The Canadian stock market has continued to trend higher in 2025. Notably, the S&P/TSX Composite Index is up about 20% year to date despite ongoing tariff-related uncertainties. Interest rate cuts and the resilience shown by the broader economy have led many Canadian stocks to deliver exceptional year-to-date returns. However, shares of several fundamentally sound companies are still trading at appealing valuations, making them too cheap to miss.
So, if you have $500, now could be an opportune time to invest in these undervalued yet fundamentally strong Canadian companies. These stocks have the potential to deliver meaningful capital gains.
In this context, here are two Canadian stocks that are too cheap to miss.
Source: Getty Images
TSX stock #1: goeasy
goeasy (TSX:GSY) is one of the top TSX stocks that is too cheap to be missed. The lending and leasing services provider has seen its shares drop nearly 30% over the past three months. This drop in goeasy stock is largely due to a short-seller report from Jehoshaphat Research that accused the company of manipulating its accounting to boost earnings and hide credit losses.
The stock took another hit after the subprime lender’s latest quarterly results showed pressure on earnings. Notably, goeasy’s shift toward secured loans, tighter underwriting standards, higher provisions for credit losses, and rising finance costs adversely impacted its bottom line. While these factors have weighed on short-term performance, they also signal a more conservative and risk-aware approach to lending.
Importantly, goeasy has rejected the short-seller’s claims and reaffirmed its financial outlook. Moreover, the move toward secured lending, while lowering yields, enhances stability and reduces long-term credit risk. As the company maintains operational discipline, its margins and earnings are well-positioned to recover over time.
Demand for goeasy’s credit solutions remains robust, with loan growth across unsecured lending, home equity, auto financing, and point-of-sale segments. Its diversified funding base, solid underwriting capabilities, and steady expansion into new markets and products provide a strong platform for sustainable growth.
Following the recent selloff, goeasy now trades at 6.6 times its expected earnings over the next 12 months, well below its historical average. With solid fundamentals, double-digit earnings growth potential, and a 4.5% dividend yield, the current weakness in GSY presents investors with a rare opportunity to purchase shares of this high-growth company at a discount.
TSX stock #2: MDA Space
MDA Space (TSX:MDA) stock has lost significant value, declining approximately 50% over the last three months. Shares of this space technology company came under significant pressure due to concerns related to its major contracts. However, this decline presents a solid buying opportunity as its fundamentals remain solid with the company operating in a fast-growing space economy.
The downturn began when EchoStar scrapped a multi-billion-dollar satellite deal and sold its spectrum licenses to SpaceX. Sentiment worsened after reports suggested MDA’s major client, Globalstar, might be in early talks to sell to SpaceX. That raised concerns that SpaceX could bring Globalstar’s future satellite production in-house, potentially undermining MDA’s $1.1 billion contract to build digital satellites.
Still, MDA’s fundamentals are solid. The company is a leader in digital satellite systems, robotics, and geointelligence. These areas are set to benefit from surging global demand in communications, defence, and Earth observation. Moreover, MDA’s solid balance sheet offers the flexibility to capitalize on growth opportunities.
As the space industry continues to attract significant investment from governments and private players alike, MDA appears well-positioned to capitalize on new opportunities. Overall, the steep drop in its share price despite its solid fundamentals and strong demand environment makes MDA Space stock a compelling investment.
