Looking for Rebound Plays? 3 TSX Stocks That Dropped 50% Recently

Top TSX stocks: Here are three darling stocks of Canadian investors that have plunged more than 50% in the last few weeks.

Although markets are trading close to record levels, some TSX stocks have been weak since last month. Here are three darling stocks of Canadian investors that have plunged more than 50% in the last few weeks. Let’s take a look at whether it makes sense to bet on these beaten-down names at current levels.

Ballard Power Systems

Fuel cell maker Ballard Power Systems (TSX:BLDP)(NASDAQ:BLDP) stock fell from its record levels of $54 to $28 in the last six weeks. Several factors drove the steep fall.

The company raised new equity capital last month by selling almost 15 million common shares. Fresh equity issuances dilute existing shareholder ownership. Thus, investors’ disdain was evident. Also, its weaker Q4 numbers also added to investors’ woes. Ballard Power reported a 32% fall in Q4 revenues, which widened the losses.

Fuel cell stocks were on a roll early this year, driven by exuberance for alternative fuels and electric vehicles. Fuel cells, which convert hydrogen into electricity, are a cleaner method to generate energy against oil and gas combustion. Though hydrogen fuel has immense growth prospects, the industry is still in the nascent stage. Companies like Ballard Power have seen volatile top-line growth and are rarely profitable.

BLDP stock is still sitting on handsome gains of 170% for the last 12 months. However, it looks notably overvalued even after a recent fall. That’s mainly because investor enthusiasm drove the stock for months. Given its current valuation, I think the stock will likely face more downward pressure in the short to medium term.

B2Gold

One of the top gold miner stocks, B2Gold (TSX:BTO)(NYSE:BTG) has also been notably weak recently. It has halved in the last six months and dug a deep hole in investors’ pockets.

As the yellow metal lost its sheen in the last few months, gold miner stocks tumbled to their record lows. It was a double whammy for B2Gold, as political risks also rose in one of its key mining areas. It operates several mining assets in Mali, Namibia, and the Philippines. BTO shares traded lower recently, as the Mali government did not renew the company’s exploration permit of one of its key assets.

B2Gold is a fundamentally strong company with no debt and solid profitability trend. Its net income last year more than doubled amid higher production and rallying gold prices. I think the stock looks extremely undervalued compared to its historical average as well as the industry average.

Aurora Cannabis

Once investors’ favourite top pot stock Aurora Cannabis (TSX:ACB)(NYSE:ACB) is down 55% since mid-February. Cannabis stocks zoomed early this year amid the Biden administration’s support to the industry and the subsequent U.S. legalization prospects. However, Aurora Cannabis is one of the biggest wealth destroyers in the pot space, losing more than 93% of its market cap in the last two years.

Aurora Cannabis reported revenue growth of 23% year over year in Q4 2020. The top-line number was pleasing, as both its recreational and medical segments reported growth. However, the company’s losses widened in the quarter, and the management also failed to deliver positive EBITDA as promised earlier.

Apart from concerning revenue growth, Aurora Cannabis’s high cash burn rate could also bother investors. The stock remains a risky bet for conservative investors. Further downside in ACB stock can’t be ruled out completely based on its current valuation.

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 Vineet Kulkarni has no position in any of the stocks mentioned.

More on Dividend Stocks

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »