2 TSX Stocks I Can’t Wait to Buy When the Market Dips!

Scotiabank (TSX:BNS) and another stock may be worth watching if the stock market sags lower in the back half of the year.

| More on:
Target. Stand out from the crowd

Image source: Getty Images

The market’s legs have been going strong for many quarters now. Indeed, tech has been the big winner. Those who bought after the 2022 selloff worked its course now have bragging rights. That said, quick profits can be taken back by a market when the tables turn and greed turns back into fear.

The market tends to move back and forth between pessimism and optimism. If you’ve been around markets for long enough, you’ll know that the seeming good (or horrific) times do not last, even though it feels like such times will go on forever!

To be a true contrarian, you need to lighten up when others back up the truck in a given sector. On the flip side, you need to buy as others sell and give love to some of the sectors that nobody else seems to care for. In 2022, energy stocks finally got a bid higher, as commodities surged while the markets were weighed down by recession fears. For 2023, it’s been the financials that have dragged their feet, with banks sinking lower due to a wide range of negative headlines, many of which may be common knowledge at this point.

If you want to do better than the market averages over time, you’ve got to have more than just common knowledge. It can pay big dividends to bet against conventional wisdom, especially if emotions have gotten a bit out of hand!

Without further ado, here are two undervalued stocks I’ll be watching closely should the market rally begin to exhaust and pull back ever so slightly. Is a stock market correction overdue? Possibly. Will it be a doozy? Nobody knows. Probably not if there’s no hidden risk that’s unearthed, given last year’s ugliness!


Shopify (TSX:SHOP) is a top Canadian tech stock that’s had a pretty good year after last year’s travesty! Shares are up more than 75% year to date, thanks partly to a solid quarter and news of a strategic shift. The company is shifting away from logistics and more towards what it does best: commerce. This time, Shopify is exploring opportunities on the physical sales side, which should act as a nice complement to the robust e-commerce business.

E-commerce is still the bread and butter. And as Shopify prepares for the next expansionary market cycle, there could be a lot of room to soar higher. For now, Shopify stock is a tad too hot over the near to medium term. If a correction is in store for markets, Shopify is one of the names I’d carefully look to consider on weakness. The long-term story is still intact. But that doesn’t mean corrections won’t happen here and there!


Scotiabank (TSX:BNS) is a laggard with flat performance year to date. Shares have been under pressure since peaking back in early 2022. Down around 30% from the top, it’s hard to say when Scotiabank will be able to surge again. Regardless, I think the bank stock is severely oversold and potentially undervalued.

Indeed, shares are off 14% over the past five years! That’s some underwhelming performance. Still, I don’t think investors are giving Scotia enough credit for its long-term international growth prospects. At 9.66 times trailing price to earnings, with a huge 6.54% dividend yield, Scotia is one of my top high-yielding value plays this July.

If the stock inches closer to 2020 depths, I may just have to pick up shares, as the yield tests the 7% mark, even though I’m not an income-oriented investor. Why? The value is starting to get too good to pass up!

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 Shopify. The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy.

More on Investing

Early retirement handwritten in a note
Dividend Stocks

Retire Early With These 3 Canadian Passive-Income Stocks

Three Canadian passive-income stocks are smart choices for people with early retirement goals.

Read more »

Businessperson's Hand Putting Coin In Piggybank
Energy Stocks

This 7 Percent Dividend Stock is My Top Pick for Immediate Income

Looking for a solid dividend stock that can provide an immediate income source? Consider this dividend gem now while its…

Read more »

man sitting in front of 3 screens programming
Tech Stocks

Shopify Stock or Microsoft Shares: Better Buy for the AI Revolution?

Shopify (TSX:SHOP) and Microsoft (NASDAQ:MSFT) are two of the most impressive growth stocks to watch, as tech slips further from…

Read more »

Young woman sat at laptop by a window

2 Stocks to Buy That Canadians Interact With Every Day

BCE and Enbridge are industry leaders that provide essential services that homes and businesses need, regardless of the state of…

Read more »

Dividend Stocks

3 Dividend Deals You Won’t Want to Miss

Given their solid underlying businesses and stable cash flows, I believe three dividends stocks would be an excellent addition to…

Read more »

A worker gives a business presentation.
Dividend Stocks

For 6% Yields, Buy These 3 TSX Stocks Now

Companies like Enbridge offer high yields and are focused on elevating their shareholders’ value by bolstering dividend distributions.

Read more »

protect, safe, trust
Dividend Stocks

How to Invest $10,000 Today for Decades of Safe Passive Income

Want to earn safe and predictable passive income? Here are some ideas on how to invest $10,000 and earn +$400…

Read more »

protect, safe, trust
Dividend Stocks

Turn $15,000 Into Your Financial Safety Net

You can turn limited capital into a financial safety net by purchasing a high-yield stock paying monthly dividends.

Read more »