2 Bargains I’d Buy as They Dip Toward 52-Week Lows

Spin Master (TSX:TOY) stock and another underrated Canadian play could surge again as they look to reverse course.

| More on:
edit Sale sign, value, discount

Image source: Getty Images

Even after the recent pullback in the major U.S. market averages, stocks still seem fully priced, especially those with considerable exposure to the generative artificial intelligence (AI) boom. Indeed, it seems like every company wants to bring on some of the AI hype. And though effective monetization of such technologies may be many quarters (or even a few years in the case of certain firms) away.

Additionally, there’s no telling which stocks stand to gain the most from the AI boom. Undoubtedly, you could bet on the market’s high-flying obvious AI winners, but at what cost?

The premiums on the AI top dogs are eventually going to surpass their fair value. Unfortunately, it’s hard to tell when the time comes and what kind of plunge investors who overpay will be in for.

As the second quarter weighs on overheated tech plays, I think a return to value investing could be in the cards. Undoubtedly, when investors forget about risk and freely pay up for difficult-to-value companies based solely on the excitement factor, it can pay dividends to take a step back and do the opposite.

Right now, there are numerous market bargains that may be able to shrug off the market’s pullback and surge higher over the coming months and quarters. And in this piece, we’ll check out two forgotten names that could be ready to impress once again as they inch closer to their 52-week lows.

Spin Master

Spin Master (TSX:TOY) stock has a pretty underwhelming multi-year chart. The stock has seen more than its fair share of ugly tumbles. And though there have been spikes and periods of flat-lining (flat performance is typical for many forgotten mid-cap Canadian companies), I think TOY stock stands out as one of the most underestimated and perhaps undervalued names in the TSX Index’s mid-cap universe. With a $3.2 billion market cap, it’s easy to overlook Spin’s growth prospects as it looks to compete with some heavyweights in an industry that isn’t doing all too well right now.

Indeed, the toy market has been a tough place in recent years. But that doesn’t mean Spin Master doesn’t have room to innovate and outdo its rivals. As the company readies a new roster of toys well ahead of the 2024 holiday season, perhaps investors may wish to pick up a few shares today before investors begin to respect the innovative line-up of new toys that may be able to outsell some of the offerings by Spin’s top rivals.

Spin’s president, Doug Wadleigh, mentioned his firm’s focus on “disruptive toy innovation.” It’s this innovative ability that could lead to meaningful market gains, even as the industry continues to feel the weight of headwinds.

At 15.7 times trailing price to earnings, I believe Spin’s innovative talent to be discounted.


Fortis (TSX:FTS) is a pretty well-known utility play, especially among Canadian retirees. After slipping once again, the stock goes for $52 and change to go with a 4.55% dividend yield. What’s dragging the $25.8 billion utility down? A combination of high rates and a lack of enthusiasm over the firm’s predictable but unsurprising portfolio of growth projects.

As market volatility rocks markets once again, though, look for FTS stock to begin to inch higher as it looks to move under its own weight. At 16.9 times trailing price to earnings, FTS stock is on the cheap side of its historical range. I think it’s a great buy right here before defensive dividend investing comes into style again!

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 Joey Frenette has positions in Fortis. The Motley Fool recommends Fortis and Spin Master. The Motley Fool has a disclosure policy.

More on Investing

path road success business
Bank Stocks

Scotiabank Is Down 0.9% After Earnings: What Investors Need to Know

Bank of Nova Scotia (TSX:BNS) released earnings yesterday. Here's what you need to know.

Read more »

Hourglass projecting a dollar sign as shadow
Dividend Stocks

For a Shot at $5,000/Year in Passive Income, Buy 6,850 Shares of This TSX Stock

Whitecap Resources is a monthly dividend stock that offers you a tasty dividend yield while trading at a cheap valuation.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Wednesday, May 29

Besides more Canadian corporate earnings, volatile commodity prices could give further direction to the TSX benchmark today.

Read more »

Happy family father of mother and child daughter launch a kite on nature at sunset

3 Soaring Stocks to Hold for the Next 20 Years

These three stocks are good bets for the long haul, given their healthy long-term growth prospects.

Read more »

grow dividends
Tech Stocks

Celestica Stock Is up 44% Since Earnings: What Investors Need to Know

Celestica continues to benefit from strong demand and production efficiencies, yet the stock remains undervalued.

Read more »

A plant grows from coins.

2 Dividend Stocks Paying 5% or More That Could Beat the Market in 2024 and Beyond 

Here are two top dividend stocks long-term investors may certainly want to consider for their yields and growth profiles right…

Read more »

edit Balloon shaped as a heart
Dividend Stocks

Love Value Stocks? 2 That Are Screaming Buys in May 2024

Patience can pay off by investing in these two value stocks with nice dividends and the potential to turn around.

Read more »

healthcare pharma
Tech Stocks

What’s Going on With WELL Health Stock?

WELL stock (TSX:WELL) made strong moves once again, with record earnings and even higher guidance for 2024.

Read more »