Just Released: 5 Top Motley Fool Stocks to Buy in December

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The season for a lot of things is upon us, with many investors taking a look ahead to the coming year. But if experience has taught me anything, it’s that making short-term predictions is a waste of everyone’s time. After all, nobody knows the specifics of what the future holds.

But everyone should know that they will rhyme with the generalities of the past.

This means 2025 has set Canadian investors up very nicely for the road ahead. The reason being (while gold in Canada and the sphere of influence surrounding “AI” in the U.S. have carried the narrative) somewhat behind the scenes, a whole bunch of high-quality companies have become nicely cheaper than they were to start the year. Though relatively buried on Page 12, so to speak, multiple contraction has been another prevalent theme over the past 12 months.

History suggests buying a company for 20 times earnings is better than buying it for 40 times earnings, for instance.

And it’s our opinion that we’re going to thank 2025 for these opportunities at some point down the road.

For now, we have the opportunity to share some of our very favourite companies that are trading at very favourable prices.

Enjoy!

Foolishly yours,
Iain Butler
Advisor, Stock Advisor Canada

“Best Buys Now” Pick #1:

FirstService (TSX:FSV)

FirstService (TSX: FSV) is a prime example of the “multiple contraction” dynamic I explained above.

FirstService is in the upper echelon of our favourite companies when it comes to business quality, but we haven’t talked about it much because it’s always felt richly valued.

We really started watching FirstService back in 2017. Since then, the company has traded for more than 30 times forward earnings. Sometimes for much more. Today, the business can be had for about 25 times. This is more of a relatively cheap situation than an absolute one, but simply put, this business very rarely goes on sale.

Oh, and just what is this business?

FirstService is a North American leader in essential outsourced property services, operating through two main divisions:

1. FirstService Residential: North America’s largest manager of residential communities (condominiums, co-operatives, homeowner associations, etc.), managing over 9,000 communities representing more than 4.5 million residents across 25 U.S. states and three Canadian provinces.
2. FirstService Brands: One of North America’s largest providers of essential property services delivered through both company-owned operations and franchise systems, including brands such as First Onsite Restoration (commercial property restoration), Paul Davis Restoration, Roofing Corp of America, Century Fire Protection, California Closets, CertaPro Painters, Floor Coverings International, and Pillar to Post Home Inspectors.

The commonality between these two business lines is that they are both focused on recurring revenue streams from essential property services that are required regardless of economic conditions.

To be sure, you’re unlikely to win anyone over if you mention FirstService at a holiday gathering in the weeks ahead. But with a valuation window open, you’ll almost assuredly get the last laugh a decade from now as this business grows reliably and cranks out profitable year after profitable year.

“Best Buys Now” Pick #2

Redacted

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Fool contributor Iain Butler has no position in any of the stocks mentioned. The Motley Fool recommends Intact Financial. The Motley Fool has a disclosure policy.