Amid the optimism over a 50 basis point interest rate cut by the United States Federal Reserve and expectation of further monetary easing initiatives, the Canadian equity markets have witnessed healthy buying last month, with the S&P/TSX Composite Index rising 3%. Meanwhile, the index is up 14.4% this year. However, the following three stocks are trading at a substantial discount, thus offering healthy buying opportunities.
WELL Health Technologies
WELL Health Technologies (TSX: WELL) develops technology and services that empower healthcare professionals to deliver positive patient outcomes. The company has been under pressure over the last few months, losing around 14.9% of its stock value compared to its July highs. Amid the correction, the company’s valuation looks attractive, with its NTM (next 12 months) price-to-earnings multiple at 15.9.
Further, the growth in virtual healthcare services, digitization of patient records, and increased usage of software solutions in the healthcare sector have expanded the addressable market for WELL Health. Meanwhile, the company focuses on developing innovative artificial intelligence-powered products to strengthen its market share. The healthtech continues to expand its footprint through acquisitions. After acquiring 10 clinics from Shoppers Drug Mart in June 2024, it acquired three primary care clinics in British Columbia and signed a definitive agreement to acquire three diagnostic imaging clinics in Alberta. Besides, it has over 50 clinics in pre-letter-of-intent review.
Along with these expansions, WELL Health has adopted several cost-cutting initiatives that could improve its profitability in the coming quarters. I believe WELL Health would be an attractive buy at these levels.
Lightspeed Commerce
Lightspeed Commerce (TSX: LSPD) has witnessed healthy buying over the last few days amid rumours that the company is exploring potential sales possibilities. Meanwhile, the company’s management has stated it is in the midst of a strategic review process and did not provide any specifics. Amid solid buying over the last few days, LSPD stock is trading 36.5% higher than last month’s low. Despite the recent surge, it trades 23.4% lower than its 52-week high, while its NTM price-to-sales multiple stands at 2.1.
Meanwhile, the growth in omnichannel selling has expanded Lightspeed Commerce’s addressable market. Besides, the company is expanding its product offerings to meet the various needs of customers, thus growing its customer base. Also, the growing average revenue per user could support its financial growth in the coming years. Further, its unified point of sales and payment offering has increased the adoption of its payment platform. Moreover, the omnichannel solution provider focuses on right-sizing its cost structure and improving its efficiency, which could boost its profitability. Considering all these factors, I believe Lightspeed Commerce could deliver oversized returns over the next three years.
BlackBerry
BlackBerry (TSX: BB) reported a healthy second-quarter performance for fiscal 2025, which ended on August 31. The company’s total revenue grew by 9.9% to $145 million. Solid performances from the IoT (Internet of Things) and cybersecurity segments boosted sales, with both segments beating their guidance. The company’s gross margins expanded by 40 basis points to 64.8% amid the gross margin expansion in the cybersecurity and licensing segments.
Further, BlackBerry has achieved breakeven adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and adjusted EPS (earnings per share). Meanwhile, I expect the uptrend in the company’s financials to continue. The IoT software firm secured several design wins in the second quarter, while QNX continues to resonate with automotive customers. Besides, the company is also strengthening its footprint in other verticles, such as General Embedded. It continues developing innovative products in the cybersecurity system, which could improve its market share amid rising competition.
Despite its solid second-quarter performance and healthy growth prospects, BlackBerry trades around 47% lower than its 52-week high, making it an enticing entry point for long-term investors.
