2 Canadian Stocks Near 52-Week Lows

Canadian stocks have been soaring, but some stocks, like Facedrive Inc (TSX:FD), remain near 52-week lows.

| More on:

Stocks aren’t as cheap as they used to be. After a year of nearly uninterrupted gains, they’ve gotten more expensive than they were before — both in raw price and relative to earnings. As of Tuesday, the S&P 500’s P/E ratio (according to Ycharts) was 39.9. That’s a historically high multiple, and it’s even higher for some individual stocks that make up the index. But that doesn’t mean there aren’t cheap stocks out there. There are plenty of TSX stocks trading at low multiples and historically low prices, if you know where to look. In this article, I’ll explore two TSX stocks that are trading near 52-week lows.

Facedrive

Facedrive (TSX:FD) is a tech stock that currently trades for $14.6. Its lowest price in the last 52 weeks was $7.38. You might be wondering how that’s “near 52-week lows,” but it becomes apparent when you look at the chart. At its highs for the year, FD stock cost about $60. So, relatively speaking, its $14.6 price is near the 52-week low — despite being nearly double it.

If you’re looking for an ultra-risky tech play, FD might make the grade. It’s a company without much of a history, and it is not profitable. It did grow its revenue by 1,000% year over year in one recent quarter, but it was starting from a tiny base amount. It faces a lot of competition from Uber and Lyft. I’m not the biggest fan of this company, but it is way down from its highs for the year. Some dip buyers might be interested.

Canadian National Railway

Turning towards less-risky stocks, we have Canadian National Railway (TSX:CNR)(NYSE:CNI). This is a railroad company that ships over $250 billion worth of goods per year. Its stock soared in 2020, as investors sought investments that could survive the COVID-19 pandemic unscathed. Rail shipping is a classic “essential service,” so CNR stock looked good at the time. Since then, it has given up much of its gains. Its current price of $127.24 is just 10% above its 52-week low of $116.

Why has CNR fallen this year?

One possible reason is that it had gotten overvalued in the prior year. When it was up to $150, CN stock was trading at nearly 30 times earnings. That’s pretty expensive for an asset that’s far from a growth stock. Another possible reason is the upcoming acquisition of Kansas City Southern. CN recently won a bidding war to acquire that company; to do so, it had to offer an inflated price. Perhaps the markets think CN is overpaying and are punishing it for doing so.

Foolish takeaway

These days, it’s hard to find cheap stocks with a lot of potential. But it’s possible if you look. By carefully scouring the markets, you can find plenty of stocks that are cheap by historical standards. The two stocks mentioned in this article fit that description well. No, that doesn’t mean that they’re guaranteed to perform well. But it does go to show that there are plenty of dips to buy — even in 2021.

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 Andrew Button owns shares of Canadian National Railway. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. The Motley Fool recommends Canadian National Railway and Uber Technologies.

More on Dividend Stocks

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »