On the surface, the Canadian stock market as a whole is just about flat at the six-month mark. However, there’s been no shortage of volatility in 2023. Additionally, there is a surprisingly high number of individual stocks trading far below all-time highs.
Certain sectors as a whole have been on the decline as of late. Whereas other businesses have been punished individually, resulting in massive losses for the stock.
While there may be some bear traps on the TSX, I’ve put together a list of three discounted stocks that deserve a closer look. These three picks offer opportunistic investors the chance to pick up a proven market beater at a rare discount.
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WELL Health Technologies
Not many TSX stocks outperformed WELL Health Technologies (TSX:WELL) in 2020. As demand for the company’s telehealth services skyrocketed in the early days of the pandemic, so did the share price. The growth stock ended 2020 up more than 400%.
Today, WELL Health is trading close to 50% below all-time highs from 2021. That’s even with the stock jumping close to 70% this year already.
There’s no question that WELL Health’s stock price got slightly ahead of itself. A lot of growth was pulled forward in 2020 and 2021, which led to many investors enjoying multi-bagger returns in a short period of time. As a result, it’s not all that surprising to see the stock pullback after such a sudden explosion.
The pandemic may have pulled growth forward for WELL Health, but the telehealth industry as a whole remains ripe with opportunity.
Investors bullish on the rise of virtual health services should have this growth stock at the top of their watch lists.
goeasy
Even with the recent selloff, there aren’t many TSX stocks that have outperformed goeasy (TSX:GSY) over the past decade.
Shares are down close to 50% from all-time highs set in late 2021. Still, the growth stock has largely outperformed the S&P/TSX Composite Index over the past five years. Shares are up 170% compared to the market’s return of less than 30%.
While goeasy can be lumped in with the growth sector that largely underperformed in 2022, the high-interest-rate environment can also be blamed for the stock’s poor performance. The consumer-facing financial services provider understandably has seen demand take a hit with the increase in interest rates.
The Bank of Canada seems to be in no rush to return interest rates to pre-pandemic levels. That means that it may be a slow and gradual climb back to all-time highs for goeasy.
In the short term, investors may find better value than this growth stock on the TSX. Over the long term, though, this is as dependable of a market beater around. You won’t want to miss this buying opportunity.
Air Canada
Not many TSX stocks felt the pain more than Air Canada (TSX:AC) in early 2020. The airline stock continues to trade far below pre-pandemic levels, resulting in a return that’s lagged the market over the past five years.
Air Canada has been one of the few North American stocks that had a recent history, prior to the pandemic that is, of outperforming the market. Airline stocks aren’t typically known for driving market-beating gains. However, Canada’s largest airline has certainly been an exception to that in the past.
With a return to travel in full swing, Air Canada could prove to be an opportunistic long-term buy at these discounted price levels.
