The latest wave of tariff volatility has likely left a pretty nasty dent in your Tax-Free Savings Account (TFSA) portfolio. Undoubtedly, checking your stocks and seeing how much you’re down on any given day or week is discouraging. And while there’s no telling when the Trump tariffs will end, as the U.S. and Canadian economies face a potential economic downturn over the months again, I think there’s already plenty of pessimism that has been priced into a wide range of names that are starting to trade on the cheap. Indeed, things could always get worse, and the cheap plays you see today could become massive bargains.
That’s why it’s good to buy small amounts slowly on the way down. Nobody wants to be a hero and risk running out of cash in the earlier innings of the sell-off, especially if the TSX Index follows in the footsteps of the S&P 500 or the Nasdaq 100, both of which are now officially in correction territory (that’s a 10% fall from highs). So, if you’ve been putting off new buying because of valuation concerns, telling yourself you’ll wait for a correction and better deals before starting doing some buying, here we have it.
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Canadian stocks still worth buying amid oversold conditions
Of course, things have gotten quite scary and highly uncertain with a trade war that could wallop markets on both sides of the border. That said, a correction is a correction, and long-term investors should view it as a chance to put money to work in some of the less-risky names while they’re trading at increasing discounts to their true worth.
In this piece, we’ll look at two Canadian stocks worth adding to your bargain watchlist as Trump tariffs drag the broad TSX Index closer to correction territory. At the time of writing, the TSX Index is down around 6.3%, which is much less than the S&P 500. Whether the negative momentum accelerates or the TSX Index holds its own remains to be seen. Either way, “buying Canadian” could apply to the stock market at this time of year while the loonie remains under US$0.70.
Canada Goose
If you do not fear volatility and want a deep-value option, Canada Goose (TSX: GOOS) stands out as a market bargain right now while it’s going for 17.0 times trailing price to earnings (P/E). The stock has already shed more than 80% of its value from peak levels and appears poised to keep making new all-time lows. Indeed, it’s quite rare to find a stock that’s at all-time lows.
Either way, GOOS shares seem way too cheap at just $12 and change per share. The latest tariff news has acted as salt in the wounds of the stock. And if Canada and the U.S. sink into a recession, such an upscale parka maker could be dealt with a one-two combination to the chin. That said, fears of a downturn in consumer spending and tariffs’ impact already seem largely priced in. With a strong brand and the ability to amplify gains come the next market expansion, I’d stick by the name, even if it’s destined for single digits over the coming months.
