November was a strong month for the Canadian stock market after a significant downturn, especially between mid-September and the end of October. As of this writing, the S&P/TSX Composite Index is up by 8.74% from its October 27th levels. Likely due to easing inflationary pressure, the Canadian stock market saw a substantial period of buying in November.
Despite the recent gains in the Canadian benchmark index, several high-quality companies are still trading at a discount compared to their 52-week highs. While many of them have seen a downturn to fairer valuations, there still are value investing opportunities in the stock market right now.
Investing in top-notch stocks trading at discounts can help you earn superior returns as share prices climb. Today, we will look at two TSX stocks you can buy to capture capital gains when share prices eventually surge.
WELL Health Technologies (TSX:WELL) is a $911.80 million market capitalization multichannel digital health technology company. It is the only Canadian tech company primarily involved in the healthcare sector.
It is Canada’s largest owner and operator of outpatient health clinics. It owns and operates primary healthcare facilities in Canada and the United States. The pandemic-induced lockdowns caused a surge in demand for telehealth services and WELL Health Technologies fully benefitted from the development.
After the selloff, many tech companies have yet to recover to their all-time highs. As of this writing, WELL Health Technologies stock trades at $3.83 per share, down by 35.52% from its 52-week high and 56.87% from its all-time high. The company’s third-quarter performance saw its revenue increase by 40.2% from the same period last year.
Additionally, it continues launching new and innovative products to drive growth and grow shareholder value. Despite the downturn, its continued solid performances make it too attractively priced to ignore right now.
Lightspeed Commerce (TSX:LSPD) is another beaten and battered tech stock that has fallen far from its all-time highs. As of this writing, it trades for $22.63 per share, down by over 85.75% from its all-time highs. The tech sector meltdown hit the likes of Lightspeed stock the hardest after its meteoric rise since going public in 2019.
Lightspeed Commerce is a $3.46 billion market capitalization point-of-sale and e-commerce software provider headquartered in Montreal.
Its cloud-based commerce platform supports omnichannel transitions, allowing it to provide value for its client base, primarily consisting of small- and medium-sized businesses. The selling model’s growing shift to multi-channel commerce platforms makes Lightspeed stock one of the biggest players in the market.
With its growing focus on high gross transaction value (GTV) clients, Lightspeed Commerce looks set to perform well.
While the decline in valuation suggests otherwise, the business itself is doing well. Its second-quarter performance for fiscal 2024 saw its revenue grow by 25%, exceeding its guidance. Given its growing financials and cheap valuation, it can be an excellent addition to your self-directed portfolio.
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Undervalued stocks offer impressive returns to investors when the market realizes their true value. If you are interested in generating solid returns over the long run, identifying and investing in value stocks while they trade at a discount can be an excellent strategy. By choosing value stocks now, you can benefit from the upward trajectory resulting in capital gains.
While tech stocks might not seem as attractive as they did before the industry-wide selloff two years ago, WELL Health Technologies stock and Lightspeed Commerce stock are too attractively priced to ignore right now.