3 Cheap TSX Stocks I’d Buy Before the Market Heats Up

Fundamentally strong stocks such as goeasy and WELL Health continue to trade cheap, presenting an excellent buying opportunity.

| More on:

Despite fears, the economy displayed impressive resilience this year, providing a significant uplift to the equity market. Further, the moderation in the inflation rate led to a rebound in several Canadian stocks year to date. However, several fundamentally strong stocks continue to trade cheap, presenting an excellent buying opportunity near the current levels. 

With this backdrop, let’s explore three cheap TSX stocks I’d buy before the market heats up.

goeasy

Shares of Canada’s leading non-prime consumer lending company, goeasy (TSX:GSY) are too cheap to ignore near the current levels. The stock is trading at the next 12-month price-to-earnings multiple of 8.1. While goeasy stock is trading cheaper than its historical valuation, it continues to grow its top and bottom line at a double-digit rate, which makes it attractive. Further, goeasy also offers a healthy dividend yield of over 3% (based on its closing price of $120.03 on November 3), which supports my bullish outlook on the stock. 

It’s worth highlighting that goeasy’s revenue grew at a CAGR (compound annual growth rate) of 19.44% in the last five years (as of June 30, 2023). What’s more impressive is that its EPS (earnings per share) sports a CAGR of 31.91% during the same period. 

goeasy is experiencing healthy product demand, including unsecured lending, automotive financing, and home equity loans. This indicates that the company’s loan portfolio could continue to expand, providing a lift to its top line. Further, a large subprime lending market will likely support its growth. Higher sales, stable credit performance of the loan book, and improvement in operating leverage will boost its operating income and EPS. Moreover, goeasy is well positioned to enhance its shareholders’ value through higher dividend payments in the coming years. 

Lightspeed

Next is Lightspeed (TSX:LSPD) stock. It’s worth noting that the company provides a cloud-based commerce platform and offers point-of-sale (POS) solutions. Despite consistently delivering healthy sales growth, Lightspeed stock has underperformed this year. Meanwhile, its stock is trading at an extremely low valuation. This presents a compelling opportunity to buy its shares near the current levels. 

Notably, Lightspeed stock is trading at a forward enterprise value-to-sales (EV/sales) multiple of 1.5, which is near an all-time low. Furthermore, the company is growing revenue rapidly while focusing on reducing its costs, which is positive. 

Overall, its focus on two flagship products, the rollout of Unified Payments and the integration of AI (artificial intelligence), will drive its customer base and accelerate its growth. Further, its focus on acquiring and quickly integrating companies will strengthen its competitive positioning and support its financials and stock price. 

WELL Health Technologies

WELL Health Technologies (TSX:WELL) is another cheap stock to buy right now. Trading at an EV/sales multiple of 1.6, WELL stock looks attractive. While WELL Health stock trades cheaply, the company generates record revenue.

The digital healthcare company benefits from the growing number of patient visits on its platform. Further, its focus on accretive acquisitions and generating profitable growth bode well for long-term growth. WELL Health has also launched several key initiatives related to AI, such as WELL AI Voice and WELL AI Investment Program, which provide solid growth opportunities ahead. 

Notably, the solid organic growth, investments in AI-based products and services, and accretive acquisitions will enable WELL Health to deliver substantial growth. The company aims to surpass $1 billion in annual revenue within two years, which is positive and supports my bullish view about its stock.   

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy.

More on Investing

ETF chart stocks
Investing

Here Are My 2 Favourite ETFs for 2025

These are the ETFs I'll be eyeballing in the New Year.

Read more »

money goes up and down in balance
Dividend Stocks

This 6% Dividend Stock Is My Top Pick for Immediate Income

This Canadian stock has resilient business model, solid dividend payment and growth history, and a well-protected yield of over 6%.

Read more »

Canadian energy stocks are rising with oil prices
Energy Stocks

Outlook for Cenovus Energy Stock in 2025

A large-cap energy stock and TSX30 winner is a screaming buy for its bright business outlook and visible growth potential.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Stock Market

CRA: Here’s the TFSA Contribution Limit for 2025

The TFSA is a tax-sheltered account that allows you to hold diversified asset classes at a low cost.

Read more »

Hourglass and stock price chart
Tech Stocks

1 Canadian Stock Ready to Surge Into 2025

There is a lot of uncertainty about the market in general as we move closer to the following year, but…

Read more »

think thought consider
Stock Market

Billionaires Are Selling Apple Stock and Picking up This TSX Stock Instead

Billionaires like Warren Buffett continue to trim stakes in Apple stock, with others picking up this long-term stock instead.

Read more »

ways to boost income
Dividend Stocks

1 Excellent TSX Dividend Stock, Down 25%, to Buy and Hold for the Long Term

Down 25% from all-time highs, Tourmaline Oil is a TSX dividend stock that offers you a tasty yield of 5%…

Read more »

canadian energy oil
Energy Stocks

Is Baytex Energy Stock a Good Buy?

Baytex just hit a 12-month low. Is the stock now oversold?

Read more »