2 Small Cap Value Stocks to Buy and Hold for Years by The Motley Fool

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© Reuters. 2 Small Cap Value Stocks to Buy and Hold for Years

After the sell-off we’ve seen all year, there are tons of undervalued stocks. However, if you’re looking to get the most out of your money, small cap stocks offer some of the best value and therefore multiple small caps are among the best stocks to buy now.

Generally, a company is considered a small-cap stock if its total market capitalization is between $300 million and $2 billion. So, as the name suggests, these stocks are much smaller than many other better known and more established companies.

These companies are smaller, and for a few other reasons, small-cap stocks generally offer better value than larger, more well-known stocks. Additionally, they also tend to offer longer-term growth potential.

But because these stocks are smaller, the market views them as riskier than their larger counterparts, and as a result, these stocks are more volatile. This is one of the main reasons why these stocks generally offer better value and are among the best to buy in this environment.

One of the main reasons small cap stocks are riskier and more volatile is that these less dominant companies could struggle in an economic downturn, especially compared to blue chip stocks with highly diversified and robust operations. .

Still, if you can find high-quality companies that you believe have years of potential and a strong enough economy to weather a period of slower and potentially negative economic growth, these small-cap stocks may be among best to buy.

So while stocks are selling and there are plenty of attractive discounts in the markets, here are two of the best small cap value stocks to buy today.

One of the best small-cap value stocks to buy today Since the pandemic hit, one of the best value stocks to buy, and one that continues to provide an attractive opportunity for investors today, is Cineplex (:CGX).

Cineplex shares have struggled over the past two years. However, that was almost entirely due to the pandemic and its impact on non-essential businesses like Cineplex.

And now, as the economy has finally reopened and Cineplex can finally start operating at full capacity again, it now faces more headwinds from the slowing economy.

However, while Cineplex’s stock has struggled throughout 2022, losing more than 15% of its value, the company’s operations are recovering.

Of course, he may see some impact from inflation, such as tighter margins or a slight impact on his sales. However, given where Cineplex is recovering and how cheap its stock already is, it has to be one of the best stocks to buy today.

Even with inflation impacting the economy, analysts still expect Cineplex to experience a strong recovery this year. And with its shares trading around $11.50, Cineplex has an enterprise value to forward EBITDA ratio of just 6.2x, making it one of the most profitable stocks to buy today.

After more than two years in operation and the share price has taken a huge hit, Cineplex has a long way to go to recover and offers tons of potential over the next few years.

A high-quality growth stock that has grown rapidly through acquisition In addition to Cineplex, another of the best small-cap value stocks to buy now is Park Lawn (TSX:PLC).

Park Lawn is a slightly larger company, with a market cap of $1.1 billion compared to Cineplex’s $700 million valuation. However, given its success by acquisition in the past and the fact that it is still a small cap stock, Park Lawn is one of the best investments you can make today. .

The company operates in the death care industry, owning cemeteries, crematoriums, funeral homes and more.

So not only does it have the excellent long-term potential to continue to grow rapidly, but much of its sales and operations will be robust and reliable, as death care is very defensive.

Additionally, given that the stock has sold around 25% off its peak, Park Lawn offers investors attractive value at these prices.

If you’re looking for small cap stocks that offer tons of value and that you can buy and hold for years, Park Lawn is one of the best to consider.

The post 2 Small Cap Value Stocks to Buy and Hold for Years appeared first on The Motley Fool Canada.

Foolish contributor Daniel Da Costa has no position on any of the stocks mentioned. The Motley Fool recommends CINEPLEX INC.

This article first appeared on The Motley Fool


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