Being a contrarian investor is rarely straightforward, particularly when the paper losses start to essentially mount in a rush. And whereas shopping for the dip will not be going to work out all the time, I do assume that everytime you see shares of a beautiful agency that you just’ve been that means to purchase however simply by no means obtained round to it (both resulting from valuation issues or just having one thing higher at any given time), it is best to look to be a purchaser.
After all, shopping for dips can entail extra ache to come back as a result of, as chances are you’ll know by now, the market doesn’t know if you’ve lastly hit the purchase button. Certainly, the tide won’t flip when it’s most handy for you. In any case, the TSX Index is working pretty scorching into the month of October.
Whereas there’s probability the momentum holds by means of the fourth quarter, I’d be extra inclined to purchase the pretty underpriced, underloved names simply in case the momentum performs main this rally start to falter a bit over the approaching weeks and months.
With out additional ado, right here’s a pair of progress names I’d be prepared to purchase on the way in which down.
Constellation Software program
First up, now we have shares of Constellation Software program (TSX:CSU), which had been crushed down final week after information broke that its founder, Mark Leonard, can be resigning resulting from well being issues. Certainly, each time a legendary founder steps again or away, buyers are certain to promote first and ask questions later. Undoubtedly, the response was fairly overdone, particularly on an intraday foundation.
And whereas the latest unhealthy information provides to the negativity surrounding the inventory because it peaked out again in Could, I nonetheless assume the dip is greater than buyable. The inventory is likely to be a bit dear, even after tumbling into a bear market. Nonetheless, I don’t assume all an excessive amount of will change as Constellation’s different leaders step up in Mr. Leonard’s absence. Although Constellation inventory is down 12% on the 12 months, I’d not surrender on the long-term progress story. It’s an incredible purchase as most others panic concerning the implications of Leonard’s resignation.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) is one other fallen progress inventory that’s a strong worth going into This fall. Like Constellation, ATD shares are down on the 12 months, now off 6% 12 months to this point. Regardless of the choppiness and unanswered questions following the dearth of a 7 & i Holdings deal, I nonetheless assume the identify is value patiently holding going into 2026.
The corporate has some menu innovation in retailer with its Man Fieri partnership, which I devoted an entire piece to. Moreover, there are sure to be extra acquisition bulletins within the coming months. Till then, it could make sense to be a purchaser of the newest modest bounce to $74 and alter. In brief, ATD has the drivers in place to get its groove again. And in due time, I feel will probably be again to sustaining good points and earnings progress.
The underside line
Constellation and Couche are two underneath stress growth-by-acquisition companies that look low-cost in an arguably lofty market. Although near-term ache could possibly be within the playing cards for This fall, I just like the long-term roadmap for each companies. I feel it’s time to purchase each names whereas they’re marked down.
