There are some oversold stocks that simply do not belong in oversold territory. Therefore, these stocks are due to bounce back incredibly quickly — especially when we see these companies return to normal after an economic downturn.
Today, however, I’m going to look at three oversold stocks that are simply too good to ignore. So, let’s get right down to it.
The North West Company
First off, retail stocks certainly aren’t doing great, I’ll grant you. But there are certain places in Canada where retail locations don’t have as many options as elsewhere in Canada. That’s where The North West Company (TSX:NWC) sets up shop.
NWC stock will find these locations, usually in underserved urban communities, or rural areas, and put the necessary retail chains down. It provides essential products, everything from food to clothing for its customers.
However, shares recently plunged from earnings that fell below estimates. High inflation and interest rates have affected the company in these underserved areas quite severely. This led to a share drop of about 11% in a day.
Now, the stock is in oversold territory at just 28.25 on the Relative Strength Index (RSI). So, I would certainly consider this stock — especially while you can bring in a 3.94% dividend yield. Then sit back for when this stock eventually bounces back.
You see it on practically every label in the health section of practically every store. So, why is Jamieson Wellness (TSX:JWEL) in oversold territory right now? Well, same as NWC stock, JWEL stock is suffering from inflation and interest rates as well.
While the company managed to slightly beat out earnings estimates, this was on the back on two poor quarters, and estimates weren’t that great to begin with. I think investors were hoping for more of an improvement, and they simply did not see it.
Even so, JWEL stock has managed to stay within company guidance for 2023, and its Youtheory performance is supposed to continue to ramp up, with new products hitting in the second quarter. This should help fuel the $155 million revenue run rate by the fourth quarter, according to analysts.
JWEL stock is now in oversold territory at a 24.59 RSI as of writing. Again, the stock also offers a 2.3% dividend yield to bring in as well. With shares down 19% in the last year, I would certainly consider taking this time to pick up shares before a recovery.
Finally, we have TELUS (TSX:T), which underwent so much growth, only to now drop into oversold territory with the other oversold stocks these days. There is a combination of problems in this case, from the recent earnings performance to the merger between two large telecommunication companies.
Even so, TELUS stock remains one of the Big Three wireless companies in the country. It’s expanded throughout Canada, even during the pandemic, when it was able to expand its fibre-to-the-home network.
While the most recent quarter beat out earnings estimates, investors remain unimpressed. And with the upcoming merger still leaving investors unsure of the future of TELUS stock, it’s no wonder shares have fallen 17% in the last year.
TELUS is an oversold stock I would consider picking up at these incredible lows. TELUS stock may have risen fast in the last few years, but it fell even faster. Now could therefore be a good time to pick it up while it trades at just a 20.14 RSI, and it has a 5.63% dividend yield.