Last week, the Bank of Canada slashed its benchmark interest rates by 25 basis points to 4.75%. With inflation falling to 2.7% in April, Canada’s central bank is confident that inflation could cool down closer to its guidance of 2%. Thus, the central banker has stated that its monetary policy need not be restrictive. Amid the improvement in the macro environment, you can buy the following three TSX stocks trading at a considerable discount from their 52-week highs.
Telus
Telus (TSX:T) is one of the three leading players in the Canadian telecom sector that has witnessed substantial selling over the last two years. Along with higher interest rates, unfavourable regulatory decisions have weighed on the company’s stock price, which has lost 34% of its stock value compared to its 2022 highs. Also, it is down around 13% from its 52-week high, while its NTM (next 12 months) price-to-sales multiple stands at 1.6.
The digitization and growth in remote working and learning have increased the demand for telecommunication services, thus expanding Telus’s addressable market. Meanwhile, the company continues to expand its infrastructure, with 5G service covering 86% of the Canadian population and PureFiber connecting 3.2 million homes. Also, its consistent operational execution and bundled product offering continue to expand its customer base, while its postpaid mobile phone churn remained lower than 1% for the 11th consecutive year.
Further, Telus’s other verticals, TELUS International, TELUS Health, and TELUS Agriculture & Consumer Goods, could also support its growth in the coming quarters. Besides, the company hopes to continue its dividend growth program until 2025 by raising its dividends by 7 to 10% annually. Considering all these factors, I believe Telus would be an attractive buy at these levels.
WELL Health Technologies
WELL Health Technologies (TSX:WELL) is another discounted stock that I am bullish on due to its healthy growth prospects. The concerns over the impact of the challenging macro environment on its growth and decline in its margins have weighed on the company’s stock price, which has lost 26% of its stock value compared to its 52-week high. Besides, its valuation has declined to attractive levels, with the company currently trading at one times analysts’ projected sales for the next four quarters.
Meanwhile, clinics are digitizing their clinical procedures and adopting administrative tools that could streamline their operations, which have expanded WELL Health’s addressable market. Besides, the increase in the adoption of virtual healthcare services could also support its growth, with the company achieving record patient visits of 1.3 million in the March-ending quarter. Further, the company is developing artificial intelligence-powered products that could strengthen its footprint and boost its financials. So, I believe WELL Health would be an excellent buy at these levels.
BlackBerry
BlackBerry (TSX:BB) is another stock under pressure, losing around 53% of its value compared to its 52-week high. Lower-than-expected growth in the IoT (Internet of Things) segment and an uncertain macro environment appear to have weighed on the company’s stock price.
Meanwhile, the growth in software-defined vehicles has expanded BlackBerry’s addressable market. The company is also developing innovative products and making strategic acquisitions to strengthen its footprint. Further, its royalty backlog from new design wins could drive its financials from the IoT segment.
Moreover, with its innovative product offerings and blue-chip customer base, BlackBerry is well-equipped to overcome the near-term weakness in the cybersecurity segment. Considering all these factors, I expect BlackBerry to deliver superior returns in the long run.
