Even though Canadian stocks took a tumble last week, any further market weakness might be a great buying opportunity. As Warren Buffett famously said, “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
Often the best time to add individual stocks is when the market temporarily puts them on discount. If you can be patient and think long-term, high-quality stocks are quick to recover value.
You’ll be happy you added them when things looked ugly. If you are looking for Canadian stocks to buy now and hold for decades, here are three to buy today.
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A Canadian trucking stock
While TFI International (TSX: TFII) stock is up 13% in 2024, it is down 4% in the past five days. If this Canadian stock pulls back any further, it could be a good buying opportunity.
TFI is not in the most exciting industry. It operates a conglomerate of trucking, shipping, and logistics providers across North America. This sector has been beaten up due to a slower economy and a weak freight environment. Nonetheless, TFI has a lot of things you want in a high-quality Canadian stock.
Firstly, it has a long-term CEO that is highly invested alongside shareholders. Secondly, it has a low-cost operating model that typically generates sector-leading returns on capital.
Thirdly, TFI has had a very successful mergers and acquisition strategy. Lastly, it has a history of rewarding shareholders (buybacks and dividend growth). What more can you want from a stock to hold for the next 10 years?
A top real estate services stock
Colliers International Group (TSX: CIGI) has a similar set up to TFI. Elevated interest rates have drastically slowed commercial real estate activity. Being a significant commercial real estate broker around the globe, this has temporarily hurt Colliers’ business.
However, several catalysts make this Canadian stock attractive today. Firstly, the company has become a diversified services provider. Over 70% of its earnings now come from recurring service businesses like property management, financing, project management, engineering, and asset management.
Secondly, interest rates are coming down. As a result, real estate transactions are starting to recover. Right now, you can buy the stock and get the capital markets business at a serious discount. Transaction activity only needs to normalize for the company to see earnings drastically increase (and the stock to rise).
Like TFI, Colliers has a long-term CEO who is one of the largest shareholders. The company invests with a long horizon, so it deserves long-term partner/shareholders.
An up-and-coming Canadian insurance stock
Another Canadian stock worth holding for a decade is Trisura Group (TSX: TSU). Colliers and TFI are already established businesses. Trisura is the up-and-comer in this list. With a market cap of $2 billion, it is one of the smaller listed insurance companies.
However, it has come a long way. TSU stock is up 480% in the past five years. The insurer provides specialty insurance products and insurance fronting in Canada and increasingly the U.S.
Trisura is a very smart underwriter in its specialized fields. That helps support high-teens operating returns on equity. After a tougher year in 2023, the company is growing revenues and earnings per share by a high teens rate.
This Canadian stock still has significant opportunities for expansion. It trades at a big discount to other specialty insurance peers, so the recent pullback is an excellent time to add shares.
