Regardless of the selloff over the past two buying and selling days, the S&P/TSX Composite Index is up 20.7%. Rate of interest cuts and enhancing quarterly performances from Canadian corporations have supported inventory value development. Nonetheless, the next two under-$20 Canadian shares have underperformed the broader fairness markets and can be found at engaging valuations, making them glorious buys.
WELL Well being Applied sciences
WELL Well being Applied sciences (TSX:WELL) is a digital healthcare firm that develops progressive applied sciences and options to empower healthcare practitioners in delivering higher affected person outcomes. The corporate has confronted important strain this yr, with its inventory declining over 24% amid an ongoing investigation into the billing practices of its subsidiary, Circle Medical.
Nonetheless, the Vancouver-based firm reported a wholesome second-quarter efficiency in August, with its income and adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) rising by 57% and 231%, respectively. The acquisitions over the past 12 months and natural development boosted its financials. In the meantime, its adjusted web earnings stood at $25.8 million or $0.10/share, representing a 400% improve from the earlier yr’s quarter.
Furthermore, the rising reputation of digital healthcare companies and the digitization of scientific procedures have created a long-term development potential for WELL Well being. Moreover, the corporate is growing and introducing progressive merchandise, together with these powered by synthetic intelligence, to strengthen its market share. Together with these development initiatives, the corporate can also be specializing in inorganic development and has signed letters of intent to accumulate 15 belongings, which may contribute $134 million to its annualized income.
Regardless of its wholesome development prospects, the corporate at the moment trades at a horny NTM (next-12-month) price-to-sales and NTM price-to-earnings multiples of 0.9 and 12.4, respectively. Contemplating its strong underlying enterprise, strong development prospects, and cheaper valuation, I imagine WELL Well being will ship superior returns over the following three years.
Lightspeed Commerce
One other Canadian inventory buying and selling underneath $20 that has come underneath strain is Lightspeed Commerce (TSX:LSPD), which has declined by about 29.5% thus far this yr. Along with rising competitors and a difficult macro atmosphere, the corporate’s unsuccessful try and safe a sale throughout its strategic evaluation course of has dampened investor sentiment, pushing its inventory value decrease. Amid the steep pullback, the corporate’s NTM price-to-sales and NTM price-to-earnings multiples have declined to 1.2 and 21.5, respectively.
In the meantime, Lightspeed had reported an affordable first-quarter efficiency of fiscal 2026 in July, with its topline rising by 15%. Together with the enlargement of its buyer base and elevated common income per person, the expansion in gross fee and gross transaction values boosted its prime line. Its adjusted EBITDA additionally grew 55.9% to $15.9 million, whereas money flows from working actions stood at $12.4 million in comparison with $14.2 million of money utilization within the earlier yr’s quarter. On the finish of the quarter, it had money and money equivalents of $447.6 million, making it well-equipped to fund its development initiatives.
Furthermore, the expansion in e-commerce has expanded the addressable marketplace for Lightspeed. The corporate has broadened its product portfolio to reinforce buyer expertise and expanded the attain of its fee options, which may drive its monetary development within the years forward. The corporate can also be using synthetic intelligence to enhance productiveness, thereby driving its productiveness. Amid these development prospects, the corporate’s administration expects its gross revenue and adjusted EBITDA to develop at an annualized fee of 15-18% and 35%, respectively, for the following three years. Contemplating all these elements, I’m bullish on Lightspeed at these ranges.Â
