Stock markets are often considered as one entity and most often as one entity. When it crashes, almost every company is affected. Most businesses suffer from the consequences of a recession. However, not all sectors, industries, and individual companies are recovering at the same pace, as evidenced by the recovery from the 2020 crash. Even within the industry, there may be a full range of recovery.
Some will lead the recovery, while others will lag behind. There are several possible reasons behind this, but it’s not necessarily bad for investors. It offers you the opportunity to buy a company that is still undervalued and relatively discounted.
BTB REIT (TSX: BTB.UN) owns 64 commercial properties in Quebec and Ontario. The portfolio consists of office, industrial, and retail properties (that is, three sections that did not work very well during the pandemic). That’s probably why the company is struggling to recover its pre-pandemic stock price and is still available at a 28% discount.
The price-earnings ratio is 6.1 and the price-to-book value ratio is only 0.7 times, so the stock price is not only discounted. It is also underestimated. Ironically, REIT revenues haven’t suffered much, with revenues in the three quarters dropping by up to $ 2-3 million compared to the previous quarter of 2019.
One of the reasons investors were fascinated by the stock was that it cut dividends by about 28.5% in May 2020.However, even if the payout ratio is declining (and the payout ratio is stable), REITs are now Appetizing 7.69% yield. This may not be reduced immediately. This heavily discounted dividend stock should be on your radar.
Discounted gold inventory
With the overall stock market recovering and the economy recovering, gold stocks aren’t attracting investors like they were last year.That’s probably the reason behind B2 goldof (TSX: BTO)(NYSE: BTG) It decreased by 41% from the peak in August 2020. However, if your price-earnings ratio is only 7.6 and you are trading at a decent yield of 3.8%, you have the option to buy this discounted stock.
Such yields are rare for gold stocks, but they are not the main attraction of this discounted golden share. Inventories have risen at a steady pace over the last five years. Even today, if well below the recent peak, the stock will have a CAGR of 32% over a five-year period. If it reaches its lowest point and resumes its normal pre-pandemic growth pace, this small gold stock can bring a lot of growth to the portfolio.
Don’t forget when looking for cheap inventory Buffett’s advice: “It’s much better to buy a great company at a fair price than to buy a great company at a great price.” Especially if you plan to hold that asset for a very long time. Underestimation and discounts are not the only benefits to look for in value investment.
Stupid contributor Adam Ottoman There are no positions in any of the listed stocks.
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