3 TSX Stocks Under $5 That Are a Legit Value Today

These three TSX stocks may be in a bad way right now, but have the ability to surge out of this downturn and create incredible returns for investors.

| More on:

Image source: Getty Images

There are cheap stocks, and then there are far below averages, super-undervalued, incredibly cheap stocks. The TSX stocks I’m going to discuss today are definitely in that category. Each trades under $5 per share, and offers insane value on the TSX today.

The main issue regarding these three TSX stocks? Each is in a sector that’s doing quite poorly, and could do even worse in the year to come. On the surface, that looks like bad news. But long-term investors should know better.

If you hold these three TSX stocks far longer, you’re bound to see shares not only improve, but soar past the $5 share price they currently offer.

Canopy Growth

First up we have former heavy hitter Canopy Growth (TSX:WEED). Canopy Growth stock hit all-time highs near $70 per share before falling into oblivion. And what’s more, things seem to have gone from bad to worse. Not only was it one of the only cannabis producers to still not produce a profit, it seems be undergoing layoffs and cost cutting quarter after quarter.

But it’s not all bad news. After news that there would be pardons from the White House for simple marijuana possession, Canopy Growth stock moved forward with their plan to take over the U.S. cannabis market.

Further, the company also has profitable avenues such as sports drinkmaker BioSteel working for them. In this case, in the next decade, Canopy Growth stock could narrow in on some new profit-producing ventures, while taking on the largest cannabis market in the world.

Canopy Growth stock is one of the TSX stocks trading below $5 at $3.15 per share as of writing. Shares are down 64% in the last year.

Dorel

Another company that’s seen a major drop in the last year is Dorel Industries (TSX:DII.B). The company made a huge move during the pandemic, selling off its biking sector for a major cash infusion.

With those bicycle days long gone, Dorel is now focusing on home and baby products. These aren’t products that are top of mind during a recession. The company has missed estimates quarter after quarter, sending shares in a downward spiral.

So, let’s focus on the future. Now Dorel stock is definitely undervalued. It trades at just 0.35 times book value as of writing! When inflation gets under control and we come out of a recession, analysts practically guarantee a surge in share price. Definitely higher than the $4.65 where it trades right now. Meanwhile, shares are down 60% in the last year alone.

Ensign

Finally, Ensign Energy Services (TSX:ESI) is one of the TSX stocks I would certainly consider that’s under $5 on the TSX today. But here’s the twist, Ensign stock has actually been doing quite well over the last few years.

With the bump in oil and gas prices, Ensign stock climbed for investors. In fact, shares are still up by 24% in the last year alone! Even so, with share prices so low investors will likely continue to feed into the stock whenever there is strength in the oil and gas sector.

Analysts predict its current $3.19 share price could actually double in the next year alone. So I would certainly consider buying this stock for a quick turnaround over the next few years.

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 Amy Legate-Wolfe has positions in Canopy Growth. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 No-Brainer Data Centre Stocks to Buy With $500 Right Now

Data centres are going to be a huge growth opportunity in the next decade. And these are the top buys.

Read more »

Paper Canadian currency of various denominations
Bank Stocks

1 Magnificent Canadian Dividend Stock Down 28% to Buy and Hold for Decades

This top Canadian dividend stock is underperforming its large peers this year, but a turnaround could be on the horizon.

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 »

hand stacks coins
Investing

Secure a Wealthy Future With These 3 Canadian Stocks

These Canadian stocks have the potential to appreciate substantially over time and may also enhance returns through dividend payments.

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

analyze data
Investing

3 Blue-Chip Stocks Every Canadian Should Own

These blue-chip stocks are backed by large-cap companies with well-established businesses, solid fundamentals, and a growing earnings base.

Read more »

dividends grow over time
Stocks for Beginners

The Smartest Growth Stock to Buy With $2,000 Right Now

Do you have $2,000 to invest for the long term? These three TSX stocks have and will continue to deliver…

Read more »