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3 Cheap TSX Stocks I’d Buy Before the Bull Market Arrives

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Written by Ambrose O'Callaghan at The Motley Fool Canada

The S&P/TSX Composite Index rose 108 points on Monday, September 11. Some of the top-performing sectors included base metals, battery metals, health care, and information technology. Despite the early bump this week, there are still some enticing cheap TSX stocks available for investors who are hunting for discounts. Today, I want to look at three undervalued Canadian equities that are worth snatching up before the bull market arrives. Let’s dive in.

This TSX stock just sent off an enticing buy signal

West Fraser Timber (TSX:WFG) is the first cheap TSX stock I’d look to snatch up as we approach the end of the summer season. This Vancouver-based diversified wood products company is engaged in the manufacturing, selling, marketing, and distribution of lumber, engineered wood products, pulp, newsprint, wood chips, and other residuals and renewable energy. Shares of this TSX stock have dropped 7.6% month over month as of close on September 12. That has pushed the stock into negative territory so far in 2023.

This company released its second-quarter (Q2) fiscal 2023 earnings on July 26. West Fraser reported total sales of $1.60 billion in the quarter. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization were reported at $80 million, or 5% of sales.

The Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. West Fraser last had an RSI of 21. That puts this TSX stock well in technically oversold territory at the time of this writing.

Here’s why I’m stacking Air Canada before the autumn season arrives

Air Canada (TSX:AC) is a Montreal-based company that provides domestic, U.S., transborder, and international airline services. Its shares have dropped 10% month over month at the time of this writing. Moreover, this cheap TSX stock is still up 10% in the year-to-date period. Investors can see some of the wild swings Air Canada has enjoyed with the interactive price chart below.

Airliners around the world were in crisis mode as the COVID-19 pandemic represented the most disruptive event since the September 11th attacks and the subsequent War on Terror. Air Canada was no different and conceded that recovery post-2020 would take at least three years. In Q2 2023, the company achieved operating revenue growth of 36% to $5.42 billion. Moreover, adjusted EBITDA was reported at $1.22 billion — up from $154 million in Q2 2022.

This cheap TSX stock currently possesses a favourable price-to-earnings (P/E) ratio of 15. Moreover, it last had an RSI of 25, putting this growth stock in oversold territory. It is not too late to snatch up this super stock on the dip.

One more cheap TSX stock I’d buy in this shaky market

Canadian Imperial Bank of Commerce (TSX:CM) is the third and final cheap TSX stock I’d suggest investors snatch up before the midway point in September. This is the fifth largest of the Big Six Canadian bank stocks. Shares of CIBC have dropped 3.1% month over month as of close on September 11. That has pushed this bank stock into negative territory in the year-to-date period.

In Q3 2023, this bank posted revenue growth of 5% to $5.85 billion. Meanwhile, adjusted earnings were dragged down by a spike in provisions set aside for credit losses. This cheap TSX stock currently possesses an attractive P/E ratio of 11. CIBC also offers a quarterly dividend of $0.87 per share, representing a tasty 6.4% yield.

The post 3 Cheap TSX Stocks I’d Buy Before the Bull Market Arrives appeared first on The Motley Fool Canada.

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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends West Fraser Timber. The Motley Fool has a disclosure policy.

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