With the TSX Index As they soar to new all-time highs, it’s hard to find Canadian stocks that look attractive right now. Mining and banking stocks have largely pushed the index higher.
However, a mix of quality stocks have significantly underperformed the index. It will take some determination to be a buyer, especially when these stocks are floundering and unpopular.
But if you can be patient, these Canadian stocks will have their best day again. If you don’t mind being a contrarian, here are three Canadian stocks I’d buy right now for $300.
A trucking stock poised for a momentum shift
TFI International (TSX:TFII) has had a difficult year. This Canadian stock is down 30% this year. The company had several consecutive difficult quarters. A slowing economy has caused a freight recession in North America. President Trump’s tariffs certainly haven’t helped.
TFI also happened to encounter some operational issues in its U.S. less-than-truckload business. It created a perfect storm that caused stocks to fall rapidly.
Yet there are reasons to be optimistic. TFI is a flexible, low-cost operator. Even in tough times, the transportation and logistics company generated $180 million in free cash flow in the second quarter alone. Operational improvements in the US and modest improvements in the freight market were also reported.
Recent peer results indicate that the freight market is starting to improve. TFI may be near a trough. That’s when you want to buy a high quality compounder that is temporarily broken. TFI certainly thinks this is a good time to buy; it has been aggressively buying back shares since shares fell in February.
A European software company listed as a Canadian stock
Another no-brainer Canadian stock to buy now is Topicus.com (TSXV:TOI). It was born from Constellation softwareone of the best performing Canadian stocks of the past 15 years (despite being down 17% this year).
Topicus.com acquires specialized software companies. Europe is its most important market. Given the diversity of countries, governments, industries, languages ​​and regulations, a wide range of software solutions are used and required. This provides a large market for Topicus to consolidate.
Topicus has already made great strides this year. It made a major software purchase and took a bet in its second Polish public entity. Since then, shares of Constellation have recently retreated, as have shares of Topicus.com. The dip offers an interesting opportunity to add this quality Canadian growth stock to your portfolio now.
A Canadian healthcare technology stock
VitalHub (TSX:VHI) is another Canadian software stock. Like Topicus, Vitalhub is highly acquisitive with 22 acquisitions to date. It focuses on healthcare software in Canada, the UK, the Middle East and Australia.
The company has posted some very strong numbers. Over the past three years, revenues have grown at a compound annual growth rate (CAGR) of 36%, earnings before interest, taxes, depreciation, and amortization (EBITDA) have grown at a CAGR of 34%, and earnings per share have grown at a CAGR of 145%.
The only negative is that VitalHub has aggressively raised equity capital to fund its growth program. That generated almost $100 million in cash. The shares trade at a premium multiple. It can therefore deploy the funds raised for acquisitions at significantly lower multiples, providing an arbitrage opportunity.
VitalHub shares are down 6% this year and 17% in the past three months, despite strong operating performance. It is not the cheapest share. However, if it can continue to deliver strong growth, it could be a good addition today.
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