2025 is almost under wraps. It’s time to start thinking about how you want to invest in stocks for 2026. I would label 2025 as a bifurcated market. The S&P/TSX Composite Index is up 23% this year. At 30,316 points, the Index is trading just off all-time highs.
Yet, unless you are overweight in banking, mining, or AI-related stocks, your portfolio may have underperformed the Index by a good margin. Parts of the market that have outperformed in the past (like software, insurance, and industrials) are down double digits.
It presents opportunities if you don’t mind being contrarian. Here are three stocks that are beaten down now, but I‘d buy them for 2026 and long beyond.
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A top Canadian compounder trading down in 2025
Constellation Software (TSX: CSU) is down 26% so far in 2025. This is one of its worst drawdowns ever. Even after the pullback, it is still one of the best-performing stocks in Canada over the past 15 years.
The stock is down on fears about AI threats, the retirement of its long-standing CEO, and the potential for capital deployment to slow down. Constellation makes its bread and butter from acquiring small, niche, specialized software providers.
While Constellation’s year-to-date earnings results have been good, the market has not been satisfied. Yet, with the stock down, its valuation is starting to look quite attractive. The lower price provides a margin of error for longer-term investors.
While AI is a threat, it is also an opportunity. Constellation can use it as a tool to enhance margins and improve software services for customers. You must be contrarian, but if this stock were to pull back any further, it would be a great bargain.
A real estate stock for long-term returns
Speaking of compounders, Colliers International (TSX: CIGI) is interesting. Its stock is actually up 10% this year. However, it is down 5% since it released earnings last week.
Colliers is best known for its global commercial real estate brand. Yet, it is becoming a substantial player in investment management and engineering. As it integrates and consolidates those businesses, it is having some near-term margin impacts. This could last for a couple of quarters. The market didn’t really like that.
If you can look past that, the company has delivered great results this year. For the first nine months, revenues rose 19% to $3.95 billion, and adjusted earnings per share rose 23% to $4.24.
2026 is setting up to be a strong year where its recent acquisitions should accrete strong earnings growth. The company still has ample room to acquire more businesses. The company has returned high-teens average annual returns for more than 20 years. It is likely to keep delivering the same in the years ahead.
A software stock with big opportunities in 2026
Another stock I’d be interested to buy if it got any cheaper is VitalHub (TSX: VHI). Its stock is down 6.5% this year. The weak performance is a bit deceiving. For the first nine months of the year, revenues are up 62% to $77.5 million and adjusted EBITDA is up 49% to $19.1 million.
VitalHub is gaining strong momentum as a crucial healthcare software provider in Canada, the U.K., and Australia. Recent larger acquisitions are giving it geographic scale and new tools to help its customers across.
This stock has a strong, cash-rich balance sheet with nearly $120 million. It is in a strong position to aggressively deploy that cash for growth in 2026 and beyond.
