When quality meets a discount, long-term investors should pay attention. Onex (TSX: ONEX), a Toronto-based private equity and asset management firm, has been quietly strengthening its financial position while its share price has lagged. In fact, ONEX stock is up about 22% in the last year, yet it is still an under-the-radar stock that deserves a second look.
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About Onex
At first glance, Onex isn’t the flashiest name on the TSX. It doesn’t dominate headlines, nor does it ride the waves of tech hype. But behind the scenes, it’s doing the kind of solid, strategic work that builds value. And in its most recent earnings, the results speak for themselves.
For the first quarter of 2025, Onex reported net earnings of $168 million, or $2.36 per diluted share, up sharply from just $10 million, or $0.13 per share, a year earlier. Total segment net earnings surged to $148 million, from $28 million the year before, while fee-related earnings flipped from a loss of $12 million to a modest gain. That’s the kind of turnaround that doesn’t happen by accident.
Gaining momentum
It’s clear that Onex has been tightening operations. CEO Bobby Le Blanc highlighted the Canadian stock’s shift toward businesses where it has a “proven right to compete,” and the results show that this isn’t just corporate speak. Both its Private Equity and Credit divisions raised a combined $2.5 billion in new fee-generating capital so far this year. That adds to a war chest of $36.9 billion in fee-generating assets under management (FGAUM), up 17% year over year.
This momentum is especially meaningful given the Canadian stock’s rock-solid balance sheet. Onex remains debt-free, with $1.6 billion in cash or near-cash on hand. That kind of flexibility gives it a strategic advantage. And that could include a repurchase program. In Q1 alone, the Canadian stock spent $98 million to buy back 1.38 million shares at an average price of $102.09.
Considerations
Of course, no Canadian stock is without its weak spots. Fee-related earnings are still relatively low and have only just returned to positive territory. And while asset management can be a lucrative business, it’s also cyclical. If capital flows slow or markets turn south, performance fees and new fundraising can dry up quickly. But Onex seems to be positioning itself well to weather those cycles.
More than anything, what makes this Canadian stock attractive right now is its valuation. As of Mar. 31, 2025, Onex’s investing capital per share stood at $168.28. That means the Canadian stock trades far lower than its investment capital value. It’s not often you find a TSX-listed company with a five-year compound annual return of 17% on its investing capital, yet trading at such a steep discount.
Bottom line
Over the past five years, Onex has quietly built a high-performing, well-diversified investment machine. With strong earnings growth, solid private equity and credit platforms, a massive increase in FGAUM, and a substantial cash position, the company is doing everything right operationally. Yet the market hasn’t quite caught up.
That’s why I consider Onex my bargain of the decade. It offers all the hallmarks of quality, but trades far below value. That disconnect won’t last forever. When the market finally realizes what Onex has become, this discount will close fast. If you’re a long-term investor looking for value in an overpriced market, don’t overlook Onex. Sometimes the best deals are the ones hiding in plain sight.
