“Price is what you pay, value is what you get” – a famous quote by Warren Buffett defines the concept of buy the dip. The share prices of the most valued dividend stocks have lower growth, as the total returns to shareholders come mainly from dividend payments instead of capital appreciation (as they reinvest less in the business). Since there is an outflow of cash and that outflow continues to grow, the share price remains range-bound, making it easier to invest.
How to identify low-risk stocks
Some fundamentally strong growth stocks tend to dip due to macroeconomic uncertainty, supply chain bottlenecks, or industrial weakness. Not all stocks that dip are a buy. Sometimes the dip is prolonged as the competitive advantage has ended, or the fundamentals are too weak to sustain a challenging business environment.
Business is not just about tapping opportunities but also managing risks. Thus, before buying the dip, check whether the management has taken steps to manage the risk of a downturn. Then, assess where the true value of the business lies and if its secular growth is still intact.
Low-risk growth stocks to buy the dip
Descartes Systems (TSX:DSG) stock has dipped 25% this year due to global trade uncertainty triggered by US tariffs. Over the last five years, there have been two boom and bust cycles in global trade. The pandemic slowed global trade, especially for oil, but boosted demand for e-commerce. As a facilitator of logistics and supply chain management solutions, Descartes felt the heat of the lockdown and enjoyed the e-commerce rally.
Then came the second supply chain issue. Semiconductor shortages impacted the automotive industry, and the tech stock meltdown pulled down Descartes’ share price. The stock began its cyclical rally in late 2023 when the chip shortage eased, and the artificial intelligence (AI) bubble drove demand for hardware and natural gas-powered data centres.
In both cyclical upturns, the stock became overvalued. Thus, it first corrected to justify revenue and earnings growth and then dipped to reflect the slowdown. This time, the company is facing lower trade volumes because of tariffs, and management is addressing this headwind by cutting jobs and continuing acquisitions that are accretive. It has zero debt and $278.8 million in cash to help it sustain lower trade volumes and keep expanding through acquisitions.
Secular demand remains intact as Descartes is well-positioned to tap the global shift in supply chains, making it a stock to buy at the dip.
Topicus.com
Topicus.com‘s (TSXV:TOI) share price dipped by a third in the second half of 2025 amid a management change at Constellation Software. This change is significant and could alter the secular growth of the business model, dependent on management expertise.
Topicus.com acquires mission-critical software companies across verticals, including education, healthcare, social services, local and central government, retail, financial services, accountancy, legal services, real estate, automotive, maritime, and professional associations. Most of these verticals are resistant to economic uncertainty, and the licensed software is sticky.
Shareholders should adopt a wait-and-watch approach to see if the management change at Constellation brings any group-wide policy changes and alters Topicus.com’s fundamentals. So far, successful acquisitions have helped increase its free cash flow. The cash flows from maintenance contract renewal are skewed towards the first quarter. One could see a seasonal rally in Topicus.com’s share price then.
A good approach would be to buy the dip and wait. Its downside is limited, but there is significant upside.
