5 TSX under $20 stocks beginners could watch this year

Being new to the stock market may be overwhelming sometimes. If you know how to tap the market is never short of opportunities. As a new investor, put in your efforts to add the stocks that meet your investment criteria. Different investors operate in the market with different goals. Enter with a long-term approach that facilitates the building of your generational wealth.

As a beginner, keep away from risks. Your approach should also involve the dimension of stable and maximum gains. Your initial investment and approach may lay the foundation of your long investment journey.

The market is dependent on several factors. Before entering, study and analyze all the trends and form your strategy accordingly. Macro-economic factors such as inflation and high-interest rates define the market movement. Before selecting your stocks, assess these factors and keep them in mind. Here are five stocks to assess their overall performance along with their recent financial highlights:

1. Magellan Aerospace Corporation (TSX: MAL)

Magellan Aerospace caters to the aerospace industry by supplying them with the components and giving them aftermarket support. The company has two product groups: aerostructures and aero-engines. It serves defense as well as commercial markets.

In Q3 2022, Magellan’s gross profit increased to C$ 12.57 million from C$ 10.58 million in Q3 2021. The company's net income rose to C$ 563,000 from C$ 458,000 for the same comparative period. The revenue grew to C$ 191.09 million from C$ 166.42 million. The total assets soared to C$ 1,024.88 million from C$ 1,003.81 million. On the other hand, the liabilities declined to C$ 96.77 million from C$ 104.34 million.

The quarterly dividend of the company is C$ 0.025 per share with a dividend yield of 1.408 per cent. The five-year growth was reported at 10.97 per cent.

2. Absolute Software Corporation (TSX: ABST)

Absolute Software provides security and management of computing devices by marketing and developing cloud-based endpoint visibility and control platforms.

The company has a presence in Canada and gets its majority of revenue from the US. It caters to Government, healthcare, Professional and financial services.

In Q1 of the fiscal year of 2023, Absolute’s total revenue rose to US$ 53.6 million from US$ 43.7 million in Q1 2022.

The cash from operating activities increased to C$ 15.2 million compared to cash used in operating activities of C$ 0.6 million for the same comparable period.

The adjusted gross margin was reported at US$ 47.7 million compared to US$ 43.9 million. The cash and cash equivalents soared to US$ 67.24 million from US$ 63.66 million. The company pays a dividend per share of C$ 0.08 and the dividend yield was noted at 2.574 per cent.

3. StorageVault Canada Inc. (TSX: SVI)

StorageVault Canada Inc. is based in Canada and operates and leases storage to customers at the commercial and individual levels. The company has a segments-Self Storage segment that rents property for long-term or short-term along with vehicle storage space. The second one is the Portable Storage segment providing portable storage to customers. Thirdly, the Management Division consists of store management revenue owned by third parties.  

SVI stock  jumped by 21.22 per cent QTD. In Q3 2022, its revenue rose to C$ 69.3 million from C$ 56.85 million in Q3 2021. The net operating income grew to C$ 49 million from C$ 38.8 million for the comparative period. The adjusted funds flow from operations increased to C$ 21.3 million from C$ 17.05 million.

4. Algonquin Power & Utilities Corp. (TSX: AQN)

Algonquin Power & Utilities Corp. has a subsidiary-Liberty and has two business groups- Renewable Energy Group and the Regulated Services Group. The company provides sustainable and cost-effective water and energy solutions. Algonquin has its presence in Canada and the US.

In Q3 2022, Algonquin’ revenue increased to US$ 666.7 million from US$ 528.6 million in Q3 2021.

The adjusted EBITDA rose to US$ 276.1 million from US$ 252 million for the same comparative period. The adjusted funds from operations grew to US$ 205.5 million from US$ 170.2 million.

With a five-year dividend growth of 8.85 per cent, Algonquin Power announced a dividend of US$ 0.181 per share to its shareholders. The EPS of the company is US$ 0.39 with a P/E (price-to-earnings) ratio of 26.4.

5. Cineplex Inc. (TSX: CGX)

Cineplex Inc. is a media company that operates movie theatre chains with a total market capitalization of C$ 636.79 million. The company has four segments- location-based entertainment, film entertainment and content, amusement and leisure and media.

In Q3 2022, Cineplex’s total revenue grew to C$ 339.83 million from C$ 250.38 million in Q3 2021. The company reported a net income of C$ 30.85 million versus a loss of C$ 33.55 million for the same comparable period. The adjusted EBITDA increased to C$ 63.09 million from C$ 48.6 million. The adjusted free cash flow rose to C$ 1.56 million from a loss of C$ 5.75 million.

The EPS of Cineplex in two different quarters:

Bottom Line

Your investment is directly proportional to your understanding of the market. Try to dive in deep and analyze several factors that may affect your portfolio’s growth. This way, you may bring stability to your portfolio and mitigate its risk. Also, while entering the market, keep in mind the diversification aspect. Adding different stocks will spread the risks and mitigate them.

Also, it is vital to reposition your portfolio from time to time. With changing market trends and economic conditions, different stocks may perform differently. Hence, be vigilant while moving on your investment journey.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.