It’s been a choppy grind back toward all-time highs for the Canadian stock market. The S&P/TSX Composite Index has experienced its share of promising runs over the past year, but the index doesn’t have much to show for it. Each time the market begins gaining momentum, it seems to quickly run out of steam and return any gains.
As of writing, the index is trading just about 10% below all-time highs from early 2022.
When it comes to individual companies, there’s no shortage of TSX stocks that are trading far below all-time highs right now. After a loss-filled year in 2022, many growth stocks still have a ways to go to make up for the losses over the past year and a half.
I’ve reviewed two discounted growth stocks that are trading at huge discounts right now. In the short term, I’d be prepared for more volatility. But if you’ve got the time and are willing to be patient, both of these companies have the potential to return to their market-beating ways.
WELL Health Technologies
Not many TSX stocks outperformed WELL Health Technologies (TSX:WELL) during the pandemic. The growth stock ended 2020 up an incredible 400%. Shares have pulled back since then but are still up a market-crushing 170% since the beginning of 2020.
WELL Health provides virtual health services to customers across North America. It was no surprise to see demand skyrocket during the early days of the pandemic. Over time, though, demand slowed, and the stock reacted accordingly. Shares are currently down about 50% from all-time highs set in mid-2021.
Putting the short-term tailwind from the pandemic aside, demand for telehealth services has been gradually rising in recent years. That’s not a trend that I’d bet on slowing down anytime soon, either.
The company is still only valued at a market cap of $1 billion. At that size, coupled with a massive market opportunity, WELL Health not only has market-beating but multi-bagger growth potential in the coming years.
With shares already up 50% this year, growth investors may want to act quickly if they’re interested in loading up.
Air Canada
The airline industry was another area of the stock market that was largely impacted throughout the pandemic. Demand for air travel came to an abrupt halt in early 2020, which unsurprisingly led to the shares of most airlines to plummet.
Canada’s largest airline, Air Canada (TSX:AC), continues to trade at a discount of more than 50% below all-time highs, which were set prior to the pandemic. That puts shares at a loss over the past five years, compared to the market’s return of more than 20%.
For long-term investors, now could be an incredibly opportunistic time to load up on a proven airline stock. Not many airline companies have a history of delivering market-beating returns, but Air Canada is one of them.
It’s still a large hill to climb, but Air Canada shares are showing signs of life. The stock is up close to 20% over the past year, easily outpacing the returns of the market.
The airline industry certainly isn’t known for growth, but Air Canada does deserve a second look. Investors looking to take advantage of a beaten-down price should have this airline stock at the top of their watch list.
