4 best Canadian undervalued stocks to buy in 2021-22

Summary

  • Publicly listed firms that have lower valuation and price-to-earnings (P/E) ratios are considered to be in the undervalued category.
  • Senvest Capitals’ stock has gained over 208 per cent.
  • Stocks of E-L Financial Corporation have one-year returns of 40 per cent. Its price-to-earnings (P/E) ratio is 2.2.
  • Apollo Healthcare’s share price fell 43 per cent in the last one year despite posting positive net income in the first quarter of 2021.  

Publicly listed firms that have lower valuation and price-to-earnings (P/E) ratios are considered to be in the undervalued category.

Some such undervalued stocks on the Toronto Stock Exchange (TSX) have the potential to grow in future and are likely to hit their pre-COVID value this year, guided by improving fundamentals. 

Let’s explore these stocks to that could add value to your portfolio in 2021-22.

Senvest Capital Inc. (TSX: SEC) 

Financial firm Senvest Capital Inc, which operates in equities and real estate across North America, saw its stocks close trading at a value of C$ 385.53 apiece on Thursday, July 8. The company posted a market cap of C$ 976 million, a P/E ratio of 0.90, and earnings per share (EPS) of C$ 434.31, as per TMX. 

Senvest Capital Inc posted a profit of around C$ 574 million in the first quarter of 2021, which was a sharp rise compared to a net loss in Q1 2020.

Senvest Capital stock grew more than 121 per cent year-to-date (YTD). It has yielded over 208 per cent in one year. 

At its previous close, the share price was up against its 200-day simple moving average (SMA) and 30-day SMA by 58 per cent and 3.53 per cent, respectively. The company is likely to record a robust price performance as the impact of the COVID-19 pandemic slowly unwinds.

E-L Financial Corporation Limited (TSX: ELF)

The mid-cap insurance firm engages in insurance and investments through its two segments, Empire Life and E-L Corporate. It has a market cap of C$ 3.56 billion.

E-L Financial Corporation Limited pays a quarterly dividend of C$ 2.50 per common share, presently at a dividend yield of 1.042 per cent, as per TMX. 

The insurance stock closed trading at C$ 960 apiece on July 8, with a P/E ratio of 2.20. However, its return on equity stands at 26.09 per cent.

E-L Financial Corporation stock climbed up 40 per cent in the last one year. At the previous close, the stock was up 16.67 per cent against the 200-day SMA. It was marginally up by 1.24 per cent compared with 30-day SMA. 

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Apollo Healthcare Corp. (TSX: AHC)

The Ontario-based consumer packaged goods provider is one of the leading personal care products producers across North America.

The C$ 205-million market cap company held a P/E ratio of 2.30 and EPS of C$ 1.18, as per TMX. As per its closing share price on July 8, the scrip was down almost 43 per cent YTD. It was trading 51 per cent lower than its one-year high of C$ 5.75 apiece (December 8, 2020). 

Apollo Healthcare reported a revenue of C$ 51.1 million in Q1 2021, posting an increase of 10 per cent year-over-year. 

Aimia Inc. (TSX: AIM)

Aimia Inc, a business service firm, offers customer loyalty programs and marketing solutions. Aimia registered a profit of C$ 1.7 million in Q1 2021, noting a surge of C$ 5.7 million against a net loss in Q1 2020. 

Its shares closed at a value of C$ 4.79 apiece on July 8, with a P/E ratio of 0.6 and an EPS of C$ 6.14. 

As per this closing price, Aimia stock was up 8.85 per cent against its 200-Day SMA. It was trading flat against its 30-day SMA. 

The industrial stock fell by about 11 per cent in the last three months. It has declined over 14 per cents against its one-year high of C$ 5.58 apiece (March 26, 2021). 

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.

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