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3 Beaten-Down TSX Stocks to Buy Right Now – The Motley Fool Canada

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If you have missed the opportunity to participate in the recent recovery rally in the stock market, don’t worry. Here are three TSX stocks that are still down, despite their strong fundamentals, and they have strong upside potential in the long term.

Great Canadian Gaming

The optimism over the reopening of the economy has led to a slight recovery in the Great Canadian Gaming (TSX:GC) stock. However, the Great Canadian Gaming stock is still down about 32% this year. The unmatched demand destruction caused by the coronavirus outbreak has taken a toll on its stock price.

The temporary closure of all of its facilities and a pause on its capital projects under development could hurt its near-term financials. Great Canadian Gaming’s revenues declined by 10% in the most recent quarter, reflecting the halt in its operations. However, the more significant impact of the COVID-19 on its financials is likely to come in the second quarter, where its sales and profitability could take a drastic hit. Even with the reopening of its gaming facilities, traffic could stay low in 2020.

While challenges persist in the near term, Great Canadian Gaming stock should perform exceptionally well over the long term. If you look at the company’s performance before the pandemic stalled its growth, you’ll know the strength of its business. Great Canadian Gaming’s top line has marked strong double-digit growth in the past couple of years. Besides, it has managed to expand its margins considerably.

Investors with long-term investment horizons should accumulate Great Canadian Gaming stock, as the company is likely to regain its mojo, as the economy returns to normal. 

Spin Master

Spin Master (TSX:TOY) is another such stock that has taken a massive hit due to the COVID-19 outbreak. Despite the recent recovery, Spin Master stock is still down about 49% year to date. Demand destruction across most of its product categories and supply-chain disruptions dragged its shares down.

However, Spin Master has started seeing green shoots. Three of its biggest customers, including Target, Walmart, and Amazon, are continuing with their purchases. Meanwhile, its major manufacturing facilities have started to operate at full capacity.

Investors should note that the company also owns a strong portfolio of digital brands and entertainment franchises that could accelerate its growth in the long run. Also, it maintains a strong balance sheet and has ample cash flows to meet its near-term obligations and fund its growth initiatives.

Given the sharp decline in its stock and improving business prospects, Spin Master stock is an attractive value pick.

Pembina Pipeline 

Despite its low-risk and highly contracted business model, shares of Pembina Pipeline (TSX:PPL)(NYSE:PBA) are down about 31% this year. The sharp decline in Pembina Pipeline stock presents an excellent opportunity for investors to generate substantial long-term gains and earn consistent dividend income.

Pembina’s diversified revenue base, strategic acquisitions, and fee-based contracts reduce direct commodity exposure and price and volume risk. Moreover, its fee-based cash flows support its dividend payouts.

Pembina’s diversified revenue base, strong liquidity, and a lucrative dividend yield of 7.6% make it an attractive investment option.

Speaking of value picks, take a look at these stocks.

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Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Spin Master. The Motley Fool recommends PEMBINA PIPELINE CORPORATION.

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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All Magic Spells (TM) : Top Converting Magic Spell eCommerce Store

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