2 Hot TSX Stocks That Could Keep On Winning Through 2023

Onex (TSX:ONEX) is a great value play that investors may be sleeping on.

| More on:
Gold medal

Image source: Getty Images.

Most TSX stocks were major laggards through 2022, but there were a few names that bucked the trend, rallying higher in the face of the rate-driven market selloff. Undoubtedly, momentum investors may be inclined to chase “what’s working” in this hostile market environment where there’s volatility all over the place. Though momentum-based investment strategies seldom produce desirable results over the long term, I view the two names outlined in this piece as more than capable of continuing to win as the storm of recession headwinds comes rolling in.

As always, investors need to put in ample due diligence before investing a penny into any name. With the S&P 500 fluctuating in the depths, it’s unclear as to what can get it unstuck. Indeed, plunging inflation and resilient earnings could do wonders. However, many investors fear that the impact of recent rate hikes has not yet worked its way into earnings. This could make for a jittery market environment through the first half of the year.

In this piece, we’ll consider two value-rich TSX stocks that are still reasonably priced in my opinion. Without further ado, consider shares of insurance and investment holding company Fairfax Financial Holdings (TSX:FFH) and investment and asset management firm Onex (TSX:ONEX).

Fairfax Financial Holdings

Fairfax stock has a knack for zigging when markets zag. The stock outperformed during the Great Financial Crisis and could be in a spot to outdo markets in a potential 2023 recession.

Indeed, Fairfax is an insurer with an improving track record. However, it’s the investment side of the business that makes me optimistic about the firm’s market-beating abilities. Run by Prem Watsa (Canada’s Warren Buffett), Fairfax is a hedge fund-flavoured play. Watsa loves a good value proposition, and he’s willing to place a big bet in his best ideas.

His ideas don’t always pay off, but I think his abilities can turn Fairfax into a market beater when the times get tough. At 33.8 times trailing price-to-earnings (P/E) ratio, I don’t think the stock is appreciated by investors.


Onex stock is another investment management play, but one that got crushed in 2022. Shares fell around 36% at its worst, but the name has since stabilized. The main draw to the firm (behind such firms as WestJet) is the valuation. The stock trades at 0.51 times price to book, making it one of the cheapest deep-value plays in the mid-cap space.

Further, Onex stock goes for 4.7 times forward P/E. Indeed, Onex isn’t as lowly correlated as the likes of a Fairfax can be when times get tough. However, fans of getting a big bang for their buck should look no further than the name, as the upper-level faces a refresh for the new year.

With founder Gerry Schwartz departing as chief executive officer, Onex faces an interesting roadmap in 2023. Macro headwinds could continue to weigh, but one has to think that most of such negativity is already baked in.

Bottom line

Fairfax and Onex are great value plays that could help you better navigate the choppy waters of 2023. Personally, I like Fairfax more at these levels. I’m a fan of Prem Watsa and think he can turn a recession year into a year of gains for shareholders.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fairfax Financial. The Motley Fool has a disclosure policy.

More on Investing

A shopper makes purchases from an online store.
Tech Stocks

Better Buy: Shopify Stock or Amazon?

Let's see which e-commerce stock is a better buy between Shopify and Amazon in 2023 and beyond.

Read more »

Growth from coins
Stocks for Beginners

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking for some smart buys for your portfolio? Here are two great options to buy now while you…

Read more »

stock research, analyze data
Bank Stocks

Better Buy: TD Stock or Bank of Nova Scotia?

TD Bank and Bank of Nova Scotia still look cheap. Is one a good buy today?

Read more »

Dial moving from 4G to 5G
Dividend Stocks

Down by 15%: Is BCE Stock a Good Investment in January 2023?

Few companies are truly “too big to fail,” but most market leaders are far more resilient against market headwinds or…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

Looking for $200/Month in Alternative Income? Buy 530 Shares of This Stock

Do you want to earn $200 monthly alternative income for the next few years? Then accelerate your investments in this…

Read more »

Dividend Stocks

Deadline Coming: 3 TFSA Stocks to Buy Now Before Dividend Payouts

Invest in RNW stock and 2 other TFSA friendly names before this fast-approaching deadline to get the full 2023 dividend.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Passive Income: How to Earn Nearly $367 Per Month in Your TFSA Portfolio

Top TSX dividend stocks now trade at discounted prices for TFSA investors seeking passive income.

Read more »

Businessman looking at a red arrow crashing through the floor
Tech Stocks

3 Growth Stocks Down Over 50% That Are Screaming Buys in January 2023

Given their healthy growth prospects and discounted stock prices, these three growth stocks could deliver superior returns over the next…

Read more »