Canadian Stocks That Surprised Investors in 2024

The year 2024 was a mixed bag of predictable growth and surprises. Three Canadian stocks surged 30-50% in a year to their all-time highs.

Puja Tayal

Author Bio

Puja Tayal grew up in a small-business family where dinner conversations often centred on working capital and savings. Her early experiences with investing, particularly during the 2008 financial crisis, shaped her approach to understanding markets and evaluating investment opportunities. She began her career at a mutual fund company before moving into investor education and financial writing for asset and wealth management firms. Before joining The Motley Fool, Puja wrote for Market Realist, where she extensively covered the semiconductor industry. Her published work has also appeared in The Indian Express. Puja believes every stock has a story that can help investors understand its potential returns. She combines business analysis with different investing approaches to help investors make informed decisions and align their portfolios with their long-term financial goals. Outside of finance, Puja enjoys long drives, catching up with friends, watching superhero and science-fiction movies, and managing her family portfolio. She also has a keen interest in artificial intelligence and its potential to reshape the world.

Education

Bachelor's degree in Accounting and Finance, University of Mumbai (2007)
CFA Level I

Areas of Expertise

Qualitative company analysis, management strategy, risk assessment, long-term investing, portfolio diversification and rebalancing, dividend reinvestment, cyclical growth opportunities, compounding strategies, growth stocks, and dividend stocks.

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Favorite Investment Quote

"Risk comes from not knowing what you're doing." — Warren Buffett

Published January 20, 2025 10:00 am EST

Last year set the stage for the stock market recovery as the Bank of Canada began cutting interest rates. Real estate stocks saw an uptick, but that was expected. Housing prices eased due to a reduction in borrowing costs. However, some stocks that showed laggard performance over the years suddenly surged to their respective all-time highs in 2024.

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Three Stocks That Surprised Investors in 2024

Descartes Systems

Descartes Systems (TSX: DSG) stock surged as much as 53% in 2024 after a 10% decline in 2022 and an 18% surge in 2023. The accelerated surge came despite normal revenue and earnings growth trends. The growth momentum of the stock picked up in September 2024 as the holiday season preparations started heating up. Descartes saw a surge in demand for its global trade intelligence, routing, and transportation management solutions.

The stock surged 9% in the week of November when the U.S. election results were out and Donald Trump was elected. Trump had been vocal about imposing 25% import tariffs. And if we take reference from history, in his previous term as the U.S. president, Trump began a trade war with China in 2018. Descartes reported a 16-18% average annual revenue growth between 2018 and 2020 as the demand for global trade intelligence and regulatory compliance solutions increased.

Descartes stock’s 53% surge has inflated its valuation to 49.5 times its forward earnings per share. While the stock is a buy at any price because of its resilient long-term growth, you could consider waiting for a dip around mid-2025 to buy the stock. If you already own the stock and want to book profits, now is a good time while the stock trades 8% below its all-time high of $174.24.

Enbridge stock

Enbridge (TSX: ENB) stock, popular for its rising dividends and range-bound share price, made a remarkable rally of 30% in 2024 after falling more than 9% in 2023. The stock is trading above $63, a level last seen in April 2015. What led to Enbridge’s rally?

Enbridge’s share price started growing from July 2024 onwards as the interest rate cuts began. The company has a significant debt on its balance sheet, and it took more debt to fund the acquisition of three U.S. gas utilities last year. Around 10% of its debt portfolio is exposed to floating interest rates. A 25-basis point rate cut reduces its monthly interest expense by around $2.5 million. The Bank of Canada slashed rates by 175 basis points last year, resulting in a $17.5 million reduction in monthly interest expense.

Another big jump came from Trump’s election as U.S. president. He supports oil and gas over renewables. Enbridge stock is closer to oversold and is trading at high valuations compared to the last few years. Even though Enbridge is a long-term dividend stock, now is an opportunistic time to sell the stock and book profits as the price above $60 comes once in a decade and is not sustainable. You could buy the stock when the price falls below $50 by mid-2025.

Manulife Financial

Manulife Financial (TSX: MFC) was another dividend stock that surprised investors as its share price appreciated as much as 57% in 2024. The stock reached its all-time high of $46.42 and fell 8% in January. The last time Manulife stock crossed the $42 mark was in December 2007. This could be a warning sign as the 2008 Financial crisis saw bank and lending stocks fall and insurance stocks rise despite interest rate cuts. Now is a good time to sell the stock if it is in your portfolio.

How to make the most of 2024 rally

Now is the time to sell the rally of the above three stocks and buy them at the dip. All three stocks have strong fundamentals. However, the share price and valuations are at their highest, creating an opportunity to book profit. You could consider buying real estate stocks to park your money and earn monthly dividends while you wait for these stocks to fall.