If you want to earn healthy returns from the stock market, consider the time-tested strategy of buying low and selling high, which is one of the oldest and most effective methods of investing. However, finding bargain stocks that have the potential to rebound strongly is not an easy task. You need to look beyond the current price and valuation and dig deeper into the underlying fundamentals and growth prospects of stocks from various industries.
To help you with your search, here are two of the best bargain Canadian stocks that seem ready for a bull run in 2024 and beyond.
Lightspeed stock
The first bargain Canadian stock you can consider right now is Lightspeed Commerce (TSX:LSPD). After rallying by 42% in 2023, the shares of this Montréal headquartered one-stop commerce platform provider have seen more than 28% value erosion in 2024 so far, making them look undervalued to buy for the long term. As a result, LSPD stock now trades at $19.95 per share with a market cap of $3.1 billion.
Lightspeed stock’s poor year-to-date performance, however, doesn’t mean the company’s fundamental growth drivers have changed. In fact, the company has surprised investors and analysts by reporting positive adjusted earnings per share in the last three consecutive quarters. In the quarter ended in March, the Canadian commerce company’s total revenue rose 25% YoY (year over year) to US$230.2 million, exceeding guidance. Its improving operational efficiency and cost management helped the company post adjusted quarterly earnings of US$0.06 per share, exceeding Street analysts’ expectations.
Despite the ongoing weakness in the global economy, Lightspeed is optimistic about maintaining its growth trajectory in its fiscal year 2025 (started in April 2024). During the year, the company projects revenue growth of at least 20%. It also aims to surpass the US$1 billion revenue mark by increasing subscription sales and expanding its base of high gross transaction volume customers. Given these positive developments, recent declines in LSPD stock make it look even more attractive to buy in the long term.
Shopify stock
Just like Lightspeed, Shopify (TSX:SHOP) stock also looks cheap at the current market price as its ongoing financial growth trends and fundamental outlook remain solid. The Ottawa-based e-commerce giant currently has a market cap of $102 billion as its stock trades at $79.19 per share after sliding by roughly 23% year to date.
In the 12 months ended in March 2024, Shopify’s revenue surged by 25.6% YoY to US$7.4 billion with the help of strong growth in its revenue from subscription and merchant solutions. As a result, the company reported adjusted earnings of US$0.92 per share for the period compared to its adjusted earnings of just US$0.03 per share in the previous 12 months. To add optimism, Shopify reported a free cash flow of US$232 million in the latest quarter, more than double compared to US$86 million a year ago.
Moreover, Shopify’s consistently growing cash reserves give it the ability to invest in new growth opportunities and expand its product offerings in the future, brightening its long-term growth outlook. Given that, recent big declines in this amazing Canadian growth stock could be an opportunity for long-term investors to buy it at a big bargain.
