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Looking for Hidden Gems? These 3 TSX Stocks Could Be a Great Place to Start

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Image source: Getty Images

Written by Ambrose O'Callaghan at The Motley Fool Canada

The S&P/TSX Composite Index was down 50 points in early afternoon trading on Tuesday, May 9. Some of the top-performing sectors included battery metals, telecom, and information technology. Today, I want to scour the TSX for some hidden gems that investors may have missed out on in the beginning of the spring. These TSX stocks offer value and a shot at super long-term growth. Let’s jump in.

This undervalued TSX stock has nice growth potential for the long term

Altus Group (TSX:AIF) is a Toronto-based company that provides asset and funds intelligence solutions for commercial real estate (CRE). It operates through three main segments: Analytics, Property Tax, and Appraisals, and Development Advisory. Shares of this TSX stock have plunged 26% month over month at the time of this writing. That has pushed the stock down 24% in the year-to-date period.

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This company unveiled its first-quarter (Q1) fiscal 2023 earnings on May 4. Altus Group reported consolidated revenues of $190 million — up 13% compared to Q1 fiscal 2022. Meanwhile, adjusted earnings per share (EPS) rose to $0.33 compared to $0.27 in the prior year. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. Altus Group posted consolidated adjusted EBITDA growth of 49% to $26.5 million in Q1 FY2023.

Shares of this TSX stock are trading in favourable value territory compared to its industry peers. Altus Group last announced a quarterly dividend of $0.15 per share. That represents a modest 1.4% yield.

Don’t sleep on this dividend stock that can deliver strong growth going forward

Badger Infrastructure (TSX:BDGI) is another TSX stock I’d consider a hidden gem in early May 2023. This Calgary-based company provides non-destructive excavating and related services in Canada and the United States. Shares of this TSX stock have dropped 6.8% month over month. The stock is still up 5.6% so far in 2023.

Investors got to see Badger’s Q1 fiscal 2023 earnings on May 3. The company posted total revenue of $143 million in Q1 FY2023 — up from $114 million in Q1 fiscal 2022. Meanwhile, adjusted EBITDA rose to $23.9 million compared to $10.6 million in the prior year. Badger posted net earnings of $3.67 million, or $0.08 per share, compared to a net loss of $6.70 million, or $0.15 per share, in Q1 2022.

This TSX stock last had a solid price-to-earnings ratio of 27. Meanwhile, Badger offers a quarterly dividend of $0.172 per share, which represents a 2.4% yield.

One more cheap TSX stock I’d snag in early May 2023

Bausch Health (TSX:BHC) is the third and final TSX stock that is flying under the radar in the spring of 2023. This Laval-based company develops, manufactures, and markets a range of pharmaceutical, medical device, and over-the-counter (OTC) products primarily in therapeutics areas of eye health, gastroenterology, and dermatology. Shares of this TSX stock have dropped 21% over the past month. The stock is still down 8% so far in 2023.

In Q1 2023, Bausch Health posted revenue growth of 1% to $1.94 billion. Moreover, its Xifaxan core product contributed 7% reported growth. The company continued to post strong progress for its mid- to late product pipeline.

Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. This TSX stock currently possesses an RSI of 28. That puts Bausch Health in technically oversold territory at the time of this writing.

The post Looking for Hidden Gems? These 3 TSX Stocks Could Be a Great Place to Start appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Altus Group Limited?

Before you consider Altus Group Limited, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in April 2023... and Altus Group Limited wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 4/18/23

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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Altus Group. The Motley Fool has a disclosure policy.

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