That said, not every high-quality TSX stock has participated in the rally. Several fundamentally strong TSX-listed companies continue to trade at attractive valuations, largely due to near-term concerns weighing on sentiment. Importantly, these companies remain backed by proven business models, solid financial foundations and the ability to generate long-term growth.
With that in mind, here are two of the best TSX stocks to consider buying now, before their potential recovery gains momentum.
Best TSX Stocks #1: Goeasy
easy (TSX:GSY) shares appear too undervalued to overlook at current levels. Over the past three months, the stock price has fallen approximately 23.8% and is now down 41.6% from its 52-week high of $216.50, mainly due to a short seller report.
The decline was also driven by higher loan loss provisions in the third quarter, rising financing costs and the company’s strategic move into secured lending. Together, these factors have put pressure on profitability and weakened investor confidence.
While these factors have impacted near-term results, consumer credit demand in the Canadian subprime lending market remains resilient. Additionally, goeasy’s scale and leadership position in the subprime lending market provide a strong foundation for continued loan growth. The company’s diversified funding base, omnichannel business model and disciplined underwriting history support efficient growth and risk management.
Additionally, management’s emphasis on operational efficiency and margin protection should help stabilize profits as the company scales and the credit mix evolves.
From a valuation perspective, goeasy trades at an estimated forward price-to-earnings ratio of roughly 6.6, which seems undemanding relative to its historical ability to deliver double-digit earnings growth. Furthermore, with a strong history of steadily increasing dividends and an attractive yield of approximately 4.6%, goeasy offers value, income and growth potential. These qualities suggest that investors should buy this stock now before its rapid recovery.
Best TSX Stock #2: Shopify
Another attractive TSX stock to buy now is Shopify (TSX: STORE). While Shopify’s stock has risen significantly over the past decade, it has come under pressure recently. SHOP shares are down more than 32% in the past three months due to valuation concerns and macro uncertainty.
However, the recent share price weakness appears to be temporary as the company has strong fundamentals. Shopify will benefit as retail continues to shift to multi-channel selling platforms. As businesses increasingly need seamless ways to sell online, in stores, and across multiple platforms, Shopify’s unified commerce ecosystem will address growing demand.
Shopify continues to attract merchants of all sizes, including major global brands. Furthermore, continuous product innovation continues to strengthen customer loyalty. In particular, the upcoming quarterly figures will reflect an increase in gross merchandise volume and mark an increase in sales due to the holiday shopping season.
In addition to the seasonal boost, Shopify will benefit from its focus on diversifying its revenue streams. Payments remain a key driver, while offline retail and business-to-business solutions are expanding rapidly. The continued rollout of artificial intelligence-based tools, a focus on improving efficiency and delivering sustainable profits position the company to generate attractive long-term returns for investors.
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