Tariffs and trade wars are causing havoc with stock markets globally. While the Canadian market has fared better than its American counterparts, the TSX is still slightly in the red for the year.
Many Canadian stocks are down significantly more than the index. While some stocks deserve to be down given the tariff threat, others are down for less threatening reasons. If you are looking for some buying opportunities, here are three to contemplate today.
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A top Canadian retail stock
Aritzia (TSX: ATZ) stock is down 13.5% since the start of the year. The market has been worried about tariffs impacting Aritzia’s business because some of its clothing suppliers are in China. 57% of its business is in the United States. Fortunately, Aritzia has drastically diversified its supply chain away from China in recent years.
It appears tariffs could cause a margin impact, but only modestly. Meanwhile, Artizia continues to gain traction with consumers in the U.S. Recently opened flagship stores are performing very well. Aritiza continues to target eight to 10 new store openings in the U.S. for the next few years ahead.
The tariff news may mean international expansion plans could accelerate as well. Regardless, the company has a strong, cash-rich balance sheet and a great mix of brands.
It has multiple levers for growth. Its valuation has recently pulled down below its average. It could be an opportune time to pick up this stock for the long term.
An undervalued waste company
Secure Waste Infrastructure (TSX: SES) is not a name many Canadian investors know about. Yet, it is not a small business either. It has a market cap of $2.9 billion.
While many confuse it as an energy/well services business, it is, in fact, a major provider of waste management and energy infrastructure in Western Canada.
It operates over 80 waste management sites. Around 80% of its profits come from providing stable, recurring waste services to the energy industry. The company earns above-average margins over peers. It also happens to have a higher growth profile.
Yet, it trades at a fraction of the valuations other waste providers trade for. It also pays a 3.1% dividend. Its stock is down 20% this year. The company aggressively bought back stock in 2024, and I expect that should continue, given the depressed share price today.
A financial services stock
goeasy (TSX: GSY) is a bit of a higher risk, higher reward stock to look at right now. Its stock is down 5.8% since the start of the year and down 12.4% in the past 52 weeks.
goeasy is one of Canada’s largest non-prime lenders. This segment is considered risky, given customers’ low credit quality. As a result, goeasy stock sentiment is often correlated with economic volatility.
However, historically, goeasy has managed its loan book very prudently. It has managed through several recessions, and it always seems to come out on top. Earnings per share have risen by a 27% compounded annual rate over the past 10 years.
The good news is that the big banks have tightened underwriting policies. That is sending better quality clients to goeasy. New initiatives such as a credit card catering to the non-prime market could provide another leg of growth.
goeasy stock yields 3.8% now. With a price-to-earnings ratio of nine, it is trading at the low end of its long-term valuation range. That could make it an attractive time to add this stock if you can stomach the volatility that is inherent to this stock.
