Written by Robin Brown at The Motley Fool Canada
Sometimes the world feels a little crazy, and so does the Canadian stock market. Trading and speculating have become the norm, and they certainly elevate volatility. Fortunately, history has proven that a counter approach of patient, long-term investing can outperform. Stock performance does eventually align with business and financial performance.
Savvy long-term investors can use rapid stock fluctuations to add to great businesses when their stock underperforms. When the recovery hits, you can see your portfolio value rapidly increase to the upside.
If I were looking for undervalued Canadian stocks to buy now for future upside, here are two I would add right now.
Constellation Software: A cheap Canadian growth stock
With a market cap of $56 billion, Constellation Software (TSX:CSU) is one of Canada’s largest tech companies. However, its market value has been nearly cut in half over the past year.
The market has taken a shoot first, ask questions later approach to software stocks. Artificial intelligence (AI) has created a perceived threat against software business models. It doesn’t help that Constellation’s long-standing CEO suddenly retired due to health reasons last year. It created a sentiment storm that rapidly pulled the stock down.
Yet, Constellation is not just a typical horizontal software company. It is a mix of over 1,000 niche vertical-market software businesses. Constellation is highly decentralized, so it empowers its managers to make operating decisions close to the customer.
Link: https://ca.finance.yahoo.com/news/2-undervalued-canadian-stocks-buy-133000669.html