Easing trade tensions between the United States and China has improved investors’ sentiments, driving the global equity markets. Meanwhile, the S&P/TSX Composite Index rose 11.8% from last month’s lows. Despite the recent increases, the following three stocks still trade at a substantial discount compared to their 52-week highs, thus offering excellent buying opportunities.
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Celestica
First on my list is Celestica (TSX: CLS), which reported an impressive first-quarter performance last week, exceeding its guidance. The supply chain solutions provider posted a revenue of $2.65 billion, representing a 20% increase from the previous year. A 28% growth in its CCS (Connectivity & Cloud Solutions) segment, with Hardware Platform Solutions posting a 99% revenue growth, boosted the company’s sales. Its other segment, ATS (Advanced Technology Solutions), posted a 5% year-over-year growth during the quarter.
Supported by topline growth, expansion of adjusted operating margin from 5.9% to 7.1%, and repurchasing 0.6 million shares for $75 million, Celestica reported a solid 44.6% increase in its adjusted EPS (earnings per share). Moreover, the company’s growth prospects look healthy amid rising investments in artificial intelligence-related infrastructure. These investments could increase demand for the company’s storage, computing, and networking solutions, thereby supporting its financial growth.
Meanwhile, Celestica’s management raised its 2025 guidance after posting better-than-projected first-quarter performance. Its new revenue guidance represents 12.4% year-over-year growth, while its adjusted EPS could increase by 28.9%. Despite its healthy growth prospects, Celestica trades at 0.9 times analysts’ projected sales for the next four quarters, making it an attractive buy.
goeasy
goeasy (TSX: GSY), which offers leasing and lending services to subprime customers, is my second pick. The subprime lender has been growing its financials at a healthy rate for the last 10 years, supporting its stock price growth. Over the past 10 years, its revenue and adjusted EPS have grown at a 19.4% and 28.7% CAGR (compound annual growth rate), respectively. Despite its solid growth, the company has acquired around 2% of the $231 billion Canadian subprime market, providing a solid scope for expansion.
Given its full range of product offerings, strategic initiatives to expand its auto financing business, multiple distribution channels, and geographical expansion, goeasy could continue to expand its loan portfolio, boosting its financials. The company’s management anticipates its loan portfolio will grow by approximately 65% over the next three years. Amidst loan portfolio expansion, its revenue could grow at an annualized rate of 11.3%, while its operating margin could increase to 43% by 2027. The company has also increased its dividends at an annualized rate of 29.5% over the last 11 years, with its forward yield currently standing at 3.75%. Moreover, the company’s valuation appears attractive, with its NTM (next-12-month) price-to-earnings multiple at 8.1.
Shopify
My final pick is Shopify (TSX: SHOP), which has witnessed healthy buying over the last few days. Its stock price rose 32% compared to its previous month’s lows. Despite the recent surge, it trades at a 28.6% discount compared to its 52-week lows. Meanwhile, the company’s addressable market continues to rise as more businesses adopt omnichannel selling modes.
Moreover, Shopify has increased its research and development investments to develop innovative products that would meet the growing needs of its customers. Additionally, the company will focus on strengthening its business-to-business, international, enterprise, and offline businesses this year. Along with these growth initiatives, the growing adoption of payment solutions and geographical expansions could support its financial growth in the coming quarters. Given its healthy growth prospects and discounted stock price, I am bullish on Shopify.
