If you’re an investor looking for stocks that are even lower than the market right now, there are some you should sincerely consider. Today, I’m going to cover two TSX stocks that remain quite undervalued. That comes down to earnings, book value, and Relative Strength Index (RSI). In fact, one is even in oversold territory in this case.
If you’re looking for a deal on top of the deal presented by the market, with companies bound to recover, these are the two undervalued TSX stocks I’d consider on the TSX today.
CIBC
Canadian Imperial Bank of Commerce (TSX:CM) is a solid choice for long-term investors wanting a deal. All the Big Six banks are strong choices, in fact, trading well into value territory. This comes down to Canadian banks simply being in a completely different position compared to American banks.
It really comes to one thing: competition. In the United States, there is so much competition. This leads to banks going under when Americans take out their cash. But in Canada, there is not as much competition at all, and it’s been like this for decades. Canadian banks have more than enough provisions for loan losses.
CIBC stock has dropped lower than the rest of the Canadian banks due to its exposure to the Canadian housing market. Sure, it’s down now, but it won’t be forever. And again, CIBC stock has provisions and will be able to recover well after a recession occurs.
Meanwhile, it offers the best dividend of the Big Six banks. CIBC stock is one of the TSX stocks offering a yield at 5.89%, trading at just 11.4 times earnings and 1.17 times book value.
goeasy
Financial institutions in general aren’t doing well during this downturn. If you’re going to expand beyond the Big Six banks, you have to tread a bit more carefully. Find companies that have been around for decades with more room to run.
In this case, goeasy (TSX:GSY) is a solid option. The company has been on the market for decades, starting out as a home appliance loaner and expanding to financial loans. It continues to report record-setting earnings, yet it’s now in oversold territory.
This comes down to the market in general rather than the performance of goeasy stock itself. It continues to be a strong buy recommendation by analysts and beats out earnings estimates again and again.
Yet today, shares are down a whopping 23% in the last year! Further, it trades in oversold territory at a 25.51 RSI, at the time of writing. It also trades at just 10.9 times earnings, 1.74 times book value, and offers a dividend yield at 4.17%.
So, if you want a solid company that has more room to grow and continues to hit records, even after being on the market for decades, I would certainly consider goeasy stock with your TSX stocks. It continues to prove it can do well in any market, which is exactly what Canadians should seek out.
