Deep Value Investors: Your Time Has Come

After such an impressive year for the TSX Index, it might be time to start getting a bit pickier about the next TSX stocks you opt to pick up. Undoubtedly, whenever stocks, or the market as a whole, are experiencing considerable momentum going into a new year, it’s easy to think that the great times can last forever. Undoubtedly, it’s times like these, when it seems like nothing can go wrong, when it can pay dividends to take a slight tilt towards value, even if it means stepping away from the biggest growth darlings that have helped your portfolio gain a leg up.

Of course, going for deeper value might be trickier, especially if you’re a new investor who isn’t used to stepping outside of their comfort zone with some of the lesser-known or unloved names that offer a potential shot at getting a wide margin of safety. While deep-value investing is getting harder these days, I think that it’s worth paying closer attention to the names that might offer way more for your investment dollar than some of the obvious darlings of the market, some of which might be fully valued, or even a tad on the overpriced side.

Even the best, stable blue chips can be a losing investment if you pay too high a price. So, with that in mind, here are two Canadian stocks that I think are rich with value and might be worth picking up now that the expectations bar has essentially been lowered near the floor. While the new year might not have a ton of catalysts, I think that patient, long-term investors can do incredibly well with the names.

Spin Master

First up, we have shares of toymaker Spin Master (TSX:TOY), which are stuck in a generational trough, now down around 66% from all-time highs to multi-year depths below $20 per share. Undoubtedly, tariffs have hit Spin Master shares where it hurts. But in the new year, I think there’s a lot to look forward to, especially as we gain a glimpse of how the consumer fared through the holidays. Of course, it’s impossible to know how that holiday quarter will fare until the big reveal. Either way, expectations, at least in my view, seem a tad too low.

Going into 2026, some pundits think that the toy industry could be in for relief. Until the tailwinds begin to kick in, though, Spin Master is doing everything it can to trim costs and drive margins while also keeping a fresh pipeline of products and content. Add the potential for tariff relief in the longer term, and TOY stock stands out as a deep-value play for those comfortable holding for the next five years. Spin Master has already sailed through the storm, and at just 7.9 times forward price to earnings (P/E), I think the odds are on investors‘ side.

If you’re bullish on the toy industry and think Spin Master’s powerful brand portfolio will pull through, I think now could be an incredible time to step in as a buyer of the fallen $1.9 billion star, which might not have to do much to start moving higher again in 2026.

The post Deep Value Investors: Your Time Has Come appeared first on The Motley Fool Canada.

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More reading

• 3 TSX Consumer Discretionary Stocks That Are Too Cheap to Ingore Right Now
• Shocking Declines: Canadian Stocks That Disappointed Investors in 2025
• Betting on a Holiday Retail Revival? 3 Stocks That Could Benefit

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Spin Master. The Motley Fool has a disclosure policy.