Turnaround investing isn’t about chasing what’s already working — it’s about spotting quality businesses when sentiment is still fragile, and expectations are low.
The best opportunities often emerge after a stock has already fallen sharply, stabilized, and quietly begun fixing what went wrong. By the time the broader market regains confidence, much of the upside is already gone.
Two Canadian stocks fit that description today. Both have endured difficult periods, taken decisive strategic actions, and now appear positioned for multi-year recoveries that long-term investors may want to get ahead of.
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Premium Brands: A strategic reset with U.S. growth fuel
Premium Brands Holdings (TSX: PBH) looks increasingly like a classic operational turnaround paired with a growth catalyst. Even after rebounding roughly 40% from its 2025 lows, the stock has about 36% upside to reach its 2021 peak, suggesting there’s more room for recovery.
From 2021 through 2024, Premium Brands focused on expanding manufacturing capacity and improving efficiency across its Specialty Foods operations.
Those investments are already showing results. Gross margins improved from approximately 18.3% to 20%, while operating margins rose from about 4.8% to 5.9%. Importantly, this progress came before the next leg of its growth strategy was put into motion.
In December 2025, the company announced a US$688 million acquisition of Stampede Culinary Partners, which officially closed in January.
Management views the transaction as highly complementary, particularly for accelerating growth in the U.S. foodservice market. CEO George Paleologou emphasized that the acquisition strengthens Premium Brands’s presence beyond retail and club channels, adds sous vide cooking capacity to complement its flame-grilled operations, and provides access to significant unused production capacity.
Taken together, these factors could drive meaningfully higher revenue, profits, and cash flow through 2027 as U.S. expansion accelerates. From these catalysts, the stock could reasonably climb 50–100% from current levels around $100 per share. Investors are also paid to wait with a dividend yield near 3.4%.
goeasy: Valuation compression creates opportunity
goeasy (TSX: GSY) represents a very different type of turnaround — one driven primarily by valuation rather than operational distress. The non-prime lender has always been volatile, and its long-term chart reflects dramatic swings in both directions.
At roughly $131 per share, the downside appears largely priced in. The stock trades at a blended price-to-earnings (P/E) ratio of about 7.6, representing a discount of more than one-third relative to its long-term average valuation.
That discount exists for real reasons. goeasy faces elevated credit risk due to its non-prime customer base. A weaker economy, rising unemployment, or household debt stress could push delinquencies higher.
It also has regulatory risk. Canada’s federal government lowered the maximum allowable interest rate from about 47% to 35% in January 2025, and any future reductions could further compress margins. That said, goeasy’s weighted average consumer loan rate in 2025 was estimated at 31-32.5%, leaving some buffer under current rules.
For patient investors, however, normalization alone could unlock substantial returns. A return toward historical valuation levels with earnings growth would support total annual returns of 15–20% over the next five years, including a dividend yield of roughly 4.4%.
Investor takeaway
Turnaround investing rewards patience and discipline. Premium Brands offers operational momentum and U.S. expansion potential, while goeasy provides a deeply discounted valuation with income along the way. Neither is risk-free, but both appear positioned for recovery before market sentiment fully turns — exactly where true turnaround opportunities are found.
