The TSX Index is posting enviable gains, but valuations, for the most part, still seem fair, especially compared to the metrics on the top indices south of the border (most notably, the S&P 500 and Nasdaq 100). In any case, not every stock has been in full-on rally mode alongside the TSX Index.
Some major names have been left behind. And investors may have a shot to buy shares at close to their 52-week lows as they attempt to participate a bit more in the broad market rally. Let’s check in on a trio of oversold Canadian stocks that I find absurdly cheap and worth loading up on this September.
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Alimentation Couche-Tard
I would have expected more from shares of Quebec-based convenience retail firm Alimentation Couche-Tard (TSX: ATD) in this booming bull market. Not only have shares of ATD trailed the TSX in 2025, but they’re in the red, down 6.5% year to date. In the past two years, the stock has not done much, apart from chopping around in a volatile fashion, with shares up just 2.5% in the timespan.
Can Couche-Tard make up for what has been a lost two years that involved chasing 7 & i Holdings with nothing to show for it?
That’s the big question. I think new investors are mistaken to give up on Couche-Tard here, especially now that it has a war chest to put to work and the valuation is relatively low.
Sure, some of it will go towards share buybacks, but don’t discount the potential investments to beef up its food offerings. And, of course, other M&A deals in the fragmented global convenience retail market can still be expected to contribute to growth over time. While driving synergies through deals is what Couche-Tard does best, I also see opportunity in organic efforts, specifically in specialty food items.
Guy Fieri and food are the way to growth!
Growth opportunities abound, whether we’re talking about collabs with foodie Guy Fieri or innovating with new, outside-of-the-box menu items that have been breakthrough successes for some of Couche-Tard’s American rivals. Consider Sheetz, Wawa, and Casey’s General Stores (NASDAQ: CASY), which are more than just convenience stores but places to get delicious, affordable restaurant-quality eats.
Indeed, Sheetz, Wawa, and Casey’s are the convenience retailers that have been profoundly successful. And Couche-Tard would be wise to follow their food strategies or, perhaps better, acquire one of the chains now that it has enough purchasing power to do so.
Though Circle K has tasty offerings of its own, I believe it needs to really hit the spot with some hot or fresh food item that acts as a “main attraction” of sorts to Circle K and Couche-Tard locations.
If Couche-Tard can win the convenience food war, its stock could rally furiously and make up for the past two years of lacking performance. Personally, I think teaming up with Guy Fieri is a genius move and a good start as Couche-Tard looks to get aggressive about becoming more of a food play that can stay competitive with quick-serve restaurants.
Restaurant Brands International
Speaking of quick-serve restaurants, we have Restaurant Brands International (TSX: QSR), which recently dipped to 52-week depths of $85 and change. With a 4% dividend yield and a world of opportunity to acquire another big restaurant chain, I remain a bull, even as others flee the stock.
In a prior piece, I highlighted QSR as a worthy Bill Ackman holding that may have been one of the cheapest of the stocks in Pershing Square’s portfolio. Though fast food hasn’t been a source of fast gains lately, I think things could change as inflation and jobs weakness look to nudge consumers more heavily towards the high-value fast-food chains.
As the home of Burger King, Tim Hortons, Firehouse Subs, and Popeye’s Louisiana Kitchen, I view QSR as a stellar bundle to play the space.
