1 Undervalued TSX Stock Down 51% to Buy and Hold

This TSX stock plunged, but don’t count it out, especially at these prices.

Is your investing objective to identify potentially undervalued stocks on the TSX? Then, a prudent approach involves pinpointing companies that exhibit solid underlying fundamentals and promising prospects for future growth. One such TSX stock that often appears on the radar of value investors is TFI International (TSX: TFII) — a recognized leader within the dynamic transportation and logistics industry in North America.

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Recent market moves

As of writing, the stock of TFI International is trading at a price of $108 on the TSX. Over the preceding year, the TSX stock dropped from $221 down to $103 before coming to today’s price point. This might suggest a rebound in investor confidence and market valuation.

In its financial report for the fourth quarter of 2024, TFI International reported revenue of approximately $2.43 billion. This was generally in line with the expectations set by financial analysts covering the company. The TSX stock’s earnings per share (EPS) for the same quarter came in at $2.22, slightly surpassing the consensus forecasts.

However, it is important to note that the net income for the quarter was reported as US$88.1 million. This represents a decrease compared to the US$131.4 million in net income reported during the same period in the previous year. This dip in net income warrants further investigation into the specific factors that contributed to this variance.

Looking ahead

Despite the reported decrease in net income for the fourth quarter of 2024, TFI International maintains what is generally considered to be a strong overall financial position. The TSX stock currently offers a forward annual dividend of $2.59 per share. This, based on the current trading price, translates to a dividend yield of approximately 2.43%.

Financial analysts who cover TFI International generally remain optimistic about the company’s future prospects and potential for continued growth. The TSX stock’s well-diversified operations span across various segments of the transportation industry. This includes less-than-truckload (LTL), package and courier, truckload, and logistics.

This strategically positions it to effectively capitalize on a wide range of market opportunities and adapt to evolving economic conditions within the transportation sector. Furthermore, TFI International has a demonstrated history of strategic acquisitions that have historically contributed significantly to its overall growth, market share expansion, and enhanced service offerings.

Bottom line

Investing in TFI International, as with any publicly traded company, requires investors to carefully consider prevailing market conditions within the transportation and logistics industry. Investing also requires a thorough analysis of the TSX stock’s specific financial performance, including the reasons behind the reported decrease in net income.

The TSX stock has demonstrated resilience in its climb from its 52-week low. It offers potential for future growth based on its diversified operations and strategic acquisitions. Yet it is absolutely crucial for individual investors to assess their own personal investment goals, their individual risk tolerance levels, and their overall investment time horizon — all before making any investment decisions regarding TFI International. Conducting thorough due diligence and potentially consulting with a qualified financial advisor are always recommended steps in the investment decision-making process.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends TFI International. The Motley Fool has a disclosure policy.

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