The tariff war has escalated, making investors nervous and dragging the valuations of several companies lower. However, given historical trends, investors should view every market correction as a long-term buying opportunity.
While the equity markets are expected to remain volatile in 2025, those with a sizeable risk appetite can buy and hold undervalued stocks to benefit from outsized gains when investor sentiment turns bullish. In this article, I have identified two cheap TSX stocks you can buy right now.
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Is the TSX mining stock a good buy?
MAG Silver (TSX: MAG) is a Canadian mining company valued at $2.34 billion. It reported impressive third-quarter 2024 results, highlighted by record cash flow and significantly reduced production costs at its flagship Juanicipio mine in Mexico.
The silver mining company posted a net income of US$22.3 million ($0.22 per share), driven by its 44% equity interest in the Juanicipio joint venture, contributing US$25.6 million to MAG’s bottom line. Moreover, MAG’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) reached US$55.7 million for the quarter.
Juanicipio processed 332,290 tonnes of ore with a silver head grade of 481 grams per tonne during Q3, producing 4.9 million ounces of silver and 7.1 million ounces of equivalent silver. The operation achieved impressive metallurgical recovery rates of 95%, up from 88% in the same period last year.
The mine’s operating efficiency continues to improve, with cash costs dropping to negative US$0.12 per silver ounce sold, compared to US$4.68 in the year-ago period. All-in-sustaining costs also decreased substantially to US$3.28 per silver ounce from US$9.19 last year. Juanicipio generated a strong operating cash flow of US$109.8 million and a free cash flow of US$96.9 million during the quarter.
“Building on the robust cost performance of the first half of 2024, Juanicipio continued to improve,” the company stated in its release. Management expects silver grades to be at the top end of the revised guidance range for 2024.
The joint venture returned US$22.6 million to MAG in loan principal and interest payments, boosting the company’s cash position to US$113.5 million with no long-term debt.
Priced at 28.2 times forward earnings, MAG stock trades at a discount of over 20% to consensus estimates.
Is this TSX stock undervalued?
Another cheap TSX stock is Secure Waste Infrastructure (TSX: SES), formerly known as Secure Energy Services. The company reported stellar financial results for the fourth quarter and full year 2024, demonstrating the resilience of its business model despite divesting 29 facilities earlier in the year.
Secure delivered adjusted EBITDA of $490 million for 2024, reaching the top end of its guidance. While EBITDA was down 17% year over year, Secure maintained a margin of 35%, reflecting the efficiency of its long-life assets and disciplined cost management.
Secure generated $316 million in discretionary free cash flow with a 64% conversion rate, allowing it to return significant capital to shareholders through a share-buyback program and quarterly dividends.
In 2024, SES repurchased 57.3 million shares (19% of outstanding shares) at an average price of $11.47 and paid $104 million in dividends, representing a 2.7% yield.
Secure’s strategic focus remains on waste management and energy infrastructure. Key growth initiatives include expanding its Clearwater heavy oil terminal and Montney water pipeline system and making a strategic acquisition in metal recycling.
Looking ahead to 2025, Secure expects adjusted EBITDA of $510-540 million, representing a 10% increase at the midpoint from 2024 pro forma results.
Priced at 13.3 times forward earnings, the TSX stock trades at a discount of 30% to consensus targets.
