The Toronto Stock Exchange has already surpassed its overall return in 2023, heading into the last quarter of 2024 (+14.28% versus +8.12% in 2023). It will be back-to-back wins for Canada’s premier stock market if momentum sustains until the end of the year. However, even if 10 of 11 primary sectors have positive gains thus far, there are stocks you can buy at a bargain.
Ballard Power Systems (TSX: BLDP), Coveo Solutions (TSX: CVO), and Algonquin Power & Utilities (TSX: AQN) are among the names trading at absurd discounts. You can take advantage now as the prices won’t stay depressed for long.
Industrial
Growth investors know Ballard Power Systems because the industrial stock was a TSX30 winner for three consecutive years (2019 to 2021). Unfortunately, the glitter of the top-performing growth stock waned in the ensuing years. The share price has gone down to $2.37, representing a 51.73% year-to-date loss.
The $709.6 million company develops and manufactures proton exchange membrane (PEM) fuel cell products. PEM fuel cells are used in various applications, including transport. They are environment-friendly, too, because converting hydrogen and oxygen into electricity without combustion means no carbon emissions.
Meanwhile, Ballard is awaiting widespread installation of hydrogen infrastructure and increased fuel cell adoption. The build-out of the hydrogen sector in the U.S. could be a growth catalyst.
Technology
The tech sector has found its groove (+13.86% year to date), but Coveo Solutions is still in a slump. At $6.10 per share, current investors are down 36.46% year-to-date. This $595 million Software-as-a-Service (SaaS) company is an e-commerce and enterprise search software provider.
Coveo boasts an AI-Search & Generative Experience Platform that could trigger a turnaround soon. The solutions in the platform can be e-commerce, websites, workplaces, and service & support. Its chairman and chief executive officer (CEO), Louis Têtu, said fiscal 2024 was a transformative year, and the artificial intelligence (AI) platform continues to drive positive business momentum.
In the first quarter (Q1) of fiscal 2025 (three months ending June 30, 2024), total revenue increased 6% year over year to US$30.6 million. The net loss of US$6.1 million was 12% better than Q1 fiscal 2024. Têtu said Coveo’s generative AI solutions are well-positioned against competitors. “We believe this will position us well for success and a reacceleration of growth as we move through our fiscal 2025,” he added.
Utility
Algonquin Power & Utilities, a $5.3 billion regulated utility company, through its operating business, Liberty, provide regulated water, electricity, and natural gas utility services to customers in North America. Falling interest rates are tailwinds for utility companies.
AQN underperforms at $7.34 per share (-8.94% year to date), although the 4.87% dividend yield compensates for the temporary weakness. In Q2 2024, total revenue (regulated services and renewable energy) declined 5% year over year to US$598.6 million, while net earnings reached US$200.8 million compared to the US$253.2 million net loss in Q2 2023.
Its CEO, Chris Huskilson, said the direction is to become a pure-play regulated utility following the sale of its renewable energy business. The near-term plan is to pay down debt and spend capital on new investments in the long run. Huskilson believes the move will strengthen the balance sheet and enhance the quality of earnings.
Good entry points
The share prices of Ballard Power, Coveo, and Algonquin Power are good entry points for bargain hunters. However, you should have a higher risk appetite to pick them up.
