Don’t discount the growth potential of the mid-cap Canadian stocks, especially now that the TSX Index is fresh off a dip (a near correction, if you’d like to call it that). Undoubtedly, mid-cap stocks can be a choppier ride. While they may not be necessary to build a solid portfolio aimed at long-term growth, I think that diversifying into the lesser-known smaller-cap names could prove a wise move, especially for those investors out there who want to unearth potentially hidden gems. Indeed, it’s nice if you can get a bit more bang for your investment dollar, even if it entails looking to corners of the Canadian stock market where most other retail investors don’t spend nearly as much time.
Indeed, there may be slightly greater discrepancies between the market price of a mid-cap stock and its true worth. As a value investor, you should strive to find such opportunities to pay three quarters to get a full dollar. And while such opportunities don’t come along all that often, especially with the large-cap blue chips that investors (and those in the mainstream financial media) spend most of their time following, I think the odds for deeper value exist in somewhat greater abundance in the smaller-cap waters.
Sure, trading volumes may be lower, and the volatility may be tougher to bear, but if you consider yourself a deep-value investor who’s willing to find value wherever it can be found in the markets at any given time, the following mid-cap stocks, I believe, are fantastic gems worthy of adding to your radar or buying today while they’re off a bit from their prior highs. In this piece, we’ll have a quick look at two names that I think look way too cheap going into April 2025.
So, if you’re ready for a mid-cap bargain, the following pair may be worth revisiting.
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Aritzia
Aritzia (TSX: ATZ) is a reasonably popular women’s clothing brand with a stock that you may have forgotten about. Indeed, shares of the well-run retailer probably don’t get as much attention as they deserve, especially given the robust brand and lengthy growth “runway” in the U.S. market.
In any case, with the stock recently nosediving over 25% from 52-week highs, I think there’s an opportunity to pick up a few shares of the $6.1 billion retail growth gem on the way down. Indeed, tariff threats could act as an overhang for some number of months. But if you consider yourself a long-term investor, I’d be willing to start buying at close to $50 per share. The growth profile is heavily underrated, at least in my view.
Jamieson Wellness
Jamieson Wellness (TSX: JWEL) is another legendary Canadian brand with a stock that’s a mid-cap. At writing, shares boast a $1.25 billion market cap. The stock is down 22% from its 52-week highs and could be a great pick-up for value investors seeking a good mix of growth and defensiveness.
At 24.9 times trailing price to earnings, JWEL stands out as a terrific bet. Near-term headwinds could weigh, but secular drivers (the wellness trend), I believe, are still worth getting behind. Finally, the dividend yield is close to the highest I’ve seen it at just shy of 3%. If you like the product and the brand, perhaps it’s time to think about picking up the stock as we spring into the spring season.
