Investing in stocks trading at low prices or offering significant value could be an excellent strategy for generating substantial returns and creating wealth. While the TSX has proven resilient amid macro uncertainty and trended higher, a few fundamentally strong stocks are still trading cheap, offering a good buying opportunity.
Against this backdrop, let’s look at three Canadian stocks you’ll be glad you bought at these prices. These stocks offer a mix of value, growth potential, and resilience, making them compelling investments at their current prices.
Lightspeed
Trading near its 52-week low, Lightspeed Commerce (TSX: LSPD) is an attractive stock to buy at current market prices. The fear of an e-commerce slowdown has weighed on Lightspeed stock, leading to a year-to-date decline of over 32% in its value. However, the company’s fundamentals remain strong, and it is well-positioned to benefit from the shift in selling models towards multi-channel platforms.
This Canadian technology company continues to consistently generate durable revenue growth despite macro headwinds. Further, it has changed its go-to market strategy to boost sales and improve margins. It’s worth noting that Lightspeed focuses on achieving breakeven and turning profitable. This could give a stellar boost to its share price.
The company will likely witness an increase in demand for its offerings as the macro environment improves, leading small- and medium-sized enterprises (SMEs) to invest in technology and upgrade their traditional payment systems.
Lightspeed is expanding its customer base with high gross transaction value (GTV) customers. These high GTV customers drive multiple module adoption, thus boosting its average revenue per user (ARPU) and margins. Further, high GTV customers are sticky, which helps reduce churn. Adding to the positives, Lightspeed integrated payments into its software platform. This will improve the unit economics and support margins.
Besides growing organically, Lightspeed will benefit from its strategic acquisitions, supporting product development and driving customer locations. Further, Lightspeed’s enterprise value-to-sales (EV/sales) multiple is around an all-time low, providing a solid entry point.
WELL Health
Shares of digital healthcare company WELL Health Technologies (TSX: WELL) could be a solid addition to your portfolio. Even though its stock witnessed a recovery and is up about 19% year to date, its valuation is near an all-time low, making it a compelling value stock.
For instance, WELL Health stock is trading at the next 12-month EV/sales multiple of 1.6, which is much lower than its historical average of 4.2. While the stock is trading cheaply, it offers investors exposure to strong growth potential, operational efficiency, and advancements in artificial intelligence (AI)-powered care.
WELL Health has been consistently delivering solid sales, reflecting strong organic sales and benefits from its acquisitions. Further, its predictable revenue base and efforts to reduce costs enable WELL Health to deliver profitable growth in the long term. Overall, WELL Health is a compelling value stock offering stellar growth potential.
Shopify
Speaking of top-quality stocks to buy now, investors could consider investing in e-commerce platform provider Shopify (TSX: SHOP). The stock has witnessed a pullback and is trading significantly lower than its highs. However, the company is poised to deliver solid gains in the long term, driven by the growing penetration of omnichannel commerce. Moreover, its ability to grow merchandise volumes and deliver solid revenue growth is positive.
Shopify’s diverse product offerings, including sales and marketing tools, payment processing, and shipping solutions, position it well to capitalize on the omnichannel shift. Further, the addition of new marketing channels and innovative products will drive its active merchant base and support growth.
Overall, Shopify’s solid competitive positioning in the e-commerce space, new product launches, and higher penetration of Shopify Payments will likely support its financials and share price. In addition, its improving take rate, integration of AI in its offerings, cost-reduction efforts, and transition toward an asset-light business model could help Shopify deliver sustainable earnings and drive its stock.
