A record-setting market can still hide a clearance aisle. While the TSX has recently reached new highs, two excellent Canadian businesses remain approximately 19% and 15% below their own peaks. The operations, meanwhile, appear to have missed the memo about being miserable.
Source: Getty Images
What investors want
That gap between price and performance is what dip buyers want. A lower share price alone proves nothing. The opportunity appears when investors react to a temporary slowdown, difficult comparison, or short-term uncertainty even as the company keeps strengthening the business underneath.
Investors still shouldn’t attempt to catch a falling stock with one heroic purchase. In fact, dollar-cost averaging is a great strategy of investing equal amounts at regular intervals regardless of market swings. Buying gradually can reduce the damage if an apparent bargain decides to become even more bargain-shaped.
I’d also check whether revenue, cash flow, and the long-term catalyst remain intact before buying during a stock market correction. Two TSX companies currently pass that test through very different businesses.
Freight results are changing direction
TFI International (TSX:TFII) operates truckload, less-than-truckload, and logistics businesses across Canada, the United States, and Mexico. Freight is cyclical, so weak shipping demand can hurt pricing and leave expensive equipment doing a convincing impression of lawn furniture.
The cycle now appears to be improving. Second-quarter adjusted earnings per share (EPS) increased 38%, while free cash flow reached US$202.1 million. Every operating segment produced higher revenue and operating income. TFII stock also has a newer growth route transporting high-value equipment for data centres and electrical-grid projects, markets receiving enormous investment.
TFII stock recently traded below its $233.85 high by about 19%. The shares still trade near 33 times trailing earnings, so this isn’t discount-store pricing. A renewed freight slump, poor acquisition integration, accident costs, or weaker industrial spending could interrupt the rebound.
The infrastructure behind the AI rush
Brookfield Infrastructure (TSX:BIP.UN) offers a steadier second engine. Its global portfolio includes utilities, pipelines, railways, ports, toll roads, fibre networks, and data centres. Many assets earn contracted or regulated revenue, which can provide more predictable cash flow than the freight cycle.
Second-quarter funds from operations (FFO) per unit increased 10% to US$0.89. Data operations led the growth as Brookfield commissioned new projects and expanded its artificial-intelligence (AI) infrastructure pipeline. Management also plans to combine its partnership and corporate securities into one corporation, potentially improving liquidity and index demand if investors approve the transaction.
BIPC recently traded about 15% below its 52-week high, while paying a dividend yield near 4.2%. Higher borrowing costs, heavy debt, construction delays, or overpaying for the AI buildout remain real risks. Brookfield’s capital-recycling model helps, although it doesn’t come with a magic wand and a hard hat.
An installment recovery
I’d split an initial investment between these Canadian blue-chip stocks, then add through several purchases. TFII stock supplies greater rebound potential, while Brookfield Infrastructure adds contracted cash flow and a meaningful dividend. Neither should become an entire portfolio.
The dips could deepen before they disappear. If freight demand keeps recovering and AI investment keeps pulling capital toward power, data centres, and networks, however, today’s lower entry prices could give patient buyers much more room to win.
