Despite all the recession and tariff uncertainties, the TSX Index has been humming along. It’s managed to avoid a correction and may continue to stay resilient in spite of the growing number of headwinds that could apply a bit more pressure on the Canadian consumer. With the TSX Composite just over 1% away from its all-time highs, investors may be inclined to view this market as just a bit toppy. Indeed, whenever the list of uncertainties (there are many) is at a high point along with stock valuations, it’s hard not to be worried about the stage being set for some sort of near-term plunge.
Though it’s an anxious time to be an investor, I think timing the market will be a bad call through the year. At the end of the day, it’s impossible to tell whether 2025 will be a bad year, a sideways year, or another fantastic year for markets. Some tremendous events that we don’t expect will happen, and the impact on the markets could be significant. Either way, here are three robust stocks that I think investors can still buy on the cheap. Just because the TSX is near a high doesn’t mean all stocks are firing on all cylinders. In fact, some names have not only been left behind but crushed under their own slate of headwinds.
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TFI International
TFI International (TSX: TFII) is a less-than-load trucking company that got clobbered following the release of some brutal quarterly earnings results. The stock sank more than 20% in a day, marking one of the worst declines in recent memory for the $12.2 billion transportation firm. Undoubtedly, TFI ran into operating issues in the past, and the impact of the stock was quite horrid. With shares of the name stuck in the penalty box, I think there’s an opportunity to pick up shares on the cheap.
While the analyst downgrades are sure to come flowing in after a massive decay in profits amid a challenging environment, I continue to have faith in management. They’ve overcome and fixed operating challenges before, and I think they’ll do it again. It’ll just take some time. For now, the stock offers a nice 1.4% dividend yield for investors willing to reach out and catch the falling knife, which now trades at an absurdly low 18.4 times trailing price to earnings (P/E).
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX: ATD) stock is a convenience retailer with a strong long-term merger and acquisition-fuelled growth story that could find itself flirting with a bear market. Shares are down close to 18% from their all-time highs and could be at risk of a further fall should it end up paying a higher bill to take over the great 7-Eleven as Couche-Tard’s big bid draws in more interest in the iconic convenience store chain.
With the stock plunging on seemingly no news, I’d be inclined to jump in while shares go for 15.3 times forward P/E. The dividend, which yields 1.1%, is also quite bountiful following the latest slump.
While rather untimely (a back and forth with 7-Eleven could continue on for months), I view the earnings grower as one of the best value bets in retail today. Personally, I think a derailing of Couche-Tard’s 7-Eleven bid could be a massive positive for the stock over the near term. Perhaps using the funds for smaller deals and share buybacks could be a boon for a stock that’s been lagging for many quarters now.
