Here Are My Top 4 TSX Stocks to Buy Right Now

Long-term investors can take advantage of near-term headwinds to buy these four stocks on the dip.

| More on:
Volatile market, stock volatility

Image source: Getty Images

TSX stocks have had a strong start in 2024, but many stocks have taken a hit lately. Several great quality stocks have fallen back to earth, which means now might be a good time to buy the dip.

When you are a long-term investor, the best time to buy stocks is often when you have cash. But who doesn’t want to add to stocks when their valuations look attractive? If you want some quality TSX stocks on a pullback, here are four to consider adding to right now.

A TSX transport stock for the decades

Canadian National Railway (TSX:CNR) recently pulled back after it announced its first quarter results. The global freight environment has been extremely challenging. Volumes have fallen, and that impacted CNR’s results.

The company has been in a turnaround the past few years. It has focused on efficiency and velocity. Despite a weak quarter, it still upheld its guidance to grow earnings per share by 10% in 2024.

CNR has one of the best balance sheets in the rail industry. That provides ample flexibility if the economy continues to weaken further. Investors can also be opportunistic and buy back stock if its valuation declines. CN is a long-term stock. It is a great bet for long-term investors.

A great long-term stock facing near-term headwinds

TFI International (TSX:TFII) is another transport stock that has faced some headwinds. It came out with disappointing earnings in the first quarter. Its stock is down 17% in the month.

Transport volumes across North America are down. The slowdown is hitting almost every freight provider. TFI’s recent results were largely in line with expectations, but the market was surprised at how much the macro environment had deteriorated.

The good news is that TFI has many levers to pull. It is working to improve its network, lower costs, and streamline operations. It has a solid balance sheet and a great record of buying smaller transport businesses opportunistically.  

If this TSX stock pulls back more, it will likely buy back stock and continue to accrete long-term strong returns for shareholders.

An insurance business with a large growth opportunity

Trisura Group (TSX:TSU) has a history of delivering very strong returns for shareholders. However, last year it made some mistakes and the stock pulled back substantially.

Despite this, Trisura looks set up for a strong recovery in 2024. Trisura is a speciality insurance provider in Canada. It is also growing its specialty business in the U.S. where it already has a strong insurance fronting business.

This is a more complicated TSX stock to understand. However, over long periods, management has been very successful at growing this business. It has a large runway ahead. The stock trades at a large discount to peers and an attractive valuation (16 times earnings) today.

A top TSX software stock

Topicus.com (TSXV:TOI) stock has likewise recently been pulling back after a strong start to the year. Topicus.com is a spin-out from Constellation Software. The company is executing a similar software acquisition strategy as Constellation, but it has a specific focus on Europe.

While acquisitions have recently slowed, it has been delivering great organic growth. Topicus is a resilient business because much of its software is niche and very essential to its customers.

If the economy weakens, Topicus is likely to swipe up quality software businesses at a discount. I would be a serious buyer if this stock declined by a larger margin.

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 Robin Brown has positions in Constellation Software, TFI International, Topicus.com, and Trisura Group. The Motley Fool has positions in and recommends Topicus.com and Trisura Group. The Motley Fool recommends Canadian National Railway and Constellation Software. The Motley Fool has a disclosure policy.

More on Investing

Business success with growing, rising charts and businessman in background
Dividend Stocks

5 TSX Stocks With High Dividend Growth to Buy Now

These TSX stocks sport a high dividend growth rate and are known for consistently rewarding their shareholders with increased cash.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Canadian Blue-Chip Stocks: The Best of the Best for May 2024

These two blue-chip stocks are up in 2023, sure, but have seen even more growth in the last few decades.…

Read more »

Couple relaxing on a beach in front of a sunset
Dividend Stocks

Passive Income: How to Make $33 Per Month Tax-Free by Doing Nothing

Hold monthly paying dividend stocks such as Exchange Income in your TFSA to begin a tax-free stream of passive income…

Read more »

Marijuana plant and cannabis oil bottles isolated
Stocks for Beginners

What’s Going on With Canadian Pot Stocks?

Canadian cannabis stocks exposed to the U.S. saw a boost in share price this week from rumours that rescheduling of…

Read more »

Target. Stand out from the crowd
Tech Stocks

CGI Stock: A Heavy-Hitter That Just Jumped 4%

Shares of CGI stock (TSX:GIB.A) rose after seeing stronger results that put the acquisition tech stock back on the top…

Read more »

A plant grows from coins.
Energy Stocks

Say Goodbye to Volatility With Rock-Solid, Stable Low Beta Stocks

Hydro One (TSX:H) stock is a great volatility fighter for income investors seeking stability on the TSX.

Read more »

data analyze research
Dividend Stocks

Is Telus Stock a Buy on a Dip?

Telus is down more than 20% over the past year and now offers a great dividend yield.

Read more »

A plant grows from coins.
Dividend Stocks

2 Top Dividend-Growth Stocks to Buy in May

These two dividend stocks saw major growth after earnings that promised more was coming in the future. And now could…

Read more »