If you’ve got an extra sum of savings that you’ve been meaning to invest but have been putting it off due to Warren Buffett’s relative lack of net buying of late, you’re not alone. Undoubtedly, whether it’s due to a lack of market bargains that are large enough to move the needle or other risks that investors may be heavily discounting, I think that Buffett and company have their reasons for accumulating record cash loads.
While a market correction is always a possibility, especially since we’ve gone without one for more than a year and a half, I think that such pullbacks are nothing to be sidelined over. Waiting for a correction seems prudent on paper. But, in reality, waiting for such an event is still timing the market. And if you can’t afford to risk being out of the stock market amid its latest bullish ascent (let’s say you’re a young investor who has time on their side and ample income coming in), being sidelined may not be the best for the long-term growth of your nest egg, especially inflation makes a comeback.
Indeed, tariffs can act as gas for higher inflation. In any case, new investors should stay the course, as usual, instead of scaring themselves to the sidelines.
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TFI International
TFI International (TSX:TFII) shares just got walloped following a brutal quarterly earnings showing. Add tariff uncertainties into the mix, and the name looks too scary to buy on the dip. That said, after plunging another 4.3% on Monday’s session, the trucking transport firm has now seen its shock shed more than 30% in the past week — an excessive decline, to say the least, and one that I think may be overblown. Sure, the fourth quarter was rough, and more headwinds could hit the firm ahead. That said, I think there’s ample value for those willing to hold the name for the next five years.
The firm has recovered from vicious declines before, and I feel it’ll find its footing in due time. In the meantime, there’s a nearly 2% dividend yield to collect while you wait for investors to get over the brutal quarter. Furthermore, at 13 times forward price-to-earnings (P/E), TFII shares look like more of an overlooked deep-value play. While there could be more pain ahead, I view the latest plunge as more of an opportunity for long-term thinkers who like the story and believe in management’s ability to land on its feet, as it has in the past.
Bank of Montreal
Bank of Montreal (TSX:BMO) is another solid value stock that looks tempting as it continues its modest recovery from multi-year lows. Though shares are flirting with 52-week highs, I still view the $104 billion Canadian bank as one of the more tempting Big Six names to pick up right here. The stock goes for 14.9 times trailing P/E with a 4.45% dividend yield.
With a robust commercial presence on both sides of the border and some of the best managers in banking, I’d treat any dips below $140 per share as a potential entry point. Either way, I wouldn’t bet against the name, even if Canada’s economy is stress-tested by potential Trump tariffs. The bank knows how to navigate less-than-optimal environments. Perhaps BMO’s lesser exposure to Canada’s housing market is a top reason to opt for BMO shares over its Big Six rivals if a recession (and bear market) comes knocking by year’s end.
