Although the Consumer Price Index of the United States rose higher than analysts’ forecast in September, the S&P/TSX Composite Index has continued its upward momentum and hit a new all-time high yesterday. The Index is trading 16% higher this year. However, the following three TSX stocks are trading at a considerable discount compared to their 52-week high, making them enticing buys.
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WELL Health Technologies
WELL Health Technologies (TSX: WELL) has witnessed healthy buying over the last few months, with its stock price rising over 30% from its April lows. Its solid quarterly performances, the raising of 2024 guidance, and improvement in broader equity markets drove WELL’s stock price. Despite the healthy buying, the company trades at around a 54% discount compared to its 2021 highs. Also, its valuation looks attractive, with its NTM (next 12 months) price-to-sales and price-to-book multiples at 1.1 and 1.2, respectively.
Besides, the growing adoption of telehealthcare services, digitization of patient records, and increased usage of software services in the healthcare sector have expanded the addressable market for WELL Health. The company is continuing to expand its footprint through acquisitions. Recently, it has acquired 10 clinics in British Columbia and Ontario from Shoppers Drug Mart and three primary care clinics in British Columbia. Further, it is working on acquiring 50 more clinics. Moreover, the company is developing artificial intelligence (AI)-powered products that can help strengthen its market share. Considering all these factors, I expect WELL Health to deliver oversized returns over the next three years.
Docebo
Docebo (TSX: DCBO) offers organizations a highly customizable learning platform to scale their business by providing personalized learning. In August, the company reported impressive second-quarter performance, with its top line growing 22%. The addition of 307 customers over the last four quarters and an increase of 9.7% in its average contract value drove its revenue. Besides, its adjusted EPS increased by 85.7%, while its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) margin expanded from 7% to 15%.
Supported by its solid Q2 performance, the company’s stock price has increased by 19.3%. However, it still trades around 18% lower than its March highs, thus offering opportune buying opportunities for long-term investors. Meanwhile, analysts are projecting that the global LMS (learning management system) market will grow in double digits for the rest of this decade. Amid the expanding addressable market, the company continues to develop innovative features and make strategic partnerships, which could boost its financials in the coming years. Besides, over 80% of its customers have signed multi-year contracts, thus providing financial stability.
Lightspeed Commerce
Amid rumours of a potential sale, Lightspeed Commerce (TSX: LSPD) has witnessed healthy buying over the last few weeks, with its stock price rising by over 35% compared to last month’s low. Despite the recent increase, the company still trades at a 23% discount to its 52-week high. Besides, its valuation looks reasonable, with its NTM price-to-sales multiple at 2.1.
The growing popularity of the omnichannel selling model has increased Lightspeed Commerce’s addressable market. Meanwhile, its innovative AI-powered products have expanded its retail, hospitality, and golf business client base. Further, the company’s unified POS (point-of-sales) and payments platform has increased the adoption of its payment platform. Along with these growth initiatives, the company is focused on improving its profitability and has undertaken several cost-cutting initiatives. Considering all these factors, I believe Lightspeed Commerce would be an excellent long-term buy.
