2 Overlooked Stocks That Still Look Cheap Right Now

Depending on where you look, you may perceive stocks as wildly overvalued or fairly priced. Of course, even with extended multiples and broad strength across the board, value investors can still pick and choose corners of the market that possess a good risk/reward. And even the names that are trading at the higher end of the historical range might still offer a decent deal, given the trajectory of earnings.

Either way, this piece will look into two names that could still be worth picking up for investors hungry for undervaluation in a market that some consider to be getting a bit on the frothy side. For the most part, though, I think the TSX Index is more or less fairly valued, and that makes staying the course and continuing to invest the best move going forward.

National Bank of Canada

National Bank of Canada (TSX:NA) shares may have gained over 55% in the past year, but they’re still hardly expensive at 18.45 times trailing price to earnings (P/E). The 2.56% dividend yield, though bountiful, is definitely on the small side, especially for a bank. But in this bull market in the banks, that’s the new 4%.

Looking ahead, National Bank of Canada looks poised for more strong quarters, especially as the Bank of Canada keeps holding off on hikes. Indeed, stable rates are good news for the banks. And even if inflation becomes a problem again, I wouldn’t expect a hike or two to derail the big run in the bank stocks.

With the wealth management and capital markets business firing on all cylinders while the bank continues to raise the bar on return on equity (ROE), perhaps with a bit of help from AI, I think shares of NA are still worth paying a premium for. Though it’s less of a passive-income play these days, I still think those seeking total returns over time may wish to stick with the name.

Berkshire Hathaway

When it comes to value, Berkshire Hathaway (NYSE:BRK.B) shares are starting to look rich with it. Indeed, it’s hard to tell how many of the Warren Buffett fans have sold shares and moved on. Even with a new CEO at the helm, a Canadian in Greg Abel, I find Berkshire Hathaway could still be a winning investment over time, especially if you’re able to pick up shares after a period of relative underperformance.

At $485 per share, the stock is stuck in limbo, all while the S&P powers higher, led by the AI revolution. Indeed, with Berkshire’s cash hoard swelling, it feels like Berkshire could start trailing for some time. Either way, though, I view the conglomerate’s optionality as a unique asset, especially for those who want a more defensive play as market valuations fly higher and an AI boom south of the border looks to fuel an AI bubble.

AI bubble or not, it’s hard to tell how the boom in some parts of the AI trade will end. In any case, one has to think Berkshire, which hasn’t done anything in the past year, will be spared. It’s the ultimate defensive, in my view.

The post 2 Overlooked Stocks That Still Look Cheap Right Now appeared first on The Motley Fool Canada.

Should you invest $1,000 in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have over $17,000!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 92%* – a market-crushing outperformance compared to 86%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

Get the 10 stocks instantly

* Returns as of June 1st, 2026

More reading

• TSX Today: What to Watch for in Stocks on Thursday, May 28
• 2 Canadian Dividend Stocks Perfect for Retirees
• The Best Dividend Stocks to Buy and Hold Forever

Fool contributor Joey Frenette has positions in Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.