Business

2 Value Stocks to Buy Before July – The Motley Fool Canada

Published

4 years ago

June 23, 2020

The S&P/TSX Composite Index shed only five points to close out the week on June 19. North American markets have been shaky to finish the spring. This should come as no surprise considering the mountain of troubling economic data. Jobless rates have skyrocketed in Canada and the United States, even as states and provinces are pursuing a reopening. Today, I want to hunt for value stocks on the TSX. Unfortunately, this is not an easy task, as valuations have spiked over the last few months.

Value stocks are rare on the TSX right now

Back in March, investors had the opportunity to pounce on some mouth-watering discounts. This dip did not last long, so those looking for value stocks had to make quick picks. Fortunately, there are still some solid options available in specific sectors.

Auto sales have plunged sharply due to the COVID-19 pandemic. In 2019 there was already a dip from 2018, as Canadians were wrestling with very high debt levels. The financial situation for individuals has worsened because of this downturn. However, a gradual reopening holds some hope for the auto sector. The two value stocks I want to look at today are the largest auto parts manufacturers in Canada.

Why I’m still targeting these auto stocks

As I’d mentioned in the article linked above, AutoCanada is a shaky hold this summer. But top auto parts manufacturers are fundamentally sound.

Magna International (TSX:MG)(NYSE:MGA) is the first value stock I want to look at. The company is the largest automobile parts manufacturer in North America by sales of original equipment parts. Its shares have dropped 13% in 2020 as of close on June 19. However, the stock has surged 53% over the past three months.

The company released its first-quarter 2020 results on May 7. Sales fell 18% year over year to $8.7 billion, as global light vehicle production declined 27%. Magna estimated that the COVID-19 pandemic impacted roughly $1.1 billion in sales and $250 million on income from operations. Even still, cash from operations increased 8% from the prior year to $639 million.

Shares of Magna last possessed a price-to-earnings (P/E) ratio of 14 and a price-to-book (P/B) value of 1.3. This is attractive value territory relative to industry peers. Moreover, Magna also boasts a fantastic balance sheet. The board of directors last declared a quarterly dividend of $0.40 per share, representing a 3.6% yield.

Linamar (TSX:LNR) is the second-largest automobile parts manufacturer in Canada. Shares of Linamar have dropped 21% in 2020 so far. The stock has increased 22% over the past three months. Linamar released its first-quarter 2020 results on May 13.

The company suffered a steep 41% drop in net earnings to $55.7 million. Overall sales fell 22% to $1.09 billion in Q1 2020. Moreover, its industrial segment product sales declined 36% to $212.1 million. Fortunately, the company reiterated that the COVID-19 pandemic would have the most significant impact on the first quarter. With luck, the reopening will mean that the worst is over for Linamar and its peers in 2020.

Shares of Linamar last possessed a favourable P/E ratio of 6.6 and a P/B value of 0.6. This is an attractive value stock to scoop up in late June.

Fool contributor Ambrose O’Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Magna Int’l.

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Business

TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

Published

21 hours ago

November 7, 2024

Anne Joseph

CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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Business

BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

Published

21 hours ago

November 7, 2024

Anne Joseph

BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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Business

Canada Goose reports Q2 revenue down from year ago, trims full-year guidance

Published

21 hours ago

November 7, 2024

Anne Joseph

TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.

The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.

Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.

On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.

In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.

It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:GOOS)

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