The persistently high interest rate environment and economic uncertainty continue to pose challenges for equity investors. Nonetheless, investors should take advantage of the reduced share prices of select high-quality Canadian stocks. Itâs worth highlighting that the broader markets have demonstrated notable resilience this year. However, shares of a few fundamentally strong TSX stocks are trading at a discounted valuation, offering a compelling buying opportunity.
Further, investors should note that a favourable shift in the business environment and the alleviation of macroeconomic pressures could significantly boost the stocks of these companies. Therefore, if you are considering an investment of $1,000, consider investing in shares of Canadian corporations with the potential to deliver notable growth and the ability to outperform broader markets.Â
With this context in mind, here are two stocks to buy with $1,000 in November 2023.
AritziaÂ (TSX:ATZ) stock has lost nearly 55% of its value year to date. This substantial downturn in the shares of the luxury apparel design house can be attributed to a deceleration in its sales growth rate led by the tough year-over-year comparisons. Moreover, the company failed to introduce fresh and innovative product offerings that weighed on its sales. In addition, the adverse macroeconomic environment impacting consumer spending on non-essential items has continued to hurt its performance.
Nonetheless, Aritzia has reverted to its pre-established product development schedule and operates in a normalized supply-chain environment. This means that the company can create new styles to maintain freshness in its assortments, which will drive demand and its revenues. Further, Aritzia’s top-line growth will likely accelerate with new boutiques opening, as they perform well and have a low payback period. Moreover, Aritziaâs selective pricing actions, cost cuts, and opening of its new distribution centre will support its margins and profitability.Â
Aritzia anticipates growing its net revenue by an average annualized growth rate or CAGR (compound annual growth rate) of 15-17% through 2027. Further, its bottom line is expected to grow faster than sales. In summary, its low share price and expected acceleration in sales and earnings growth make Aritzia a compelling investment.
Next is goeasy (TSX:GSY), which is growing its top and bottom lines at a double-digit rate, but its stock is trading at a next 12-month price-to-earnings multiple of only 7.8. This makes goeasy too cheap to ignore near the current levels. In addition, goeasy consistently grows its dividends and offers a decent yield. All these positives support my bullish outlook on goeasy stock.
This subprime lender has grown its top line at a CAGR of 17.7% since 2012. At the same time, its bottom line increased at a CAGR of 29.5%.
Looking ahead, its ability to grow the loan portfolio, steady credit and payment performance, and improving efficiency ratio will drive its revenue and earnings. Moreover, the large subprime lending market and its omnichannel offerings bode well for growth. Further, the companyâs solid earnings base will enable it to enhance its shareholdersâ returns through higher dividend payments in the coming years.
Before you consider Aritzia, you’ll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in October 2023… and Aritzia wasn’t on the list.
The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 25 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks
* Returns as of 10/10/23
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