You don’t really have to look all too far for TSX success stories. Undoubtedly, many Canadian investors are diversifying south of the border into U.S. stocks, often neglecting the big names and winners on this side of the border. While there’s absolutely nothing wrong with being overweight in U.S. stocks, especially given their recent hot surge, I think there’s literal value to be had in betting on Canadian stocks, especially this year.
Indeed, the TSX Index tends to be a tad value-heavy, at least compared to the S&P 500, Dow Jones Industrial Average, or the tech-focused Nasdaq 100, which has amplified gains in the S&P 500 in recent years. And while the TSX Index hasn’t quite been able to beat the U.S. indices of late, you simply cannot ignore the recent gains, which are very impressive in their own right.
As it stands, the TSX Index is up just north of 18% in the past two years. That’s impressive. And the good news is there’s still value to be had out there as the Canadian market looks to sustain another year of gains.
Though I wouldn’t go as far as to predict the TSX Index will beat the S&P 500 in 2025, there are some folks, like Brian Belski of Bank of Montreal (TSX:BMO), who’s a notable bull on Canada’s stock market. In fact, he sees the TSX Index beating the S&P 500 in 2025. It’s a bold call, but one that I think has a realistic chance of coming to be, especially as the U.S. stocks take a rest while Canadian ones continue moving higher, making up for relative lost time.
So, which Canadian stocks could lead the pack in 2025? Look no further than last year’s winners, which, I believe, could continue their win streaks for years to come. Celestica (TSX:CLS) and Lundin Gold (TSX:LUG) were among the most envied performers last year, with 266% and 96% worth of gains in the past year, respectively.
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Celestica
I don’t like chasing stocks after red-hot runs, but I’m willing to nibble into Celestica shares with the intent of buying on weakness. Indeed, the impressive electronics manufacturing service (EMS) software service company has been beating on quarterly earnings of late.
As the firm looks to expand upon its margins while continuing to make the right partnerships (it teamed up with artificial intelligence, or AI, startup Groq), there are many pathways higher for the $16.4 billion firm to take. At just 30.9 times trailing price to earnings (P/E), perhaps putting the name on a pullback watchlist makes the most sense.
Lundin Gold
Lundin Gold is another top performer that may be able to pull off another big year of gains. At writing, the stock trades at just 16.6 times trailing P/E, making it still quite affordable for those seeking a mix of value and momentum.
Indeed, gold prices could really shine in 2025 if Trump tariffs cause a surge of market volatility. With efficient operations and the means to shine even brighter on the back of continued strength in the price of gold, I’d not dare bet against the name right here. With a beta of 1.23, you had better be prepared for a choppier ride than the rest of the market, though.
