There are still so many cheap stocks out there for self-guided investors who are willing to steer a bit away from the consensus trade (or the red-hot momentum play that’s worked out well so far this year) as they look to take on more of a contrarian stance, with a lesser-covered and perhaps lesser-loved name that’s trading for far less than its intrinsic value.
Of course, estimating the true intrinsic value of a stock is hard to do. Just because a stock is down or sporting a low price of admission does not necessarily mean there’s deep value to be had. Additionally, don’t forget about the undervalued-looking names that are hiding in plain sight.
Even in a market like this one, where momentum and growth are stealing the show, there are some fairly sizeable blue-chip names that can fair well with less risk than some of the hotter names out there that are a bit more exposed to a correction in AI or a rotation away from the names that have done much of the work in powering the TSX index to impressive gains this year.
In this piece, we’ll look at two names, one of which is a year-to-date laggard that many investors have already thrown in the towel on. Shares look deeply discounted and a great fit for long-term investors who are willing to wait for management to pull off a comeb ack.
Meanwhile, we’ll also look at an overperformer that has what it takes to keep outperforming the rest of the market. Despite the impressive rally in the name, shares still look cheap when you weigh what you’re actually getting (think strong execution and a plan to keep growth going strong, even in a difficult economic environment).
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TFI International
First, let’s start with the name that might not be on your radar: TFI International (TSX:TFII), a $9.8 billion mid-cap transportation firm that started the year with a massive plunge. Though shares have recovered ground from the year’s lows, there’s still a long way to the top, especially as tariffs continue to weigh.
Even if tariffs go nowhere or worsen, I think it’s time to be more optimistic about TFI International, given the low price of admission and how nothing but negativity, in my view, seems priced into the shares. Year to date, the stock is down over 37%. That’s excessive for a company that could come roaring back once trucking demand moves higher again. No doubt that it’s a harsh and rocky environment for TFI to truck through.
Still, I view the 14.7 times forward price-to-earnings (P/E) ratio as attractive, as do I the company’s margin-driving efforts as management looks to acquire and optimize despite the uncertain macro picture. TFI has solid managers who’ve been through challenges before. And I think they’ll be fine in the grander scheme of things, regardless of how tariffs and freight demand play out in the new year.
TD Bank
TD Bank (TSX:TD) is a big winner that will probably continue to impress in the new year. Despite being one of the momentum leaders of the big banks this year, I still see room for appreciation as the $194 billion titan regains its premium multiple under its new CEO (who’s off to an incredible start, by the way).
Today, shares trade at 9.7 times trailing P/E to go with a 3.7% yield. For a strong, growing yield and a recovering business, I see that multiple is obscenely cheap. So, if you want growth potential and dividends without breaking the bank (no pun intended), TD stock looks like a top financial buy for 2026 and beyond.
