3 TSX stocks under $ 10 that could double your money

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The Canadian stock market has recovered strongly from its March lows. Currently, the S & P / TSX Composite Index is trading just 2.7% lower this year. Despite the strong recovery, few stocks are still trading at a fair valuation and offer excellent buying opportunities. In this article, we’ll focus on three companies that trade under $ 10 that have the potential to double your investments over the next three years.

HEXO

My first choice is a cannabis company Hexo (TSX: HEXO) (NYSE: HEXO), which has lost over 55% of its market value this year. However, in its recently released third quarter results, the company exceeded analysts’ sales expectations. Its revenue grew 30% sequentially to $ 30.9 million, driven by strong performance from its value brand, Original Stash, and sales contributions from its new hash extract launches. and oil.

Meanwhile, in July, the company expanded the availability of its vaping product lines in the medical and recreational segments across Canada. Previously, it had received approval to expand its cannabis manufacturing and processing facility in Belleville to include the beverage production facility. In addition, the company recently launched its medical cannabis products in Israel. All of these initiatives could boost the company’s sales for the foreseeable future.

Although HEXO’s Adjusted EBITDA showed improvement over the recently released quarter, it was still in negative territory. However, the company is striving to reduce costs and improve operational efficiency to move towards profitability. It downsized, sold surplus assets and automated packaging operations.

HEXO management expects to post positive EBITDA by the first half of fiscal 2021. So given the good sales outlook and improving margins, I think HEXO stock could double over the next three years. coming years.

Blackberry

My second choice is a tech company Blackberry (TSX: BB) (NYSE: BB). It provides security software solutions to companies in a variety of industries, including automotive, medical, and industrial automation. Currently, the company is trading 23% lower for this year due to the disruption caused by the pandemic in its end markets, primarily the automotive sector.

However, it is an excellent entry point for long-term investors, given the growth potential of its cybersecurity solutions. Amid the pandemic, many companies have opened their online stores. In addition, an increased number of employees are working from home.

Thus, these operational changes have increased the demand for security and data privacy solutions, thereby benefiting BlackBerry. At the same time, with the reopening of economies around the world, the automotive sector is also gradually recovering.

At the end of the first quarter, the Company’s cash, cash equivalents and investments were US $ 955 million. In addition, management expects to generate positive free cash flow during this fiscal year. The company is therefore well placed to emerge from this crisis. In addition, given its strong growth outlook, attractive valuation and stable balance sheet, I am bullish on BlackBerry.

StorageVault Canada

My third choice is StorageVault Canada (TSXV: SVI), which owns, operates and leases more than eight million square feet of storage space. Despite the impact of the pandemic, the company’s revenue grew by more than 3% in the recently announced second quarter. Its adjusted funds from operations increased 14.8% from the previous year quarter.

The Canadian warehousing market is estimated at 90 million square feet in 2,500 stores. Meanwhile, the 10 largest Canadian companies own less than 15% of these stores, indicating that the industry is highly fragmented and offers an opportunity for inorganic growth. In 2019, StorageVault Canada acquired 46 stores for $ 373 million. For this year, the company plans to acquire assets in the range of $ 50 million to $ 75 million.

The threat of the pandemic is still significant. Thus, many businesses affected by the epidemic could leave their rental space by moving their items in the warehouse to reduce their rental expenses. Thus, the potential for short and long term growth of the company appears solid. With the company currently trading 20% ​​lower for this year, it is a great entry point for long-term investors.

In the meantime, here are the top 10 buying opportunities for this month.

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The Motley Fool recommends BlackBerry, BlackBerry, HEXO, and HEXO. Silly contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

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