Despite the volatile environment, the S&P/TSX Composite Index is up around 4% this year and trades just 3.4% lower from its 52-week high. However, few companies have failed to participate in this rally. Of these companies, I believe the following three stocks offer attractive buying opportunities, given their growth prospects and discounted stock prices.
Magna International
Magna International (TSX: MG) has been under pressure over the last few years amid supply chain concerns and weakness in the EV (electric vehicle) segment. It has lost over 50% of its stock value compared to its 2021 highs. However, I believe the selloff is overdone, with its NTM (next 12-month) price-to-earnings multiple declining to 6.3.
Despite the near-term weakness, the EV segment offers excellent long-term growth potential. Precedence Research projects the global EV market to grow at an annualized rate of 23.4% from 2024 to 2033. Given its expertise and continued investment in powertrain electrification, battery enclosures, and active safety segments, Magna International could boost its financials in the coming years. The company has also raised its dividend for 14 consecutive years at an annualized rate of 10%. Its forward dividend yield stands at a healthy 4.49%.
So, despite the near-term challenges, investors with longer investment horizons should look to accumulate the stock to earn superior returns in the long run.
Lightspeed Commerce
Lightspeed Commerce (TSX: LSPD) is another TSX stock that has been under pressure over the last few weeks. The omnichannel commerce solutions provider has lost over 35% of its stock value compared to its 52-week high. The uncertain global economy amid a prolonged high interest rate environment and management’s cautious outlook has weighed on the company’s stock price. Amid the selloff, the company trades at 0.9 times its book value and 1.9 times analysts’ projected sales for the next four quarters.
Meanwhile, more businesses are adopting an omnichannel selling model amid growing online shopping, therefore expanding Lightspeed’s addressable market. The company’s new product offerings and unified POS (point of sales) and payments initiative could continue to expand its customer base and drive ARPU (average revenue per user). The company could benefit from the increased transition towards higher gross transaction value customer locations. Given its growth potential, I believe Lightspeed Commerce would be an excellent buy at these levels.
BlackBerry
BlackBerry (TSX: BB), which has a solid presence in the cybersecurity and IoT (Internet of Things) segments, has been under pressure due to weak performances. However, the company posted an excellent first-quarter performance yesterday, outperforming its revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) guidance. For the quarter ended on May 31, the company posted revenue of $144 million, higher than its guidance of $130-$138 million. It has posted solid performances across cybersecurity and IoT segments.
Further, Blackberry’s adjusted EBITDA losses stood at $7 million, better than the management guidance of a $15-$25 million loss. Its continued investment in scaling its services team, new design wins in the ADAS (advanced driver assistance system) and digital cockpit, and growing penetration of QNX amid the growth in software-defined vehicles could boost its IoT revenue in the coming quarters.
Moving to the cybersecurity segment, BlackBerry expects to reap benefits from its products’ go-to-market changes despite the challenging macro environment. Considering its healthy growth prospects, I believe BlackBerry would be an excellent buy at these levels.
