Several growth stocks experienced a decline in the second half of July 2023 as investors were worried about another interest rate hike by the federal reserve. But it could also be the last time the bank regulator will raise rates.
Moreover, if the economy deteriorates further, the federal reserve will be forced to cut rates and boost consumer demand, fueling the start of an extended bull run in the next 12 months.
So, the time is ripe to buy and hold undervalued growth stocks trading at a discount. Here are three top TSX stocks trading under $50 you can buy right now.
Payfare stock
A fintech company that offers online banking services to gig workers, Payfare (TSX: PAY) stock is priced at $6.53, valuing the company at $311 million by market cap. Its services include instant payments and loyalty-reward solutions for next-generation workers globally.
Payfare has increased sales from $6.3 million in 2019 to $130 million in 2022. Analysts expect revenue to touch $191 million in 2023 and $248 million in 2024. Due to this rapid growth, Payfare’s bottom line is forecast to improve from an adjusted loss of $0.06 per share in 2022 to earnings of $0.61 per share in 2024.
Priced at less than 10 times 2024 earnings, Payfare stock is really cheap, given its growth potential. A Mastercard report forecasts gig economy transactions to grow by 17% annually to $455 billion in 2023, which should positively impact Payfare and its peers.
Payfare stock trades at a discount of 78% to consensus price target estimates.
Barrick Gold stock
One of the largest gold miners globally, Barrick Gold (TSX: ABX) stock is priced at $21.33 at the time of writing. Barrick Gold operates tier-one mining assets and provides investors with exposure to commodities such as gold and copper. Typically, tier-one mining assets are defined as those which produce at least 500,000 ounces of gold each year and have over 10 years of productive life remaining.
Priced at 18 times forward earnings, ABX stock is quite cheap, given earnings are forecast to rise by 16% in 2023 and 30% in 2024.
Barrick Gold has a debt-free balance sheet as it sold noncore assets in recent years, providing it with the flexibility to buy back shares and pay investors an annual dividend per share of $0.60 per share, indicating a yield of 2.7%.
Nuvei stock
The final TSX stock on my list is Nuvei (TSX: NVEI), which is priced at $23. Down 87% from all-time highs, Nuvei trades at 9.8 times forward earnings. Nuvei provides payment technology solutions such as mobile, online, and in-store payments to merchants in the Americas, Europe, the Middle East, Africa, and Asia Pacific.
Due to its compelling valuation, analysts expect Nuvei stock to more than double in the next 12 months. The company reported sales of $307 million in Q2, an increase of 45% year over year. Its adjusted earnings per share, however, narrowed to $0.39 from $0.51 in the year-ago period due to a higher cost base.
But Nuvei remains a top investment choice for long-term investors as it expects to maintain an EBITDA (earnings before interest, tax, depreciation, and amortization) margin of over 50% at scale.
