With the TSX Index starting to heat up again after a bout of early spring-time volatility, investors may be wondering if it’s a good time to top up one’s TFSA portfolio. Undoubtedly, the April spike in volatility now seems to be that mini-correction that dip-buyers have been waiting for.
Of course, only time will tell what’s in the cards for the TSX Index as we move into a potentially quiet summer en route to a super-volatile fall season heading up to the U.S. Presidential election. Either way, there are ample value plays that I think are close to the cheapest they’ve been in many quarters.
In this piece, we’ll go over a dui that I’d potentially nibble at as we progress through Spring shower season. Without further ado, consider the following plays that are either at or pretty close to 52-week lows.
Cascades
First up, we have a promising high-yield mid-cap in Cascades (TSX: CAS). For those unfamiliar with the name, it’s in the business of paper products (think paper towels) that make good use of recycled fibres. Indeed, such paper products are necessities that help us all clean up the nastiest of spills. Earlier this year, the stock imploded, with shares now down around 37% from its $15 per share 52-week peak.
Just one (or two) bad days away from 52-week lows in the low $9 range, I consider CAS stock to be quite undervalued, especially with earnings right up ahead. I think the numbers could go either way. In any case, I’m a fan of the 5.13% dividend yield and think it’s safe enough to weather the recent storm. Indeed, I’d look for the impact of recent plant closures as the firm looks to move on from a rough Q4 that saw hefty losses.
Spin Master
Shares of Canadian toymaker Spin Master (TSX: TOY) have also been under some considerable pressure lately, with the stock now down more than 20% over the past year. At just a hair over $30 per share, Spin stock is at a fresh 52-week low. With earnings on tap this week, investors should look for TOY stock to be a major mover. Personally, I’d be inclined to be a net buyer going into the number.
The stock looks quite cheap at 15.4 times trailing price-to-earnings. Further, the macro headwinds seem more than baked in at current levels. Undoubtedly, as long as Spin keeps innovating, I think it’s positioned rather well for a comeback once consumers recover from recent inflationary woes. Will Spin Master stock be for everyone? Definitely not. It’s extremely volatile while facing a number of industry headwinds.
The mid-cap ($3.1 billion market cap) and a high 1.8 beta also entail a greater degree of chop relative to the broad market averages. Either way, I see Spin as a deep value play with potentially underrated long-term growth prospects. In the meantime, fasten your seatbelt for what could be another doozy of a quarter.
Though it’s hard to find a bull on the stock, I do think investors shouldn’t neglect the fact that Spin has been racking up the toy awards. As long as it innovates, the sales growth will come. The firm just needs a bit of help from the broader economy, in my opinion.
