The stock market witnessed a stellar recovery over the past year, fueled by easing recession fears and moderating inflation. Adding to the positives, Investors’ willingness to embrace risk grew, alongside expectations of declining interest rates. This bodes well for continued upward momentum in the equity market.
However, not all fundamentally strong companies rode the recovery wave. Some still linger at discounted prices, presenting long-term investors with an excellent buying opportunity near current price levels.
Against this backdrop, here are three Canadian stocks to buy while they are on sale.
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Aritzia
Shares of luxury clothing company Aritzia (TSX:ATZ) fell over 21% in one year, underperforming the broader markets. A tough year-over-year comparison and its failure to introduce a fresh collection took a toll on its financials and share price.
Nonetheless, Aritzia’s fundamentals remain strong, and the company is taking steps to address short-term concerns and reaccelerate its top and bottom-line growth. The company focuses on innovation, data analytics, and technology to better understand consumer preferences, optimize its product portfolio, and introduce fresh styles.
In addition, Aritzia is on track to open more boutiques, which will significantly boost its sales and earnings. It’s worth highlighting that Aritzia’s new boutiques are performing exceptionally well and have lower payback periods, which is positive. Besides expanding its geographical presence, the company is also enhancing its online customer experiences and omnichannel offerings. This will strengthen its e-commerce growth and, in turn, its overall financials.
The company has maintained its top-line growth guidance for the medium term. It expects revenue to increase at a compound annual growth rate (CAGR) of 15-17% through 2027. This indicates that its growth rate will significantly improve from current levels, boosting its share price.
Lightspeed
Lightspeed Commerce (TSX:LSPD) stock gave up its prior year’s gain and is down about 32% year to date. The significant pullback in this technology stock provides an excellent opportunity for buying. While Lightspeed stock is trading cheap, it remains well-positioned to benefit from the structural shift in selling models toward omnichannel platforms.
Besides the digital shift, Lightspeed is poised to gain from its broad software platform and unified suite of tools, enabling it to meet the diverse needs of its customers. Further, the company’s strategy of integrating payments into its software platform will enable it to improve unit economics and customer retention rate and support average revenue per user (ARPU).
Also, its growing base of high-value customers is reducing the risk of churn and contributing to ARPU growth. Moreover, its focus on acquisitions is likely to bolster its growth rate. In summary, Lightspeed is the top stock to buy at a discount.
Ballard Power Systems
Ballard Power Systems (TSX:BLDP) stock is down over 36% in one year. Widening of losses and a decline in its order book weighed on its share price. However, Ballard Power System’s long-term prospects remain bright. The company manufactures proton exchange membrane (PEM) fuel cell products with applications in electric buses, trucks, and battery-electric vehicles, among others.
The ongoing shift towards green energy suggests that the demand for the company’s zero-emission products are set to increase. This will drive its future revenue and earnings growth. Further, the company recently announced that it has received the largest order in its history from Solaris Bus & Coach, Europe’s leading bus manufacturer.
Looking ahead, favourable government policies, its focus on developing new products, expansion of manufacturing capacity, initiatives to reduce costs, and increased customer wins will likely push its stock higher.
