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Written by Jitendra Parashar at The Motley Fool Canada
Stocks in Canada continue to slide for the second consecutive month in May 2022. After losing more than 5% of its value in April, the TSX Composite Index is currently trading with 2.7% month-to-date losses. A big tech sector meltdown started taking a toll on investors’ sentiments at the start of the year. Recently emerged signs about high inflation hurting corporate earnings have once again fueled the debate about more aggressive monetary policy action this month, driving stocks even lower.
Buy these cheap Canadian stocks now
While the ongoing market volatility could keep stocks highly volatile in the near term, most fundamentally strong stocks, like Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) and Corus Entertainment (TSX:CJR.B) have the potential to showcase a sharp recovery in the medium to long term. That’s why buying such seemingly undervalued stocks now could help investors boost the returns on their investments. Let me explain why I find these cheap Canadian stocks worth buying today.
Hut 8 Mining stock
Hut 8 Mining is a Toronto-based cryptocurrency mining company with a market cap of $557 million. This cheap Canadian stock currently trades at $3.19 per share after losing nearly 81% of its value in the last six months — mainly due to the recent cryptocurrency market-wide crash.
After mining 2,786 Bitcoin in 2021, Hut 8 continues to focus on expanding its digital assets mining capacity. This tech company mined 242 Bitcoin in the first quarter of 2022. In addition, it installed over 9,500 new miners, including MicroBT M30S, M30S+, and M31S+, at its facilities in Alberta during the quarter. After these new installations, the company’s operating capacity increased to 2.54 exahash per second — up 27% from its capacity at the end of 2021.
While the Bitcoin prices have seen a massive collection this year, it shouldn’t surprise investors, as the crypto market has always been extremely volatile. Moreover, the rising acceptability of cryptocurrencies across the world could help Bitcoin prices recover and trigger a massive rally in HUT stock in the medium to long term. Given this upside potential, I find Hut 8 stock really cheap and attractive for investors who want exposure to the cryptocurrency market without directly buying a crypto coin.
Corus Entertainment stock
Canadian investors could also consider buying Corus Entertainment stock right now, as it looks undervalued based on its long-term growth outlook. Its handsome dividend yield of around 5.9% makes this cheap Canadian stock even more attractive. The shares of this Canadian media company currently trades at $4.05 per share with 15% year-to-date losses.
After the pandemic-related restrictions and operational challenges took its revenue down by more than 10% in fiscal 2020, its financial growth came back on track in the second half of its fiscal year 2021. With the help of Corus Studio’s strengthening content strategy, the company expects to deliver strong double-digit content portfolio growth in the second half of its fiscal 2022, which should help it maintain strong financial growth.
In order to boost its financial flexibility and overall returns to shareholders, Corus Entertainment has increased its focus on reducing debt lately. These positive factors make this cheap Canadian stock worth buying today to hold for the long term.
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The Motley Fool has positions in and recommends Bitcoin. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.