With tariffs already starting to impact global supply chains and the threat of a broader trade war looming, both uncertainty and volatility are higher than ever. As a result, many high-quality stocks have fallen by more than 25%, creating an excellent opportunity to buy now.
It’s not just the potential slowdown in international trade that’s causing concern. Investors are also worried about how tariffs could affect the economy, whether inflation might spike again, and what central banks will do with interest rates in the near term.
These environments often lead to anxiety and frustration, but for long-term investors, they can also present some of the best buying opportunities. Periods of heightened volatility are typically when you can scoop up top stocks at significant discounts.
Of course, not every stock trading cheaply is worth buying. But when high-quality companies with strong fundamentals and compelling long-term growth potential fall more than 25%, it’s certainly worth taking a closer look.
Although today’s uncertainty feels extreme, these headwinds will likely be temporary. So, it’s crucial to take advantage while the opportunity exists.
So, with that in mind, if you’ve got cash on the sidelines and are looking to put it to work, here are three of the best Canadian stocks down more than 25% to buy right now.
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A top retail stock to buy on the dip
If you’ve got cash on the sidelines and are looking to take advantage of the buying opportunity in markets today, one of the best stocks to buy now is Aritzia (TSX:ATZ).
There are a few different headwinds impacting Aritzia stock in the near term. However, the fact that it’s currently trading more than 43% off its 52-week high makes it a stock you can’t ignore, especially when you consider its long-term growth potential.
Part of why Aritzia stock has been hammered is due to the U.S. tariffs on Chinese goods. In addition, investors are concerned that an economic slowdown could reduce discretionary spending, which may limit Aritzia’s growth potential in the near term.
However, Aritzia has reduced its exposure to China in recent years and has already proven it can continue growing through periods of economic weakness, as it’s done in the past, thanks to how well its products resonate with consumers.
In fact, analysts still estimate that its sales will grow by more than 18% this year. Therefore, with Aritzia trading at a forward price-to-earnings ratio of just 17.2 times, below its three-year average of 22.8 times, it’s undoubtedly one of the best stocks to buy during the market volatility.
One of the cheapest stocks on the TSX to buy now
In addition to Aritzia, another ultra-cheap stock that’s currently down a whopping 47% from its 52-week high is Cargojet (TSX:CJT).
Cargojet is being impacted in multiple ways, just like Aritzia. Not only does it benefit from strong e-commerce demand, which could slow down if we head into a recession, but as a transportation stock, it’s also exposed to any potential pullback in international trade.
However, Cargojet has proven it can adapt quickly, and with its dominant market share and long-term contracts in place, it’s well-positioned to weather short-term headwinds and bounce back as conditions improve.
Furthermore, analysts still expect Cargojet to increase its sales by roughly 9% this year and its earnings before interest, taxes, depreciation, and amortization (EBITDA) by nearly 8%.
Therefore, while it trades this cheaply, it’s easily one of the best stocks to buy now.
A top Canadian REIT with a yield of 5.5%
Lastly, another high-quality stock to buy while it’s undervalued is Granite REIT (TSX:GRT.UN), which is down roughly 26% from its 52-week high.
As an industrial real estate investment trust, there’s concern that a slowing economy could lead to higher vacancies. Furthermore, Granite has exposure to tenants in the auto industry, which could face additional headwinds from the U.S. tariffs.
However, Granite has significantly reduced its exposure to auto parts manufacturers in recent years. Plus, it offers a compelling and sustainable dividend yield to pay you while you wait. In fact, in 2024, its payout ratio of funds from operations was just 62%.
Therefore, while one of the best long-term real estate stocks trades off its highs, it’s certainly one of the top investments to buy now.
