The TSX has been on an astounding roll in 2025. Every day the S&P/TSX Composite Index seems to charge up to new record highs. It just hit nearly 30,700 points! That puts the Index up 24% for 2025 and 26% for the past 52-weeks.
The TSX has soundly outperformed the S&P 500, which is only up 13.8%, and the NASDAQ, which is only up 17.5%. However, the TSX returns have been more concentrated than most would realize.
Nearly half of the 24% gains are actually from mining stocks charging higher. The other half of the gains have come from strength in financials, utilities, and staples.
Given the market’s strong gains, many stocks in these segments are fair or even overvalued at this point. However, there are a plethora of TSX stocks that aren’t enjoying the love. They are on sale from the bargain bin. You might have to be a little contrarian but these two high quality TSX stocks look like screaming buys.
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Constellation Software: Down, but better days to come
2025 has been one of the worst years on record for Constellation Software (TSX: CSU). Its stock is down 12.9% for the year. However, it has been cut nearly 25% from its all-time high of $5,181.
First, it was worries about the artificial intelligence (AI) impact on Constellation’s many vertical market software businesses. Second, its long-time CEO and founder, Mark Leonard, suddenly retired due to health reasons. The second event saw the stock tumble by 27% in an hour at one point.
Of course, both items are risks worth monitoring. But, at this point, they are not terminal risks. The new CEO, Mark Miller, is highly skilled as the Chief Operating Officer. He has been with Constellation since its first acquisition. Mark Leonard built the system and the platform, but Mark Miller executed it.
AI might be a risk, but it could also be an opportunity for the business. Right now, the market is preferring only the risk side of the equation. Constellation is an exceptional company. That is not going to change just because investor sentiment has. AI could push margins and efficiently expand its services to new customers.
You can pick up this stock at a 20–25% discount to just a few months ago. It’s a great opportunity to give this quality TSX stock a home in your portfolio.
TFI: This TSX could rocket when the freight market improves
TFI International (TSX: TFII) is another TSX stock to buy if you don’t mind getting into the weeds. You may have to be incredibly patient with this stock. However, it could pay off.
Unlike Constellation, TFI is actually facing some real business challenges. There has been a freight recession in North America for the past six to seven quarters. That has been a major overhang on results. The global tariff war certainly hasn’t help improve the situation.
However, in the last quarter, TFI demonstrated a marked turnaround in its lagging U.S. less-than-truckload division. Likewise, management was clear that it would aggressively buyback its stock while the stock is depressed. The company still generated $182 million of cash, despite a tough environment.
The point being that this TSX stock could roar back once the broader freight market starts to normalize. This is not a stock for everyone. However, if you don’t mind being particularly patient, the stock could provide considerable upside from here over the next two to three years.
