July’s Hidden Gems: 4 Undervalued Canadian Stocks Ready to Shine

Investors on the hunt for bargains should look to undervalued Canadian stocks like Nuvei Corporation (TSX:NVEI) in July 2023.

diamonds, hidden gems

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The S&P/TSX Composite Index was down 12 points in late-morning trading on July 10. Some of the worst-performing sectors included telecoms and utilities. Today, I want to look at four Canadian stocks that look undervalued in the first half of July. These equities offer investors a chance at growth and income going forward. Let’s jump in.

This Canadian stock looks dirt cheap in the first half of July

Enghouse Systems (TSX:ENGH) is a Markham-based company that develops enterprise software solutions around the world. Shares of this Canadian stock have dropped 14% month over month as of late-morning trading on July 10. That has pushed the stock into negative territory in the year-to-date period.

This company released its second-quarter fiscal 2023 earnings on June 12. Enghouse delivered revenue of $113 million in the second quarter — up from $106 million in the previous year. Meanwhile, revenue rose to $219 million in the first half of fiscal 2022, which was also up marginally from $217 million in the first half of the prior year. Enghouse boasts an immaculate balance sheet at the time of this writing. Moreover, it is on track for solid earnings growth going forward.

Shares of this Canadian stock currently possess a favourable price-to-earnings (P/E) ratio of 20. Moreover, Enghouse offers a quarterly dividend of $0.22 per share. That represents a 2.7% yield.

Don’t sleep on this undervalued REIT right now

Crombie REIT (TSX:CRR.UN) is a Nova Scotia-based real estate investment trust (REIT) that is focused on real estate in local communities. Its shares were down 1% in early afternoon trading on July 10. The REIT has plunged sharply in the year-over-year period.

In the first quarter of fiscal 2023, Crombie REIT achieved committed occupancy of 96.7% and economic occupancy of 94.5%. Crombie announced the acquisition of two investment properties and Marlstone, a 291-unit residential development project in Halifax, Nova Scotia. Meanwhile, it posted property revenue growth of 2.5% compared to the first quarter of fiscal 2022.

This REIT is trading in solid value territory at the time of this writing. Crombie last paid out a monthly distribution of $0.074 per share, which represents a tasty 6.4% yield.

Here’s an undervalued Canadian stock in the tech space that can explore this decade

Nuvei (TSX:NVEI) is a Montreal-based company that provides payment technology solutions to merchants and partners in North America, Europe, the Middle East, and around the world. Canadian investors should look to get in on the burgeoning payment processing solutions space. Shares of this undervalued Canadian stock have climbed 11% so far in 2023.

Investors got to see Nuvei’s first-quarter fiscal 2023 earnings on May 10. Nuvei posted revenue growth of 20% to $256 million. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. This company last posted adjusted EBITDA of $96.3 million — up from $91.6 million in the previous year.

This Canadian stock spent most of May and June in technically oversold territory. It is not too late to take advantage of the late spring and early summer dip.

One more stock in an exciting sector I’d consider today

Innergex Renewable (TSX:INE) is the fourth and final undervalued Canadian stock I’d look to snatch up in the first half of July. This Quebec-based company operates as an independent renewable power producer in Canada, the United States, France, and Chile. Its shares have plunged 23% in the year-to-date period.

In the first quarter of 2023, Innergex saw adjusted EBITDA drop marginally to $145 million. Moreover, its adjusted net loss widened to $13.9 million. The Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. Innergex last had an RSI of 39, putting it just outside of technically oversold territory. Meanwhile, it offers a quarterly dividend of $0.074 per share, representing a strong 5.7% yield.

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 Ambrose O'Callaghan has positions in Nuvei. The Motley Fool has positions in and recommends Enghouse Systems and Nuvei. The Motley Fool has a disclosure policy.

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