When going on the hunt for a deal in the stock market’s bargain bin, investors shouldn’t just load up on the name that’s farthest away from its all-time highs. Sure, getting a stock that’s gotten a 50% haircut feels good. But just because shares have been cut in half does not mean they’re near a bottom and can’t depreciate further.
Indeed, a stock can get cut in half more than once! And that’s why it’s so important to stick with the proven, quality companies that you understand, and, perhaps most importantly, understand how to value, given the unique growth path ahead.
In this piece, we’ll look at a pair of quality stocks that I think could be in for a continued summertime recovery. Though new highs may or may not be in the cards by the time summer 2025 comes to an end, I think the following are great bets in the here and now.
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Constellation Software
First up, we have Constellation Software (TSX: CSU), which is down over 15% from its all-time high. It’s been a lacklustre 2025 for the name, to say the least, with shares actually down 1% while the rest of the tech sector has been booming. So, what’s behind the latest correction in shares of CSU? And is it more of a buying opportunity than a sign that its fortunes are turning lower at a time when things couldn’t be stronger for tech?
The company reported some pretty mild results this year. Indeed, many were left disappointed after the second quarter. And while traders may run to the hills, fearing that Constellation is missing out on the artificial intelligence (AI) boom, I think that the latest dip is nothing more than a chance to buy at a discount.
With shares going for well over $4,000, the name is out of the reach of many new investors. However, if you’ve got the capital, I think it’s far better to pay closer to $4,000 than over $5,000, where the name once traded. I have no idea when CSU stock will gain again, but I think it’s too wonderful a business to ignore while it’s trending lower.
For Constellation, growth by acquisition is the name of the game, and if some new deal (or deals) happen, I think the stock can march higher again. If the firm buys an AI startup, the stock may garner enough interest from the Bay Street crowd again. Either way, shares look like a decent value right here for investors seeking growth at a discount. With a lower bar ahead of earnings, perhaps CSU stock is a name that could recover sooner than you think.
Waste Connections
Waste Connections (TSX: WCN) has also been getting dumped by investors (pardon the pun!) this year. In the past year, the stock is up around 2%, trailing the broad markets by a long shot. Indeed, recent quarters have been decent, and the firm has exhibited impressive pricing power (you can’t really negotiate waste collection prices!). With steady growth and a solid track record of mergers and acquisitions, the firm’s moat only stands to get wider with time.
As the firm incorporates AI to enhance efficiencies, perhaps there’s upside in operating margins. Either way, Waste Connections has a strong balance sheet and enough fuel in the tank to make another deal to bolster earnings growth amid headwinds.
With maintained guidance for the full year despite these headwinds, I view WCN stock as a stellar name to buy after its overblown correction off highs.
