THC products currently account for about 30%. Medical revenue should continue to increase, and higher prices should also help the company towards profits. So it’s actually the medical side as well as the non-THC products that should help fuel international growth and sales in the short term.

Yet it also cannot be ignored that long-term, the company has a lot going for it. Its acquisition of Acreage will certainly help as the United States shifts towards legalization. As the rest of the world does as well, there will certainly be room to run for Canopy Growth stock.

Shares of Canopy Growth stock are now at an absurdly low $1.80 per share as of writing. That’s a 74% decrease in the last year alone. So even a small investment could see your shares explode should investors hold long term.