Despite the strong recovery in the Canadian stock market over the last nine months, few undervalued stocks can offer excellent returns over the next three years. In this article, we’ll look at three such companies.
Kinaxis (TSX: KXS) We provide cloud-based solutions to help supply chain companies plan and make decisions. Since its launch in June 2014, the company’s growing demand for its products and services has generated a high revenue of approximately 1,300%. In the first three quarters of 2020, the top line was up 25.1% year-on-year and adjusted EBITDA was up 20.4%.
On the other hand, the rise in Kinaxis’s share price is likely to continue given its high growth prospects.The company has projection The market for supply chain management solutions will grow at an annual rate of 22.4% from 2017 to 2022. In addition, most of Kinaxis’s customers have signed long-term contracts, with backlog revenue of $ 364.7 million, demonstrating continued growth.
Kinaxis may also benefit from a structural shift to growth in online shopping and e-commerce sales. The company is expanding its product portfolio by adding innovative solutions that allow it to attract new customers and increase average revenue per customer. Despite these growth prospects, the company is trading 19.3% below its 52-week high, offering excellent buying opportunities.
Since then PfizerAnnouncement on the effectiveness of the vaccine in preventing the spread of COVID-19 on November 9. Barrick gold (TSX: ABX)(NYSE: GOLD) I lost more than 20% of the stock price. With the expectation of returning to pre-pandemic methods in the development of vaccines, investors have moved from safe paradise such as gold to dangerous asset classes and reduced the price of gold. Due to the gold price revision, the stock prices of gold mining companies, including Barrick Gold, fell.
Meanwhile, an increase in COVID-19, a slower economic recovery, and a weaker US dollar could raise gold prices and benefit Barrick Gold. The company increased its gold production by strengthening its mining business. Copper is also the company’s main source of revenue. As economic activity improves, demand for copper may increase, boosting the company’s finances.
Barrick Gold also strengthened its balance sheet by significantly reducing debt levels through strong cash flow and the sale of non-core assets. The price-earnings ratio is 21, and its valuation also seems reasonable. The company pays a quarterly dividend of $ 0.09 per share, equivalent to a dividend yield of 1.2%.
But Suncor Energy (TSX: SU)(NYSE: SU) Having witnessed strong buys since November 9, the company is still trading about 45% below its pre-pandemic price, offering excellent buying opportunities. The price-to-book value ratio and the price-to-book value ratio of the forward price are 0.7 and 0.9, respectively, and their valuations also look attractive.
Suncor Energy’s management is able to maintain its business and pay dividends, even if WTI crude is just below US $ 40 a barrel, thanks to its integrated business model and long-lived, low-decrease assets. I’m expecting it. WTI crude oil trading is well above $ 50 and is expected to hit solid numbers in the coming quarters. The company also expects overall production to increase by 10% in 2021 while operating expenses decrease by 8%. Its downstream utilization could rise to 93%, which is promising.
In the wake of last year’s plunge in oil prices, Suncor Energy has cut dividends significantly. However, the current dividend yield is 3.7%, which is sound. Given improved investment indicators, rising oil prices and attractive valuations, I think Suncor Energy can bring oversized returns this year..
Meanwhile, see the report below for the top 10 stocks to buy this month.
Ian Butler, a well-known Canadian investor, has nominated 10 shares for Canadians to buy today. So if you’re tired of reading about getting rich in the stock market, today may be a good day for you.
The Motley Fool Canada offers 65% off the list price of the best stock selection services, plus a full money-back guarantee on payments for the services. Click here to find out how to take advantage of this.
Motley Fool recommends KINAXIS INC. Fool contributor Rajiv Nanjapla does not have a position in any of the shares mentioned.
Did you get $ 3,000?Buy these three undervalued TSX shares for oversized returns
https://www.fool.ca/2021/01/25/got-3000-buy-these-3-undervalued-tsx-stocks-for-oversized-returns/ Did you get $ 3,000?Buy these three undervalued TSX shares for oversized returns