As the TSX Index begins to run out of steam after an impressive second-quarter rally, investors may wish to keep watch of the stocks that have a good amount of long-term momentum behind them and valuations that aren’t all too much higher than that of the historical range. Indeed, investors should also have a preference for the firms that have robust, resilient fundamentals that stand to improve over time.
With the broad markets taking a slide on Friday’s turbulent session and the first day of August, perhaps it’s time to swoop in and pick up some of the still-heated names that found themselves lower on a day that I think was met with a slight hint of panic selling.
Are we overdue for a correction after that amazing quarterly bull run? Perhaps. But it’s the firms that don’t deserve to be punished, but were nonetheless, that I think could be terrific pick-ups as we navigate into arguably one of the roughest patches of the year.
Though the TSX Index’s run may be derailed, the following pair seems to be more than able to keep moving against the tides.
Source: Getty Images
TD Bank
TD Bank (TSX: TD) investors who stayed the course through a brutal 2024 have now been rewarded with a 31% gain year to date.
Despite slipping just shy of 3% off highs of $102 and change, I think TD still has legs (and a multiple that’s low enough) to take it past the $110 level by year’s end. Indeed, 10.3 times trailing price to earnings (P/E) still makes TD a cheap stock, especially compared to some of its peers in the Big Six banking basket.
Additionally, the bank has a new CEO, and cost-reduction plans could boost profitability over the next year or so. Combined with TD’s tech-savvy (digital banking) and upside in net interest margins in U.S. retail, it’s clear that TD is a name that’s ready to move on.
Agnico Eagle Mines
Agnico Eagle Mines (TSX: AEM) stock has been even hotter than shares of TD, now up more than 46% year to date. Indeed, the soaring price of gold makes a miner like AEM worth its weight in gold!
For investors who don’t yet have a hedge against geopolitical turmoil and a weakening U.S. labour market, perhaps now is a prime time to be a buyer of a top-notch gold miner. With a 1.3% dividend yield and plenty of room to catch up to the strength in gold, I’m inclined to pound the table on shares of AEM.
It’s not just a name that can surge in the face of a more chaotic environment for stocks (0.49 beta means less correlation to the TSX Index), but it’s also a name that could blow away future quarters if gold keeps rising at this pace while the firm continues posting some impressive production numbers.
Indeed, more gold at higher prices could mean huge things for Agnico, a premier miner that I don’t think has the full respect of retail investors quite yet.
