Value hunters looking to start the new year (and their 2025 TFSA contributions) on the right track should actively pursue some value options in this market. Indeed, there are plenty of them, even as the TSX Index looks to resume the progress it made in 2025.
Though I think 25% Trump tariffs on all goods represent a bear-case scenario, investors should be prepared for everything and anything. That said, one should focus more on the long haul (think the next 15 years) rather than the sure action we’re to see (or even be slightly rattled by) in these coming months.
As for value options, I’d prefer a more “bottom-up” approach, starting with robust (perhaps misunderstood) fundamentals and balance sheets. Indeed, the macro picture may or may not be better than expected in any given year. Though January can set the tone for the rest of the year, I don’t think value investors should base long-term decisions on random near-term fluctuations.
As always, the return from stocks is the reward for riding on the theme park ride, which is the stock market. There will be ups and downs. The key is keeping your food down when the downs eventually come. In the case of value stocks, I think they can help position your portfolio well for the extended horizon. Here are a few lesser-known mid-cap Canadian stocks I’d look to for extra value. Indeed, sometimes, the best deals lie with the less-watched names.
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Spin Master
Spin Master (TSX: TOY) looks like a deep-value stock with shares going for just 8.9 times forward price to earnings (P/E). Sure, mid-cap companies (Spin Master is a mere $3.22 billion company) may be choppier rides with narrower economic moats (if any at all).
However, in the case of Spin, I view it as a durable company with an extensive moat consisting of some of the best brands in the industry. Indeed, Spin Master is behind such classics as Gund plushies and Etch-a-Sketch, in addition to a wide range of newer innovations. While we may know Spin best for its toys, shows, and films (think Paw Patrol), I’d not discount the digital business, which could pick up traction after hitting a few road bumps last year.
Notably, Toca Boca is an intriguing brand that I believe could be a source of digital strength for the firm for many years to come. Indeed, margins are in a rough patch today, but as Spin encounters an improved consumer environment, I’d not count shares out as they attempt to break out of a consolidation channel in the low-$30 range.
Cargojet
Don’t look now, but it’s off to the races for Cargojet (TSX: CJT) stock again, which is up a blistering 23% in the past month. Indeed, a V-shaped recovery from the late 2024 trough seems to be in the works. Looking further down the road, I think CJT stock could be off to a durable bull run that could span the latter half of the decade as it looks to climb back from the nasty three-year sell-off that wiped out a great deal of shareholder value.
The $2 billion overnight cargo airline looks in great shape as it leaves the tarmac. The good news is it’s not too late to punch a ticket before consumer spending jolts demand for such essential overnight shipping services.
