Three undervalued Canadian stocks

These stocks are trading at considerable discounts to our fair value estimates

Vikram Barhat 16 October, 2019 | 1:25AM

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As the less than cheery economic data continues to roil global markets, now may be a good time for Canadian investors to look for opportunities closer to home. It helps that Canadian stocks are trading at far more attractive valuations relative to their peers south of the border despite the fact that the S&P/TSX Composite Index has racked up 17% gains, matching the 18% return for the S&P 500, for the year to date, as of Oct 10.

While Canadian companies are not entirely immune from short-term macroeconomic events, quite often their undeniable growth prospects are drowned out by short-term noise. Prudent investors may want to scour their own backyard for long-term investment opportunities that offer value and portfolio stability.

Morningstar’s Canadian coverage universe has some names with sizeable price mismatch between their market price and fair value, underscoring their potential for price appreciation. These companies with stable cash flows, healthy balance sheets and generous dividend payouts could be the perfect vehicle to ride out market’s yo-yo swings. 

Nutrien Ltd

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Canadian Natural Resources Ltd39.11 CAD0.77
Magna International Inc Class A67.44 CAD-0.71
Nutrien Ltd54.59 CAD-0.13

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.