The S & P / TSX Composite Index fell 36 points on September 9. Manufacturers and telecoms were the most affected during the day. Today I want to take a look at two undervalued stocks that have sent buy signals over the past week. Let’s go.
Why this cannabis stock looks cheap right now
HEXO (TSX: HEXO) (NASDAQ: HEXO) is an Ottawa-based company that produces, markets and sells cannabis in Canada. It holds the leading market share in the cannabis infused drinks market. HEXO shares plunged 44% in 2021 to the September 9 close. I had explained why this undervalued stock was on my radar in early August. It’s always a stock worth buying if it goes down.
The company released its third quarter 2021 results in June. Revenue fell 29% from a year ago to $ 22.6 million. This was due to lower sales in Quebec and Alberta as some of its cannabis products did not meet quality controls. Worse yet, HEXO posted negative Adjusted EBITDA of $ 10.8 million. This was a sore point, as it competes with other producers who have reached or are on the verge of reaching profitability.
HEXO is still well positioned to benefit from its recent acquisitions which will be finalized in the second half of this year. However, it will need to fine-tune its strategy when it comes to its product offerings. In addition, increased competition has undermined its advantage in the field of cannabis-infused drinks. HEXO will have to prove the skeptics wrong in the coming quarters.
HEXO stocks last had an RSI of 20. This puts this undervalued stock well in oversold territory.
One more undervalued stock that I’m always looking to add
Real questions (TSX: REAL) is an Ontario-based company providing technology and networking solutions to the mortgage and insurance industries in Canada and the United States. Shares of the undervalued stock have fallen 38% since the start of the year. The stock is down 51% year over year.
This action was my first choice for the month of August. It failed to gain momentum at the end of the summer, but I didn’t get off the bandwagon. The North American housing market continues to look strong despite historically low interest rates and strong demand. Real Matters is perfectly positioned to take advantage of this.
The company released its third quarter 2021 results on July 28. Consolidated revenues increased 9.6% from the previous year to reach $ 129 million. Real Matters achieved record revenues in its Valuation segments in the United States and Canada. The company had launched eight new lenders in US Title during the cumulative period at the end of the third quarter of 2021. In addition, it launched six new lenders in US Appraisal.
Real Matters stocks last had a favorable price-to-earnings ratio of 22. This puts the undervalued stock in better-value territory than the industry average. Real Matters last had an RSI of 35. That puts it just below technically oversold levels. However, it’s still worth picking up as mid-September approaches.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content. .
Foolish contributor Ambrose O’Callaghan has no position in the stocks mentioned. The Motley Fool recommends HEXO Corp. and Real Matters Inc.