What are we looking for?
Canadian stocks that have sold off year-to-date but that continue to grow rapidly and trade at attractive valuations.
The screen
Canadian and U.S. equity markets have rallied to record highs in 2026, driven by first-quarter earnings growth for the S&P 500 index tracking at more than 25 per cent year-over-year, the strongest pace since the fourth quarter of 2021. Despite this rally, several Canadian companies have fallen behind owing to weaker commodity prices and geopolitical concerns, creating potential entry points for investors with a growth at a reasonable price mindset.
Using FactSet’s screening tool, I identified TSX-listed companies that have sold off year-to-date but that continue to deliver strong growth, by applying the following criteria:
- traded on the S&P/TSX Composite Index
- market capitalization greater than $1-billion
- forecasted one-year sales growth greater than 15 per cent
- forecasted one-year earnings growth greater than 15 per cent
- year-to-date total return below negative 10 per cent
The eight remaining companies were ranked by a multifactor set of ratios: price-to-earnings, price-to-sales, price-to-free-cash-flow and price-to-book.
What we found
Birchcliff Energy Ltd. BIR-T, a Calgary-based natural gas producer, ranked first with a forecasted one-year sales growth rate of 18.6 per cent and a price-to-book ratio of 0.9 times. The stock has declined 15 per cent year-to-date amid persistent weakness in AECO natural gas prices, which fell from $3.50 on Dec. 10, 2025, to below $2 a gigajoule for much of the early winter of 2026. While global crude oil prices have surged on the conflict in Iran, natural gas trades on regional rather than global markets because it moves by pipeline rather than by ship. Western Canadian gas has been pressured by local oversupply, a mild winter and a slower than expected ramp-up of Canadian export capacity. Despite weak pricing, Birchcliff achieved record annual production of 80,086 barrels of oil equivalent a day in 2025. The 2026 growth outlook is supported by the ramp-up of Canadian export capacity and rising natural gas demand from data centres. Birchcliff is scheduled to report first-quarter 2026 results on May 13.
WSP Global Inc. WSP-T, a Montreal-based engineering and professional services firm, ranked second with a forecasted one-year sales growth rate of 21.5 per cent and a price-to-earnings ratio of 29 times. The stock has declined 13.1 per cent year-to-date as investors have grown cautious about elevated leverage after the company’s US$3.3-billion acquisition of TRC Cos., completed on Feb. 24. The combined entity is now the largest engineering and design firm in the United States by revenue and the country’s leading power and energy platform, positioning WSP for grid modernization and data-centre infrastructure spending. WSP reported first-quarter 2026 results on May 6, with adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) growing 16.5 per cent year-over-year to $622.2-million and adjusted earnings per share rising 26 per cent. WSP’s order backlog reached a record $19.7-billion, up 19 per cent over the prior 12-month period.
The information in this article is not investment advice. The author assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained above.
Arjun Deiva, CFA, is an MBA Candidate at the University of California, Berkeley, Haas School of Business.