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2 Cheap Stocks That Could Hit New Highs in 2024

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Written by Joey Frenette at The Motley Fool Canada

It seems like stocks are bound to finish the year much lower as the September sag continues. Undoubtedly, when investors lose hope and expectations fall to the floor, you, as a contrarian investor, should be more than willing to be a net buyer of stocks. Despite higher interest rates and a potential 2024 Canadian recession, investors should stay the course with their long-term investment portfolios as we sail into a year that’s sure to be full of surprises.

Now, just because we could be dealt a recession does not mean investors are bound to lose big for the next year. Remember that stock markets are forward looking. And right now, it seems like markets are not looking forward to many things that are positive. Soft-landing and rate cuts seem more like wishful thinking every day this September selloff continues. Regardless, we’ll check in with two cheap stocks that could be in a spot to rally higher over the next year, as we move into a highly uncertain 2024.


Consider remote retailer North West Company (TSX:NWC) and financial services firm TMX Group (TSX:X), which could realistically take a shot at new highs over the coming quarters. Which stock is my preference? Let’s have a closer look at each.

North West Company

North West Company is a firm that many Canadians may never have heard of. It’s a retailer behind various grocery stores, primarily located in the northwest region of the continent. The firm also has exposure to Hawaii and other intriguing regions that can only be considered remote. As you may know, operating in a rural area can come with challenges. North West does a great job of serving geographies that may not have been nearly as profitable for the big players in the grocery and retail space.

Amid inflation, North West has held its own. The stock sagged around 25% shortly after an underwhelming quarter back in June. Now, shares are on the mend, spiking since its September lows. As a stock known to zig as markets zag, North West is a great stock to play for a run to new highs, even as markets test a recession in the new year.

With a juicy 4.49% dividend yield and a 0.57 beta, entailing a lower correlation to the TSX Index, I’m enticed to buy shares while they’re going for 13.8 times trailing price to earnings. I think the stock is too cheap, as it looks to add to recent strength.

TMX Group

TMX Group is the firm behind the TSX, TSX Venture Exchange, and TSX Alpha Exchange. Indeed, the stock has been a relatively steady performer this year, with shares up over 7% year to date. At writing, shares are down around 6% from their highs.

With a 2.52% dividend yield and a modest 21.62 times trailing price-to-earnings multiple, I view the $8 billion firm as a solid buy, especially as the firm looks to consider moving into the cryptocurrency trading business. In any case, the beta is low, 0.49, entailing less correlation to this rocky market. By this time next year, I think shares could be at a new high. So, don’t let market volatility let you pass up on such an intriguing value play.

The post 2 Cheap Stocks That Could Hit New Highs in 2024 appeared first on The Motley Fool Canada.

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Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends North West and TMX Group. The Motley Fool has a disclosure policy.