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Written by Ambrose O'Callaghan at The Motley Fool Canada
The S&P/TSX Composite Index rose 120 points on January 12. North American markets have started hot in 2022, but there may be rocky waters ahead. The United States Federal Reserve and the Bank of Canada (BoC) are both telegraphing several rate hikes in 2022. That could lead to volatility for markets that have gorged on easy monetary policy since the start of the COVID-19 pandemic. Today, I want to look at four cheap stocks that are on sale. Let’s jump in.
Here’s a dependable dividend stock that is undervalued right now
Ritchie Bros Auctioneers (TSX:RBA)(NYSE:RBA) is a Vancouver-based asset management and disposition company. It sells industrial equipment and other durable assets through its unreserved live on-site auctions, online marketplaces, listing services, and private brokerage services. Shares of this cheap stock have plunged 8.8% month over month as of close on January 12.
Investors can expect to see Ritchie Bros’s fourth-quarter and full-year 2021 earnings in February. In Q3 2021, the company saw total revenue drop 1% from the prior year to $329 million. Meanwhile, non-GAAP adjusted operating income dipped 11% to $75.1 million.
This Canadian stock is trading in favourable value territory compared to its industry peers. It last had an RSI of 36, putting it just outside technically oversold territory.
This cheap tech stock is worth your attention
Enghouse Systems (TSX:ENGH) is a Markham-based company that develops enterprise software solutions to a global client base. Shares of this Canadian stock have dropped 12% in the month-over-month period. This cheap stock suffered an 18% decline for the full year in 2021.
In its final batch of fiscal 2021 results, the company saw revenues drop marginally from 2020. Meanwhile, adjusted EBITDA margins were reported at $36.1% — up from 35.1% in the previous year. Shares of this Canadian stock possess a favourable price-to-earnings (P/E) ratio of 26. Moreover, Enghouse boasts an immaculate balance sheet. It last had an RSI of 32, having just climbed out of oversold levels. It is not too late to buy the dip in this cheap stock.
Don’t sleep on gold stocks in 2022
Back in November 2021, I’d discussed why I was still bullish on gold ahead of the New Year. Torex Gold (TSX:TXG) is a Toronto-based gold producer that boasts properties in Mexico. This Canadian stock dropped 31% in 2021. However, its shares have climbed 1.9% in the week-over-week period.
Torex continued to benefit from stronger gold prices in the third quarter of 2021. Adjusted net earnings were reported at $42.9 million, or $0.50 per share. Meanwhile, it posted adjusted EBITDA of $386 million in the year-to-date period.
This Canadian stock possesses a very attractive P/E ratio of 3.5. It dipped into oversold territory last week. Fortunately, it is not too late to get in on this gold focused cheap stock in January 2022.
One more cheap Canadian stock I’d look to snag in January
HEXO (TSX:HEXO)(NASDAQ:HEXO) is the last cheap stock I’d suggest investors pick up as we approach the middle of January. In the summer of 2021, HEXO looked like an undervalued Canadian stock. It has carved out a strong position in the cannabis-infused beverage space.
Shares of this Canadian stock last had an RSI of 29. It has floated in or around technically oversold territory since early July 2021. The cannabis sector has had a tremendous fall from grace, but HEXO looks like a worthy gamble right now.
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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns and recommends Enghouse Systems Ltd. The Motley Fool recommends HEXO Corp. and Ritchie Bros. Auctioneers Incorporated.