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6 Canadian Stocks on Sale this Black Friday

All of these stocks are four- or five-star buys.

Ruth Saldanha 26 November, 2021 | 5:08AM
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Sale sign with gifts

Even though Canadian Thanksgiving was in October, many people up North keep a close eye on the U.S. holiday this week – mainly in anticipation of Black Friday sales. But this 2021 holiday season, with supply chain issues, a robust labour market leading to better-paying jobs for employees, and therefore rising inflation and prices, everyone is trying to save money on the best deals.

Why should your portfolio be any different?

Morningstar behavioural research Samantha Lamas points out that research finds that we tend to spend more when shopping with a coupon, because of mental accounting.

“According to the theory of mental accounting, instead of viewing money as completely interchangeable, we see money differently based on its origin or how we plan to spend it,” she explains. She offers three tips to help avoid mental accounting mistakes.

  1. Be aware of mental accounting tendencies. “It's OK to get excited about a new coupon in your inbox, but try to reframe that excitement. Instead of thinking of it as free money to use on your next purchase at that store, try to view it as money that is now available to put toward any category in your budget - including savings,” she says.
  2. Use mental accounting to your advantage. According to Lamas, it is good to make a mental account for any "free money" you receive in a month, saying, “Maybe you decide that any money you save by using coupons will go straight to your savings account. Just make sure you plan this process out before you receive or use any coupons. (It may be harder to practice self-control otherwise!).”
  3. If in doubt, unsubscribe. “If you notice that you can't seem to control your spending decisions after receiving promo emails, it's OK to unsubscribe. ‘Limited time deals’ or ‘20% off’ can be great, but they can also be dangerous. Because of the way our minds organize our financial resources into mental accounts, these coupons may actually prompt us to spend more--but they don't have to,” she says.

So now, armed with these mental accounting tips, if you have some money to spare, and would like to invest, what should you buy? Let’s look for some cheap stocks.

Before we get to the list, what is ‘cheap’? To decide, we look at the Morningstar Fair Value Estimate, for the long-term intrinsic value of a stock. Morningstar calculates the fair value estimate of a company based on how much cash we think the company will generate in the future. Based on the fair value estimate, the stocks will earn a Morningstar Star Rating. The rating is determined by three factors: a stock's current price, Morningstar's estimate of the stock's fair value, and the uncertainty rating of the fair value. The bigger the discount, the higher the star rating. Four- and 5-star ratings mean the stock is undervalued, while a 3-star rating means it's fairly valued, and 1- and 2-star stocks are overvalued. Six stocks made the cut.

Here’s the list:

Name

Ticker

Morningstar Star Rating

Curaleaf Holdings

CURA

5

Green Thumb Industries

GTII

5

CNOOC Ltd ADR

CNU

5

Canopy Growth Corp

WEED

4

Tilray Inc

TLRY

4

Cronos Group Inc

CRON

4

Five of the six are cannabis companies, while one is in oil and gas. None of them earn a Morningstar Economic Moat Rating, which represents a company's sustainable competitive advantage. Moreover, the fair value uncertainty for all of these stocks is ‘Very High’, meaning our analyst is not very confident in the fair value estimate.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Canopy Growth Corp4.89 CAD-16.55Rating
CNOOC Ltd ADR  
Cronos Group Inc4.19 CAD-11.60Rating
Curaleaf Holdings Inc9.13 CAD-11.36Rating
Green Thumb Industries Inc18.88 CAD-11.53Rating
Tilray Inc5.53 CAD-12.50Rating

About Author

Ruth Saldanha

Ruth Saldanha  Editorial Manager at Morningstar.ca. Follow her on Twitter @KarishmaRuth.

 
 
 

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