1 Canadian Stock I’d Buy Before Investors Wake Up to This Trend

The next big trend might already be hiding in plain sight. Gold stocks had a strong run, but investors still tend to treat many miners like short-term trades instead of long-term businesses. That can create opportunity when a company has growing production, strong cash flow, a clean balance sheet, and a project that changes its future. The key is finding a miner that doesn’t need gold prices to do all the heavy lifting. A rising gold price helps, of course. But the best setup comes when operational improvements, mine life, and valuation all line up before the wider market fully catches on.

TXG

Torex Gold Resources (TSX:TXG) is a Canadian gold producer with its core operations in Mexico. Its main asset is the Morelos Complex, which includes the ELG mine and the newer Media Luna mine. That second mine is the big reason investors should pay attention now. Media Luna reached commercial production in 2025, turning Torex from a strong single-asset gold producer into a more diversified gold-equivalent producer with copper and silver exposure, too.

The last year brought a clear shift in Torex stock’s story. Media Luna ramped up ahead of schedule, and the processing plant performed better than expected. Torex stock also added fresh exploration momentum, including new resources at Media Luna West and Los Reyes. Those updates help because mining stocks don’t just trade on what they produce today. They trade on how long they can keep producing tomorrow. The risk is location. Torex stock operates in Mexico, and investors need to account for political, labour, safety, and operating risks. Mining never offers a free lunch.

Into earnings

The earnings numbers, though, look impressive. In 2025, Torex reported revenue of US$1.31 billion, up about 17% from the prior year. Net income came in at US$403.4 million, or US$4.53 per diluted share. Adjusted net earnings reached US$350.1 million, or US$3.93 per diluted share. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) hit a record US$730.3 million. Those aren’t tiny improvements. They show a company that used strong gold prices and better operations to turn production into real profit.

Valuation still looks reasonable, especially for a company with this kind of momentum. Torex stock recently carried a market cap around $5.7 billion and traded near 10 times trailing earnings. That’s low for a company with rising production, strong margins, and a key mine now moving through ramp-up. The catch is that gold stocks can look cheap right before costs rise or metals prices fall. Investors should never ignore that risk.

Looking ahead

The future outlook comes down to whether Torex stock can keep building on Media Luna. The company guided for 2026 production of 420,000 to 470,000 gold-equivalent ounces. That’s a strong base, especially as Media Luna contributes for a full year. Torex stock also plans to keep investing in Media Luna North, along with other optimization projects across the Morelos Complex. In simple terms, the company isn’t standing still. It’s trying to extend mine life, lift output, and squeeze more value out of its existing district.

That’s why Torex stock fits the “before investors wake up” idea. Gold remains front and centre, but this isn’t just a gold-price story. It’s a production ramp-up story, a cash-flow story, and a valuation story. If gold prices stay firm, Torex stock could benefit quickly. If copper exposure gains more attention, Media Luna could look even more attractive. Still, investors should expect volatility. Costs, mine execution, and commodity prices can all swing results. But for long-term investors who can handle mining risk, Torex stock looks like one Canadian stock worth watching before the crowd gets too comfortable with the trend.

Bottom line

Torex stock isn’t some sleepy blue-chip stock, and it doesn’t pretend to be. But sometimes the best long-term opportunities appear right when a company moves from promise to proof. Media Luna has changed the story, earnings have backed it up, and the valuation still doesn’t look stretched. If investors keep waking up to gold, copper, and cash-generating miners, Torex stock could have a lot more room to run.

The post 1 Canadian Stock I’d Buy Before Investors Wake Up to This Trend appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.