The age-old advice to “buy low and sell high” sounds simple, but it’s often much easier said than done. However, for patient investors, buying stocks on a dip can lead to substantial rewards, especially if you target companies with strong growth potential.
This year, the Canadian stock market has already faced a dip of about 7%. While it has mostly recovered, and the market has been trading in a sideways pattern for the past few months, pockets of the market still provide opportunities for savvy investors. Below are two top Canadian stocks that have recently dipped but could deliver significant upside for those willing to ride out the volatility.
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Kinaxis: A cloud leader with growth potential
Kinaxis, (TSX:KXS) a leader in supply chain management software, has experienced a decline of up to 21% from its late 2024 high of $190 per share to around $150. However, the stock is showing signs of recovery, recently bouncing back to approximately $160 per share. For investors who are willing to buy on the dip, Kinaxis could be an excellent opportunity, with analysts projecting near-term upside of over 20% from current levels.
Kinaxis’s flagship product, Maestro (formerly RapidResponse), provides real-time insights to businesses managing complex global supply chains. As the demand for supply chain optimization continues to grow, the company’s cloud-based solutions position it for long-term success.
Moreover, Kinaxis has consistently delivered strong revenue growth, with revenue per share increasing by 19% per year over the last five and 10 years. Its focus on innovation, particularly with artificial intelligence (AI) and machine learning, further bolsters its potential for future growth. Given its strong market position, expanding customer base, and forward-looking strategy, Kinaxis offers a solid opportunity for investors who are eyeing long-term growth after the dip.
Brookfield Asset Management: A global asset manager with a solid track record
For those looking for a more stable, diversified option, Brookfield Asset Management (TSX:BAM) is an interesting idea here. The stock has experienced a sharp decline of nearly 27%, dropping from a high of $90 to about $66 per share earlier this year. Since then, it has recovered to roughly $73 per share, making it a good consideration for dip buyers.
BAM’s diversified portfolio spans real estate, renewable energy, infrastructure, and private equity. As one of the world’s largest alternative asset managers, it offers investors exposure to high-quality, long-term assets that provide stable cash flows and growth potential.
The company’s expertise in managing large-scale assets and its global reach position BAM for sustained success. It has a proven track record of delivering consistent returns and is known for its ability to generate value through strategic investments. Since splitting off from its parent company in late 2022, the stock has delivered an impressive annual return of about 34%!
With BAM projecting earnings growth that can drive dividend growth of at least 15% per year, the stock offers a compelling long-term investment opportunity. At the current price, the dividend stock offers a dividend yield of 3.4%, which is attractive for a growth-oriented investment.
The Foolish investor takeaway: Why dip buyers should pay attention now
Both Kinaxis and Brookfield Asset Management have taken hits recently, but their fundamentals remain strong, and their long-term growth prospects are intact. Kinaxis is a leader in supply chain technology, poised to benefit from ongoing digital transformation, while Brookfield’s diversified portfolio of high-quality assets offers a stable foundation for continued growth and income generation.
For investors with a long-term horizon, these two stocks could provide substantial upside, making them ideal candidates for a buy-the-dip strategy. If you’re looking to capitalize on the recent market pullback, both Kinaxis and Brookfield represent opportunities for solid returns and strong growth.
