If you’re as anxious as ever about your portfolio with Trump’s tariffs strike and a potential trade war brews, it’s probably time to trim a bit of risk. That said, if you’re a younger investor who can better ride out the volatility, thanks to a long-term time horizon (think 10 years or more), I think that getting a bit greedier may prove wise, rather than feeling fearful, as so many investors are at this juncture.
There’s no question that tariffs are a threat that should be taken seriously. And while things could get really bad (25% tariffs may be just the start if a worst-case scenario type of trade war ends up playing out for most of this year), I think it’s vital to think about the next 10-15 years, rather than looking to make the best move for the next quarter or two. Indeed, if you invest with the next decade in mind, it’s a bit easier to buy in challenging times.
Sure, bottom-fishing can be a dangerous game, especially for near-term traders who may be investing on a margin. And while I wouldn’t try to search for a bottom after the U.S. market tanked by 9%, I would gather a list of potential Canadian stocks that may be able to stand tall after the dust settles.
In this piece, we’ll check out a few oversold TSX stocks that I believe may be stealthy winners at this point in the trade war. Of course, they’ll take a hit over the short to medium term, but over the long term, I like their prospects, especially compared to other firms that may struggle to adapt to a tariff-filled climate.
Loblaw
Loblaw (TSX:L) stock has held its own quite well amid the tariff turbulence thus far, with shares down just over 3% from all-time highs. Indeed, as Canadian consumers look to “buy Canadian” to show their support for the nation, Loblaw will be busy changing the mix of goods to make it easier for consumers to do just that. Additionally, with an incredibly low-cost private label (think No Name brand), Loblaw benefits as more customers aim to save money while buying Canadian, as they shift business from other grocers, some of which may be American.
As the company rolls out its “tariff” symbols on various products to help Canadians better sidestep tariff-related price increases, I think that there are few domestic grocers in a better spot to rise up in the face of such profound trade uncertainties. With 26.8 times trailing price to earnings (P/E), you’ll pay a premium for the name. Given Loblaw could stay resilient through inflation, economic downturns, and trade wars, though, that price seems well worth paying.
Canadian Tire
Canadian Tire (TSX:CTC.A) stock has been hurting amid tariff news, with shares down over 13% from its 52-week highs. Though it’s vulnerable, I think the company will be fine over the long haul as it aims to use proceeds from its recent Helly Hansen sale to restructure for growth. Indeed, whether that means including more Canadian brands in its stores or doubling down on tech (artificial intelligence could jolt the retail scene), the company is better equipped to power through this rough patch than you’d think.
Additionally, for those seeking to “buy Canadian,” perhaps there are few better places to do so than Canadian Tire. It’s about as Canadian as discretionary retailers get! In that regard, I see the company as potentially taking share if consumer preferences continue to favour domestic goods. Even once tariffs are off, my guess is that many Canadian consumers will stick with Canadian retailers like Canadian Tire. Finally, at 9.2 times trailing P/E, CTC.A stock looks like a steal of a bargain.