Written by Ambrose O'Callaghan at The Motley Fool Canada
The S&P/TSX Composite Index shed 129 points on Monday, September 18. Some of the worst-performing sectors included health care, information technology, battery metals, and base metals. A positive Canadian jobs report has somewhat tempered the negative economic outlook among some experts and analysts. However, the market has remained shaky. Today, I want to zero in on four struggling stocks that I’m happy to snatch up at a discount. Let’s jump in.
This is the first struggling stock I’d look to buy for cheap in the middle of September
Kinaxis (TSX:KXS) is an Ottawa-based company that provides cloud-based subscription software for supply chain operations in Canada, the United States, Europe, and around the world. Shares of this struggling stock have dipped 0.96% month over month as of close on September 18. The stock is still up 6.9% so far in 2023.
This company released its second-quarter (Q2) fiscal 2023 earnings on August 9. Kinaxis delivered total revenue growth of 31% to $105 million. Meanwhile, gross profit jumped 28% to $63.6 million. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. Kinaxis achieved adjusted EBITDA growth of 47% to $15.2 million in Q2 2023.
Shares of Kinaxis are trading in favourable value territory at the time of this writing. The company is on track for strong earnings growth going forward. Kinaxis also boasts an immaculate balance sheet.
Don’t sleep on this TSX stock that offers nice value at the end of the summer
Sleep Country Canada (TSX:ZZZ) is the second struggling stock I’d target in the second half of September. This Toronto-based company is engaged in retailing mattresses and bedding-related products across Canada. Its shares have increased just under 1% over the past month. Sleep Country stock has climbed 3.7% in the year-to-date period.
In Q2 2023, the company saw e-commerce revenue deliver 21% growth. Moreover, operating EBITDA dropped 17% to $44.2 million. On the business front, Sleep Country acquired Caster Sleep, an e-commerce company that is focused on the sale of sleep products. Meanwhile, Sleep Country expanded its partnership with Walmart.
Here’s a regional bank stock that looks like a worthy gamble right now
Laurentian Bank (TSX:LB) is a regional bank stock that is based in Montreal and widely present in its home province of Quebec. This month, the bank revealed that it concluded its strategic review. It failed to find a buyer over the past year, which means it will need to build confidence as a standalone institution in the near term. Shares of this struggling stock have dropped 1.4% in 2023.
The bank reported adjusted net income of $57.6 million, or $1.22 per diluted share in Q2 2023 — down 1% and 2%, respectively, compared to the previous year. Laurentian posted adjusted net income of $163 million in the first nine months of fiscal 2023. That is down from $179 million in the previous year.
Shares of this bank stock last had a very favourable P/E ratio of 7.1. Better yet, it offers a quarterly dividend of $0.47 per share, representing a strong 5.8% yield.
One more struggling stock that I’m targeting today
Aritzia (TSX:ATZ) is the fourth and final struggling stock I’d look to snag in the final days of summer. This Vancouver-based company designs and sells apparel and accessories for women in the United States and Canada. Its shares have declined 6.6% month over month. The stock has plummeted 51% so far in 2023.
Investors can expect to see the company’s Q2 fiscal 2024 earnings on September 28. In Q1 FY2024, Aritzia delivered net revenue growth of 13% to $462 million. Meanwhile, e-commerce net revenue climbed 12% to $135 million. Shares of Aritzia are trading in attractive value territory compared to its industry peers. The company is still geared up for solid growth in the quarters ahead.
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Fool contributor Ambrose O'Callaghan has positions in Kinaxis. The Motley Fool has positions in and recommends Aritzia. The Motley Fool recommends Kinaxis, Laurentian Bank Of Canada, and Walmart. The Motley Fool has a disclosure policy.