There’s no question that after all the economic headwinds companies have faced over the past year and a half, many are trading undervalued. However, while there are tonnes of stocks undervalued, only a handful are dirt cheap, offering significant bargains and tonnes of upside potential in the next bull run.
These types of economic and market environments create substantial buying opportunities, because you can find stocks trading ultra-cheap simply due to impacts on their operations that are only temporary.
It does require you to take on more risk and buy a struggling stock that needs to turn its business around. But if you believe in the company’s potential, and the impacts to operations should subside as the economic environment improves, these investments can offer considerable capital gains potential as they rally back to fair value.
With that in mind, if you’re looking for stocks to buy at a bargain before the next bull run, here are two-dirt cheap investments to consider buying today.
One of the best bargain stocks to buy before the next bull run
One of the cheapest stocks on the market that you can buy at a massive bargain before the next bull run is Corus Entertainment (TSX: CJR.B).
Corus predominantly owns TV channels and radio stations across Canada, businesses that have been impacted by the current economic environment.
Although a recession has yet to fully materialize, advertising spending is often a leading indicator of economic trouble and typically falls before recessions hit. Although the economy hasn’t fully entered a recession yet, media stocks like Corus have already seen impacts on their operations.
For example, in the last four quarters, Corus’s revenue is down 6.7% year over year and could continue to remain impacted until the economy shows signs of a soft landing or, at the very least, that the worst is over.
For now, though, while Corus stock continues to trade at such a significant bargain, it’s easily one of the best stocks to buy ahead of the next bull run.
Not only is it undervalued today, trading at just 5.3 times its expected earnings over the next four quarters, but it’s unbelievably cheap when you compare it to fiscal 2025 when analysts expect Corus’s financials and operations will normalize.
Currently, analysts believe that in fiscal 2025 Corus will generate $0.51 in earnings per share (EPS), giving it a current price-to-2025-earnings ratio of just under 2.5 times.
And best of all, Corus will pay you to wait for its recovery, as the stock currently offers a yield of roughly 9.5%. And if you’re worried that dividend may be unsafe, it requires less than $24 million per year for Corus to fund it.
Meanwhile, even as it’s being impacted today, analysts still expect Corus will generate free cash flow of more than $125 million in fiscal 2023 and another $167 million in fiscal 2024.
If you’re looking for a bargain stock to buy ahead of the next bull run, Corus is certainly a stock to consider buying now.
A top recovery stock
In addition to Corus, another unsurprising bargain stock to buy ahead of the next bull run is Cineplex (TSX: CGX).
Cineplex has been cheap for years now, ever since the pandemic impacted its operations severely. With the film industry finally recovering, though, and with Cineplex’s ancillary businesses, such as its entertainment venues, also recovering rapidly, there’s a tonne of capital gains potential for investors willing to buy the stock now.
Although Cineplex has reported negative earnings for three straight years now, analysts expect that 2023 will be the year Cineplex finally reports a profit again.
And right now, with estimates calling for $1.11 of EPS for 2023, Cineplex stock is trading at a forward price-to-earnings ratio of just 7.9 times.
And although Cineplex is in recovery mode, it still won’t have fully recovered by the end of 2023. Even though it’s trading at a significant bargain today and has a tonne of potential for significant capital gains, Cineplex could offer investors years of potential all the way through the next bull run.
Therefore, if you’re looking for cheap stocks to buy now, there’s no question that Cineplex is one of the best.
