As yesterday’s market action showed us, it’s a good idea to remain invested in value stocks even during times of market uncertainty. In fact, performance was quite impressive as stock markets rebounded fiercely. This was the result of the U.S. easing up on tariff threats. The NASDAQ rose 12%, the TSX rose 5.4%, and the Dow Jones increased 8%.
In this article, I would like to discuss a couple of Canadian value stocks I’d buy today despite all of the market turmoil and uncertainty.
Image source: Getty Images
Air Canada
It may seem like a nerve-racking idea to invest in Air Canada (TSX:AC) stock today. First of all, there’s the fact that tariffs are elevating the risk of a recession across the globe. Secondly, there’s the increased geopolitical risk that is having a dampening effect on travel, at least for now.
But if we look at Air Canada stock from a long-term perspective, we see that it’s cheap and it’s better than ever. Continued operational improvements, better planes, and greater efficiency have all boosted the company’s financial performance. Also, the airliner is increasingly a global carrier, with fast-growing routes to the Pacific region, which includes places like Japan and Korea.
Operating revenue came in at $22 billion in 2024. This compares to operating revenue of $19 billion in 2019. Also, adjusted net income came in at $1.335 billion in 2024 versus $917 million in 2019. The stock traded over $50 in 2019. Today, it trades below $15.
Today, Air Canada stock trades at a mere six times this year’s expected earnings and 5 times next year’s expected earnings. Air Canada has become a Canadian value stock that I would buy despite all the uncertainty.
Cineplex
Another Canadian value stock to buy is Cineplex (TSX:CGX). Cineplex is Canada’s leading movie exhibition company that has struggled since the pandemic. Before the pandemic, Cineplex was already facing the threat of streaming. This hit cinema attendance, but Cineplex adapted.
This meant that the company diversified into other segments, such as the gaming segment, which brought entertainment seekers areas to play — with attractions such as arcade games, bowling, and food and drinks. It also meant that the company began offering premium experiences at its cinema. Premium options such as VIP movies are very popular amongst movie-goers, and they’re higher margin revenue for Cineplex.
Today, Cineplex stock trades at 16 times this year’s expected earnings and only nine times next year’s earnings. And it doesn’t reflect the momentum that Cineplex is seeing. For example, in its latest quarter, attendance at its theatres increased 16%, and revenue increased 15% to $362.7 million. Also, its box office revenue per patron hit record levels, and margins were higher.
Looking ahead, Cineplex will be minimally impacted by all of the uncertainty. This is because it remains a relatively inexpensive form of entertainment, and it’s local. In fact, according to management, Cineplex has done well in most recessions. It’s a form of escape, after all.
The bottom line
In summary, I would position $7,500 in the two Canadian value stocks discussed in this article despite all of the market uncertainty. I would invest more in Cineplex stock, which is the lower risk of the two, in my opinion. $5,000 in Cineplex stock would give roughly 550 shares, and $2,500 in Air Canada stock would give roughly 175 shares.
