There’s no secret that the market has faced headwinds over the last few years, causing some of the top Canadian stocks you can buy for the long term to become unbelievably cheap.
And although many investors expect the situation to worsen before it gets better, with most expecting a recession to materialize soon, if you find a high-quality stock trading severely undervalued, you may want to pull the trigger and buy shares today.
Predicting what will happen in the market and economy can be extremely difficult. And you don’t want to miss out on the opportunity to buy shares cheaply.
When the market rebounded from the pandemic selloff within months, many expected that a second crash would materialize, which caused lots of investors to wait on the sidelines and miss the massive discounts the market was offering.
Therefore, as long as you believe in the long-term potential of the stocks you are watching, and think they trade at compelling valuations well below their true value, then now is an excellent time to pull the trigger and add high-quality stocks to your portfolio.
And while there are plenty of investments to make today, here are three top Canadian stocks I’m looking to buy as we head into July 2023.
One of the top Canadian stocks to buy as it rebounds in 2023
Although there are plenty of stocks trading cheaply in the current market environment, one of the top Canadian stocks to buy now, due to the value it offers and the momentum it’s gaining, is Cineplex (TSX:CGX).
Cineplex is not only ultra-cheap, but it’s also finally recovering from the pandemic, giving the stock a tonne of upside over the next year, as consumers flock back to its movie theatres.
Although capacity restrictions were lifted last year, it took some time for the film industry to catch up, as so many productions were delayed due to the pandemic.
With several blockbusters already released so far this year, though, and many more scheduled to be released in the coming months, Cineplex is now seeing a rapid recovery, which should give the stock significant upside potential.
Analysts are estimating Cineplex will earn normalized earnings per share (EPS) of $0.21 this year — the first year of profitability since before the pandemic. However, with the stock trading at roughly $8.60 today, that’s a forward price-to-earnings (P/E) ratio of more than 40 times.
However, with the stock expected to earn normalized EPS of more than $1 next year, Cineplex trades at roughly 8.5 times next year’s earnings.
Therefore, with so much recovery potential and with Cineplex trading ultra-cheap, it’s easily one of the top Canadian stocks to buy now.
Two of the best discounts to buy on the market today
In addition to Cineplex, two more top Canadian stocks that I’m looking to buy heading into July 2023 are Aritzia (TSX:ATZ) and Cargojet (TSX:CJT).
Aritzia has been an impressive growth stock over the last few years. The women’s fashion retailer has grown unbelievably quickly, as it benefits from its incredible e-commerce platform and expands its network of boutiques across the United States.
With many expecting a recession, though, and the fact that Aritzia sells discretionary goods, the stock price has fallen significantly, creating an excellent buying opportunity for investors.
Aritzia trades at a forward P/E ratio of just 24.4 times — well below its five-year average of 36.3 times. And considering that analysts still believe Aritzia will grow its sales by at least 13% annually for each of the next four years, having the opportunity to buy this top Canadian growth stock now at such a significant discount makes it a no-brainer.
Cargojet is another top Canadian growth stock trading ultra-cheap. In fact, it’s more than 50% below its all-time high reached back in 2021.
A slowdown in e-commerce has investors worried that Cargojet could see significant impacts on its business in the short term. In the long term, though, Cargojet continues to have a tonne of growth potential, especially with the rising popularity of online shopping and Cargojet’s competitive position.
Therefore, with Cargojet trading so cheaply and its average analyst target price sitting at a 60% premium to where it trades today, it’s one of the top Canadian growth stocks to buy now.
