2 battered TSX stocks that are due for a rally


One of the most important lessons in courage and resistance to bullies is that the number of falls does not matter; what matters is that you get up every time. But not everyone has the courage to stand up against a tyrant. And just like people, not all Stock has what it takes to stand up against an antagonistic market (the tyrant in this context).

But some titles do not stay down for long. They are reversing the trend and hitting not only their historic valuations, but beyond. Finding and betting on such stocks can do wonders for your wallet.

A health and wellness product company

Apollo Health (TSX: AHC) is enough greatly reduced both in terms of price and valuation, and the decline began long before the 2020 crash. After the crash, the share price rose massively (over 1,900%). It has fallen a lot since then, and it is currently trading at a 52% discount from its annual high.

The price-to-earnings ratio is 2.3 and the price-to-book ratio is 1.9 times, which also makes it a good deal. Its revenue for the first quarter of 2021, although this is a major advance over its first quarter of 2020, is a significant decline from its revenue for the previous quarter. But now that things have “normalized” a bit and the stock is trading at a discount, a relatively healthy second quarter earnings report could become the catalyst this stock needs for a rally.

A renewable energy company

Many renewable energy actions, unlike energy actions, saw their valuation increase massively after the pandemic. Boralex (TSX: BLX) was one of them, and the stock rose 148% from its valuation from the crash to its peak of 2021. But even before the pandemic, the stock was rising steadily, and now that it has fallen from its peak of 2021 (resulting in a 31% discount), it is close enough to the price it would have been if the pandemic hadn’t disrupted its growth pattern.

The company has maintained the revenue model it has shown historically, which is a significant peak in the last quarter of last year as well as in the first quarter of this year. EBITDA and gross margin also increased quite significantly. It is only a matter of time for this overvalued title to start to recover and start to climb at the same rate as before the pandemic.

Stupid takeaways

While one is considerably undervalued and the other quite overvalued, both seem ready for a rally – although the pace of each is different. But even if they double your capital in a few years instead of a few months, it’s still more reliable investing versus tying your money to high-risk memes or unrewarding “clawbacks”. And although this is not significant, Boralex also offers dividends at a yield of 1.74%.

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This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content. .

Foolish contributor Adam othman has no position in any of the stocks mentioned. The Motley Fool recommends BORALEX INC.


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