Yahoo Finance 5 Great Value Stocks I’d Buy Today
Stocks with good fundamentals have better odds of standing the test of time, as opposed to fast-growing stocks that could be set to crash. I like to invest in stocks that are growing sales and have high margins ? both gross and net. After all, sales are meaningless if a company cannot turn a profit. Unfortunately, many stocks live off hype these days, and investors turn a blind eye to profits, but that can be a ticking time bomb.
Below, I have a list of five stocks that have strong fundamentals and that would be great additions to any portfolio.
Canadian National Railway Company (TSX:CNR)(NYSE:CNI) has shown strong and stable growth over the years. In its most recent quarter, the company showed growth in its top line of over 7%, and sales could continue to rise as the economy does well.
Not only has CN Rail done a good job of growing its sales, but profits over the past four quarters have averaged an incredible 30% of revenue. A big reason for the strength in its bottom line has been that the railway operator averages margins of 67%, which leaves a lot left over to cover overhead and other operating expenses.
Over the long term, CN Rail offers a stable investment that will see strong returns as the economy continues to grow.
Constellation Software Inc. (TSX:CSU) is on this list for its strong bottom line, which has more than doubled in just three years. The company?s sales have also increased 75% during that time, and in its most recent quarter revenues were up 17%.
Because Constellation is a service-oriented business, it is able to achieve high gross margins and not have a great deal of items make up the company?s cost of sales. In the past four quarters, the company has averaged a profit margin of 9%
Open Text Corp. (TSX:OTEX)(NASDAQ:OTEX) recently posted a strong quarter where it saw sales grow 30%. The company has a strong base of recurring revenue, which makes it easy for Open Text to build on its existing sales. Gross margins for the company are also very strong at 67% over the trailing 12 months, while profit margins have averaged a stable 6%.
Morguard Corp. (TSX:MRC) has seen tremendous growth over the past three years with sales nearly doubling during that time. Its gross margins are a bit lower than the others on the list with an average of 63%, but less overhead has allowed the company to bank a profit margin of over 23% over the last four years.
Great Canadian Gaming Corp. (TSX:GC) has seen its stock soar 30% since the summer when it was announced that it won a bid to operate three casinos in Ontario through a partnership with Brookfield Business Partners LP.
The company has seen sales grow nearly 40% over the past three years, and with more casinos in its portfolio, Great Canadian Gaming could see that growth accelerate.
With gross margins of 63% and profit margins averaging more than 15%, a lot of the company?s growth will flow through to the bottom line and help increase the stock?s value, making it a great long-term investment.
More reading
Canopy Growth Corp Surges 14.4% in a Day: Could Shares Hit $25 Before Year's End?
The surprising new technology that could create the world's very first TRILLIONAIRE
Growth Investors, Take Notice: This High-Quality Retail Stock Is on Sale
Fool contributor David Jagielski has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of BROOKFIELD BUSINESS PARTNERS LP, Canadian National Railway, and Open Text. Canadian National Railway and Open Text. are recommendations of Stock Advisor Canada.
