Global stock markets have been fluctuating unpredictably for several months, especially over the last few weeks. The inauguration of President Trump in the Oval Office and ensuing trade tensions have led to plenty of market volatility. Newer investors might be wary of allocating any money into the market during so much uncertainty. However, seasoned investors with a long-term view use it as an opportunity to invest in companies trading for lower-than-usual prices.
The S&P/TSX Composite Index, which is the benchmark index for the Canadian stock market, pulled back significantly between April 2 and April 8, 2025. Since then, the broader market has posted a significant recovery, and many investors trying to “time the dip” have missed out on opportunities. As of this writing, the market is up by 11.22% from its low on April 8, 2025. However, the Canadian stock market still has arguably undervalued stocks trading at a discount that are still up for grabs.
Today, I will discuss one such stock you can consider if you’re seeking investments that can deliver significant returns with a recovery to better levels with a relatively small amount.
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Logistics tech company
The global supply chain industry has been growing for several years, and it will only continue getting bigger as time passes. Supply chain problems have been a thorn in the side of companies worldwide, and there is a dire need to make them more efficient. This is where companies offering solutions to that end become incredibly important. Descartes Systems Group Inc. (TSX: DSG) is one such company.
Descartes is a $12.767 billion market capitalization logistics tech company that offers a software solution for clients around the world. The core product is the Global Logistics Network (GLN), a software that effectively lets users in the shipping industry communicate seamlessly with each other.
Descartes earns money by providing a reliable network that lets its clients send and receive messages, data, and crucial documents using GLN. The core product offers a solid base for Descartes to upsell various additional software modules with a Software-as-a-Service model that further increases its income.
The company’s platform is constantly going through changes to improve its offerings, maintain higher profit margins, and sustain a steady stream of acquisitions to expand the value it provides.
Foolish takeaway
Despite all the good things Descartes stock has going for it, the stock is trading at a significant discount. As of this writing, DSG stock trades for $147.97 per share, down by almost 17% from its 52-week high. For newer investors, the downturn in its share prices might seem alarming. For veteran investors who can see beyond short-term volatility, it is an appealing opportunity to invest in or increase their positions in Descartes stock to generate significant returns with its recovery.
The company does not have a debt-heavy business model, has high margins, a track record of consistent earnings growth, and a favourable outlook due to the growth of the industry it services. It might be one of the best investments to consider for your self-directed portfolio right now.
