If you have made it through the holiday shopping season and still have some cash left over, you might be wise to put some of it to work for you. Christmas presents tend to depreciate quickly.
However, smart investments in quality TSX stocks can appreciate for years and even decades. A smartly purchased stock can be a gift that keeps on giving all year round.
If you are considering what TSX stocks may be a good buy for the new year, here are two that look like decent bargains today.
An underfollowed TSX stock set for a strong 2024
Calian Group (TSX: CGY) has had a challenging year in 2023. The company had to reduce guidance due to some weakness in its cybersecurity division and a decline in margins. This TSX stock pulled back 15% in 2023.
Fortunately, Calian was able to quickly right-size its cost structure, and margins started to recover in the fourth quarter. In fiscal 2023, Calian grew revenues by 13% to $659 million.
Profits were neutral with the prior year. However, the company believes it can achieve between 11% and 20% revenue growth and between 25% and 35% adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) growth.
Calian made some significant acquisitions in 2023. These are expected to contribute to its recurring revenue streams as well as help amplify margins. As a result, the setup for 2024 looks quite good.
Calian provides a diverse mix of services (IT/cybersecurity, healthcare, satellite technology development, and defence training) for government and private sector clients. While its quarter-to-quarter results can be lumpy, it tends to have very consistent/secure revenues over longer periods. Its businesses are exposed to vital service areas, many of which have mechanisms for longer-term organic growth.
Today, this TSX stock trades with a forward enterprise value-to-EBITDA (EV/EBITDA) ratio of 7.6 and price-to-earnings (P/E) ratio of 11 times. If it can successfully execute its growth plan in 2024, today could be an excellent time to add to the stock.
A real estate services stock with an excellent long-term record
Another TSX stock that has been volatile in 2023 is Colliers International Group (TSX: CIGI). Colliers is a major global provider of commercial real estate services (brokerage, property management, project management, financing, engineering, and asset management).
The real estate transaction market has essentially stalled in the past few years. Real estate buyers and sellers are waiting for rates to stabilize or drop. However, there are signs that this sentiment may be shifting. Consequently, Colliers could see a massive catch-up move in its capital markets business in 2024.
In the meantime, its remaining business is very resilient. Over 65% of EBITDA comes from recurring revenue businesses. The company has traditionally grown by making smart acquisitions and using its scale to amplify its services reach. Today, Colliers trades for a forward 17 times earnings and an EV/EBITDA of 13.
You might have to be a bit brave with Colliers stock. The timing of a recovery in commercial real estate transactions is not certain. However, it is inevitable.
Overall, Colliers has a great management team, a strong brand, and a solid track record of high-teens total annual returns. If you take a patient approach, this TSX stock could be a very worthwhile gift you buy yourself this holiday season.
