The Canadian stock market had a terrific year for most of 2025, particularly from early April to the end of the year. The S&P/TSX Composite Index climbed by almost 41% between April 8 and December 31, 2025. The Canadian benchmark index started 2026 with the same momentum, but has since started to slump.
As of this writing, the Canadian benchmark index is up by 26.6% in the last 12 months, but down by 2.1% since its January 28, 2026, level. The downturn in this index reflects the overall state of the market, and several high-quality TSX stocks trade at heavily discounted levels.
While the pullback in share prices might be justified for many, some TSX stocks might become better picks due to the downturn. Today, I will discuss two high-quality TSX stocks that trade at substantial discounts from all-time highs, and arguably, are perfectly positioned for value-seeking investors.
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Shopify
Shopify Inc. (TSX:SHOP) is a solid long-term buy-and-hold investment in my books, but the Ottawa-headquartered $199.2 billion market-cap tech stock has not been in the best shape in recent weeks. As of this writing, Shopify stock trades at an almost 40% discount from its 52-week high. The downturn is going on throughout the economy, but tech stocks seem to be feeling it the most.
That said, the underlying business is not doing as poorly as its stock market performance might suggest. The company reported a 27% year-over-year uptick in sales, its enterprise business continues to scale, and there is still room for aspects like Shopify Payments to grow.
The Canadian tech stock might be declining on the stock market right now, but the sell-off seems overdone. A recovery might be on the cards. Investors can capture the upside by investing at current levels.
goeasy
goeasy Ltd. (TSX:GSY) has also had a tough year on the stock market, particularly since the halfway mark in 2025. As of this writing, goeasy stock trades at a 39.3% discount from its 52-week high. However, goeasy might seem attractive to income-focused investors at current levels. After the inflation due to declining share prices, its dividend yield translates to an annualized 4.5%.
An attractive dividend yield cannot make a stock a good investment on its own. GSY also has a solid business model. The company lends to subprime lenders, generating significant revenues from interest income. The demand for consumer loans in the subprime market continues to stay strong.
The company’s management expects gross consumer loan receivables to deliver up to $7.8 billion by 2027, alongside improved operating margins. The company itself seems to be doing well and might be quick to recover once the dust settles.
Foolish takeaway
The short-term concerns that weigh on investor sentiment can be a good thing for savvier investors who can see through the noise to the bigger picture. Sure, the volatility can wipe away plenty of gains that investors might have captured in the short term. However, those with a long investment horizon can identify companies that can recover and deliver superior long-term returns.
Shopify stock and goeasy stock have solid financial foundations, strong fundamentals, and proven business models that indicate substantial growth potential in the coming decades. They can be good investments to consider.
