2 TSX Value Stocks to Buy When Everyone Else Is Selling

I’m still puzzled as to why these two Canadian stocks continue to be ignored by the market.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published August 7, 2025 4:50 pm EDT

It’s not hard to feel the fear these days. With inflation creeping back, trade tensions rising, and the TSX lagging global markets, many investors are retreating to the sidelines. But sometimes the best opportunities come when others are giving up. If you’re willing to zig when others zag, two under-appreciated TSX stocks offer real value right now. Those are OpenText (TSX: OTEX) and Cargojet (TSX: CJT).

Let’s be clear: these aren’t flavour-of-the-month growth darlings. In fact, both Canadian stocks have seen their share prices slump over the past year. But scratch beneath the surface and there’s a very different story taking shape.

money goes up and down in balance — Source: Getty Images

OpenText

OpenText recently reported third-quarter results for fiscal 2025, and while total revenue dropped 13.3% year over year to US$1.3 billion, that headline masks some important wins. Cloud revenue, arguably the company’s most important long-term growth engine, rose 1.8% to US$463 million, marking its 17th straight quarter of organic growth. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) also held strong at US$395 million, giving the Canadian stock a healthy 31.5% margin.

CEO Mark Barrenechea acknowledged some “demand volatility” but emphasized OpenText’s ability to deliver free cash flow, and invest in strategic areas like cybersecurity and artificial intelligence (AI). The company’s Titanium X platform and Aviator AI suite are already expanding into hybrid environments, and OpenText has doubled down with a $200 million final phase of its business optimization plan. While this does result in 2,000 job cuts, it’s expected to save up to $550 million annually by 2027.

So, what’s the value proposition? OpenText is now trading at just 7 times forward earnings and 1.5 times sales, well below its historical average. It sports a 3.7% dividend yield with a sustainable 42.5% payout ratio and has repurchased $266 million worth of shares this fiscal year. With earnings per share (EPS) of US$0.82 in the last quarter and a forward price-to-earnings (P/E) ratio under 10, this Canadian stock is simply cheap. Especially for a company with nearly $1.3 billion in cash and over $1.4 billion in annualized adjusted EBITDA.

Cargojet

Then there’s Cargojet, a logistics name that has become something of a market punching bag over the last year. The Canadian stock is down roughly 17% over 12 months, even after delivering a standout Q1 2025.

Revenue rose 8.1% year over year to $249.9 million, while adjusted EBITDA increased to $80.8 million, translating to a solid 32.3% margin. Net earnings jumped 47.7% to $48 million, with basic EPS soaring 58.2% to $3.07. That’s no small feat in a tough global cargo market.

Despite soft free cash flow at negative $45.9 million this quarter, Cargojet is still buying back shares. It repurchased 272,922 shares for $32.2 million in Q1 and continues to reward shareholders with a 1.5% dividend yield and a payout ratio under 18%.

What’s holding the stock back? Concerns about debt (over $840 million) and volatility in the global trade environment have weighed on sentiment. Yet, Cargojet is well-positioned to benefit from changing trade patterns and near-shoring trends. It’s the only company in Canada with a national overnight air cargo network, and it continues to deliver on-time performance above 99%. That sort of operational dominance isn’t easy to come by.

Bottom line

To be fair, both Canadian stocks face their own risks. OpenText is still digesting the Micro Focus acquisition and has a heavy debt load, while Cargojet is exposed to cyclical demand swings and hefty capital costs. But the reward-to-risk ratio is tilting in investors’ favour, especially at current prices.

So when others are running scared, consider stepping in. OpenText and Cargojet are two TSX stocks trading at attractive valuations, supported by strong margins, improving cash flows, and long-term growth potential. Buying value doesn’t mean settling for mediocre. Sometimes it just means recognizing quality before the rest of the market catches on.