We recently published a list of the 10 Best Canadian Stocks to Buy Under $10. In this article, we are going to take a look at why Bausch Health Companies Inc. (NYSE:BHC) is one of the best Canadian stocks to buy under $10.
How are Canadian Stocks Performing?
The Canadian stock market had a positive third quarter, following a sluggish start earlier in 2024. The market was driven by domestic rate cuts and rebounding global markets. The BMO S&P 500 Index ETF, iShares Core S&P/TSX Capped Composite Index ETF, and iShares S&P/TSX 60 Index ET have surged over 33%, 20%, and 22% year-to-date, as of November 27.
If we talk about year-over-year headline inflation, it has cooled as per the Bank of Canada’s target rate of 2%. Hence, policymakers have cut rates four times consecutively and another 50 basis points cut is expected in December. The Bank of Canada’s benchmark lending rate stands at 3.75%, while economists are projecting a terminal interest rate of as low as 2%.
The managing director and head of macro strategy at Desjardins Group pointed out that the GST tax break from December 14 to February 15, 2025, will have a high fiscal multiplier, adding a noticeable boost to growth in the first half of 2025. The tax break is to increase consumer spending which has been severely impacted by interest rate increases and high debt levels since 2022. The tax break will allow consumers to buy essentials such as groceries, snacks, and kids’ clothing – all tax-free.
In the long run, the potential trade tariffs pose a wider threat to companies. The newly elected U.S. President Trump has vowed to impose a 25% tax on imports from Canada as well as Mexico. In 2023, the U.S. accounted for more than 75% of exports from Canada.
READ ALSO: Jim Cramer’s Latest Lightning Round: 11 Stocks to Watch and Jim Cramer on AMD and Other Stocks.
Canada’s Precious Metal and Mining Industry: The Real Deal
Some of the largest Canadian companies are involved in minerals and mining of rare earth metals, mainly engaged in gold and uranium exploration. Canada is also one of the largest producers of rare earth metals including Gold and Uranium. According to the World Gold Council, Canada was the fourth largest producer of gold with a total production of 192 tonnes in 2023. Are you interested in Gold Stocks to Buy Under $30? (Click Here)
In addition, Canada was the second largest Uranium producer in 2022, accounting for a total production of 7,351 tonnes, as per the World Nuclear Association. Cigar Lake was the largest operational highest-grade Uranium mine in northern Saskatchewan, Canada.
With that, let’s take a look at where Bausch Health Companies Inc. (NYSE:BHC) ranks among the best Canadian stocks to buy under $10.
A pharmacist looking at a prescription bottle of gastrointestinal drugs.
Bausch Health Companies Inc. (NYSE:BHC)
Number of Hedge Funds Holders: 30
Share Price as of November 27: $8.12
Bausch Health Companies Inc. (NYSE:BHC), based out of Laval, Quebec, Canada, is a global diversified pharmaceutical company. The company manufactures and sells a range of products in gastroenterology, hepatology, neurology, dermatology, and international pharmaceuticals.
The company’s Salix segment consists of sales in the U.S. of its gastroenterology products, while the company’s Solta Medical segment consists of global sales of Solta Medical aesthetic medical devices. In addition to that, the company’s Bausch + Lomb segment takes care of global sales of Vision Care, surgical and pharmaceutical products.
Bausch Health Companies Inc. (NYSE:BHC) reported a sixth consecutive quarter of year-over-year growth, as of Q3 2024. The company posted revenue of $2.51 billion, up by 12% from a year ago, while the adjusted EBITDA soared by 10% to $909 million. The company’s Salix segment, particularly XIFAXAN, improved its sales by 7% from a year ago, showing strong performance. The sales of the International segment delivered 8% organic growth. Whereas, the Solta Medical segment obtained 36% organic growth year-over-year due to strong demand in South Korea and China.
Despite the improvements in quarterly results, the company continues to face Hatch-Waxman litigation, posing potential legal challenges. However, Steven Tananbaum’s GoldenTree Asset Management had added 32% of BHC’s shares to its portfolio in the third quarter and now has a stake valued at $239.55 million in Bausch Health Companies Inc. (NYSE:BHC).
Overall, BHC ranks 4th on our list of the best Canadian stocks to buy under $10. While we acknowledge the potential of BHC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BHC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.