Got $1,000? Here are My 2 Top Stocks to Buy Right Now

Have a little extra cash to invest in May? These two stocks have a nice combination of value and growth.

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If you have a long investment horizon, often the best time to invest in stocks is when you have cash. If you wait for the perfect entry point, you might be waiting for a very, very long time.

There are always opportunities to add to good businesses. Stocks can fluctuate for seemingly random reasons. Those market disconnections are perfect opportunities for adding stocks.

It may be a short-term miss on analysts’ expectations, or the company may be facing near-term headwinds, or just a change in institutional ownership that causes a stock decline. Those dips can be excellent times to establish or grow your position in a stock. If you don’t mind some stocks that are hitting temporary road bumps, here are two I’d buy with $1,000 today.

A steady industrial growth stock

Calian Group (TSX:CGY) might be one of the best deals on the TSX right now. At first glance, CGY stock may not look overly exciting. It is only up 2% over the past three years.

However, its operations look to be turning around in 2024. The market has not yet noticed.

For the first six months of its fiscal year, Calian’s revenues are up 20%, adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) is up 45%, earnings per share is up 12%, and operating cash flow is up 40%.

Calian operates four businesses focused on healthcare, training, specialized technologies, and cybersecurity/information technology. It caters to military, government, and institutional clients.

Over the past five years, each of these businesses have had a nice combination of acquisition and organic growth. Recently, the company ramped up its acquisition spend. It has significantly expanded its customer, geographic, and product assortment/exposure.

Calian has a strong backlog. It has started to post project wins wherein numerous business segments are utilized. These synergies could create a new growth dynamic in the overall business.

In 2024, Calian targets respective revenue and adjusted EBITDA growth of 18% and 35%. Nonetheless, this stock only trades for 12 times earnings and 13 times free cash flow. At some point, the market will see that this is just too cheap for the quality of its business.

A top Canadian transport stock

TFI International (TSX:TFII) is a strong company that is facing some near-term headwinds. TFI has been a top-performing TSX stock for several years. At present, it operates one of the largest freight/trucking/logistics companies in Canada. It also has a growing presence in the U.S.

The North American freight market has slowed significantly in the past year. Volumes are down and that is impacting industry profits. Fortunately, TFI is performing better than many peers. It continues to generate solid free cash flows.

With a focus on improving operations and customer experience, it could stand to take market share. The company is very acquisitive, so it may be able to take advantage of low valuations and add several tuck-ins into its portfolio.

TFI just added a large, specialized freight business in the U.S. It recently suggested several strategic initiatives (like business spinouts or divestments) that could unlock a substantial valuation variance between TFI and its larger U.S. peers.

TFI stock is down 7% in the past three months. Its valuation at 13 times free cash flow is not demanding. TFII may be an attractive addition for a shareholder willing to be patient through the market downturn.

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 Robin Brown has positions in Calian Group and TFI International. The Motley Fool recommends Calian Group. The Motley Fool has a disclosure policy.

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