Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

3 Oversold TSX Stocks I’d Buy in Bulk

Stock Markets Jul 02, 2022 13:45
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. 3 Oversold TSX Stocks I’d Buy in Bulk

The TSX closed the second the quarter on a negative note with 64% of its constituents retreating and only one stock posting a new 52-week high. Because of fears that stagflation is around the corner, the Index gave up 217.28 points (1.14%) on June 30, 2022, to raise its year-to-date loss to 11.13%.

Energy stocks remain market leaders, although the sector’s gain thus far has been reduced to below 40%. Also, the rest of the 10 primary sectors are in the red to start Q3 2022. The top three worst performers are healthcare (-48.96%), technology (-39.81%), and real estate (22.93%).

The drop in oil production and potential weaker demand for oil saw a selloff in energy stocks. However, the situation opens buying opportunities. Veteran investors will take advantage and buy Whitecap Resources (TSX:TSX:WCP), Tamarack Valley Energy (TSX:TSX:TVE), and Suncor Energy (TSX:TSX:SU)(NYSE:SU) on the dip.

Some industry analysts maintain a rosy picture for the energy sector and not a gloomy demand destruction. I’d consider buying the three oversold stocks in bulk, as they’re likely to soar higher in the second half of 2022.

New growth driver Whitecap Resources fell nearly 2% yesterday to $8.94 per share, although the stock is still up 21.34% year to date. The $5.53 billion oil & gas company expects improved free funds flow going forward when it completes the purchase of XTO Energy Canada before the end of this quarter.

Management also announced a 22% increase in its monthly dividend. The current dividend yield is 4.82%. Whitecap expects the acquired assets from ExxonMobil to generate significant free cash flows in the next two years. The strategic acquisition also allows the company to enter the prolific liquids-rich Duvernay play.

Low-risk inventory Tamarack is an interesting buy, despite the 3.78% decline on Thursday. At $4.33 per share, the trailing one-year price return is 70.94%, while the year-to-date gain is 13.66%. The $1.91 billion oil & gas company drills for and acquires long-life resource plays in the Western Canadian Sedimentary Basin.

Since the said resource plays are repeatable and predictable, management has maintained its focus on a rate-of-return growth strategy. The company’s extensive low-risk inventory and oil development drilling locations are its competitiveness advantages. Like Whitecap Resources, Tamarack pays a monthly dividend. If you invest today, the dividend yield is 2.45%.

Shifting to high gear Suncor Energy has regained investors’ trust following its 55% dividend cut in Q1 2020. The oil bellwether continues to show resiliency and strength after two quarters this year. At $45.16 per share, it outperforms the broader market with its 45.54% gain, notwithstanding the almost 10% drop from mid-June 2022.

According to its president and CEO, Mark Little, the $64.38 billion integrated energy company has a clearly defined capital-allocation framework. The said framework should result to higher production and substantial free funds flow in 2022. He added that all of the assets are shifting to high gear under current market conditions.

Little further said the integrated business model is a downside protection for shareholders. Thus, Suncor’s dividend yield of 4.13% should be safe and sustainable for the rest of 2022 and beyond.

Solid prospects Rising interest rates could reduce oil demand, but Whitecap, Tamarack, and Suncor remain solid investment prospects in the short- to the long-term horizon.

The post 3 Oversold TSX Stocks I’d Buy in Bulk appeared first on The Motley Fool Canada.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

This Article Was First Published on The Motley Fool

3 Oversold TSX Stocks I’d Buy in Bulk
 

Related Articles

Allbirds Downgraded on Macroeconomic Deterioration
Allbirds Downgraded on Macroeconomic Deterioration By Investing.com - Aug 10, 2022

By Sam Boughedda Despite a 4% climb in its share price Wednesday, Allbirds Inc (NASDAQ:BIRD) stock was downgraded to Equal-Weight with a $5 per share price target by a Morgan...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email