COVID-19 Market Crash: 2 Heavily Oversold Stocks to Buy Now

The coronavirus induced market crash has leveled the playing field for many investors and allowed them to invest in many oversold stocks at relatively fair prices.

| More on:

Great companies always attract investors, whether that means seasoned investors who understand the company’s strong fundamentals or novice investors attracted by the past performance. The result is that many amazing stocks become oversold relatively quickly. And while they continue to garner attention from other investors, value investors stay their hand from oversold stocks.

But no company is absolutely infallible, and the current market is testament to that. Right now, some of the most oversold stocks are trading at, and even below the fair value. If you didn’t buy them before, now might be a good time to take a piece of some of the most sought-after businesses on the TSX.

An asset management company

Brookfield Asset Management (TSX:BAM.A) is an alternative asset management company. It started its journey as a construction and electricity management company in Brazil 1899. Currently, it’s headquartered in Toronto and has a decently diversified portfolio made up of high-value and long-lasting assets. The total worth of assets under the company’s management is estimated at $540 billion.

The company’s 2000 assets span 30 countries, most of which are in North America, Europe, the Middle East, and South American countries, with Asia bringing the rear. And the assets are more than mere blips on the map.

The largest water company in Brazil, the third-largest power generation in Colombia, a leading healthcare group in Australia and the largest independent communication infrastructure business in France are but a few of the jewels in Brookfield’s crown.

The company still has a price-to-earnings ratio of 19.8, even with the share price down 26% from its peak value in Feb. Currently, the company is trading at $44.52 per share. It’s also a Dividend Aristocrat.

Even at the current discounted price, the country’s past growth looks attractive, with the five years returns coming out to about 59%.

A software company

While software is a relatively less potent sector on the TSX, some of the companies in it stand out. Like the decade-old aristocrat, Enghouse Systems (TSX:ENGH).

After falling about 17% in the past weeks, the current price of the company is at $45.5 per share, and the price-to-earnings is at 35 times. The company operates under three major divisions: communications, transportation, and networking.

The company is very generous with its donations. It increased its payouts by 125% in the past five years. It also rewards it with capital growth. The company’s CAGR for the past decade is an amazing 29%.

With its payouts and growth prospects, it’s easy to see why it’s such an oversold stock. But now is your chance to grab it at a near fair value.

Foolish takeaway

Market crashes present an amazing opportunity to buy good companies at dirt-cheap prices. And while Brookfield and Enghouse aren’t exactly trading near the bottom, the share prices are down more than they have been in years. If you planned to add these stocks to your portfolio, now might be an amazing time to grab them.

Should you invest $1,000 in TransAlta right now?

Before you buy stock in TransAlta, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and TransAlta wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends BROOKFIELD ASSET MANAGEMENT INC. CL.A LV and Enghouse Systems Ltd.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Canadian dollars in a magnifying glass
Dividend Stocks

If I Could Only Buy and Hold a Single Monthly Payer, This Would Be it

Long-term investors seeking monthly income should take a closer look at discounted Granite REIT for a generous yield.

Read more »

dividends can compound over time
Dividend Stocks

Is Fiera Stock a Buy for its Dividend Yield?

Fiera stock has one amazing dividend yield right now, but what else should investors consider?

Read more »

The sun sets behind a power source
Dividend Stocks

This Dividend Champion Has Paid Dividends for 51 Straight Years

All hail this dividend king for its proven potential to provide stable, reliable, and growing income.

Read more »

Person holding a smartphone with a stock chart on screen
Dividend Stocks

The Smartest Telecom Stock to Buy With $3,500 Right Now

Smart TFSA move? Telus stock shines for income & growth, outpacing rivals with a 7.7% dividend yield, two decades of…

Read more »

hand stacks coins
Dividend Stocks

I’d Put $7,000 in These Legendary Dividend Growers to Earn for the Next Decade

If you've got some cash for your TFSA, here are two stocks that should give you growing dividend income and…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Here’s How to Catch up to the Average Canadian TFSA at Age 45

The TFSA can create immense passive income, and this dividend stock is an excellent choice.

Read more »

edit Safe pig, protect money
Dividend Stocks

How I’d Secure My Retirement With a $7,000 Investment Today

If you have the discipline to invest with a long-term strategy, here’s how you can use $7,000 in a TFSA…

Read more »

Canadian flag
Dividend Stocks

TFSA: 3 Canadian Stocks to Buy and Hold for Life

The TFSA is the perfect place to create income for years, and these three are the best Canadian stocks to…

Read more »