This article was created with the assistance of AI, and is a transcript of the video below. I own Constellation Software.
Six of the most recognizable names on the TSX are trading 30 to 50 percent below their 52-week highs. Constellation Software, Thomson Reuters, Stantec, Cameco, CAE, and TELUS. Every one of them was considered a top-shelf Canadian business not long ago.
When a blue chip falls that far, there are only two explanations. Either the business is broken, or the stock is. They look identical on a price chart, and they could not be more different for your portfolio. Sorting the six into those two buckets is exactly what I did in this week’s video, tier ranking each one from S down to E.
Here is where each stock sat when I filmed, and where it landed on the board.
| Stock | Ticker | Off 52-Week High | Tier |
|---|---|---|---|
| Constellation Software | CSU | -35.6% | S |
| Thomson Reuters | TRI | -43.1% | A |
| Stantec | STN | -39.5% | B |
| Cameco | CCO | -29.5% | C |
| CAE | CAE | -30.9% | D |
| TELUS | T | -44.2% | E |
Full disclosure before we start: I own Constellation Software and WSP Global. I owned TELUS until earlier this year, and I will get to that.
Stantec (TSX: STN): B Tier
Stantec is 34,000 engineers and consultants, a record C$9.2 billion backlog, expanding margins, and a 14-year dividend growth streak. It is also on the delivery team for Meta’s $13 billion, 1.6 gigawatt data centre in Sturgeon County, Alberta, the largest in Canada.
So why is the stock down almost 40 percent? One fear: that AI shrinks billable engineering hours. It is a legitimate question to ask of every consulting business on earth. But there is no evidence of it in Stantec’s numbers yet. Backlog is at a record. Margins are going up, not down. Meanwhile the market has taken the forward P/E to roughly 15.6 times, and versus its own decade of history the stock now trades in the 6th percentile on earnings.
A record business at a bottom-decile price, discounted for a fear that has not shown up in a single reported quarter. That is how you get a B.
TELUS (TSX: T): E Tier
I bought TELUS around $19 in early 2025 and sold it near $18. I was wrong to buy it, and I say so in the video. It still earned the bottom of the board.
On July 31, 2026, TELUS cut its dividend by 55 percent, took a C$2.1 billion writedown on TELUS Digital, and cut guidance, all in the same afternoon. The yield that investors treated as free money for a decade was never free.
The math is brutal. TELUS carries about C$26 billion in net debt against a C$19.2 billion market cap. Roughly 57 percent of the enterprise is debt, at 3.5 times EBITDA, rated BBB-, the lowest investment-grade rung. Cheap infrastructure debt built the Canadian telecom sector. Expensive debt is now unbuilding it. And the diversification story never showed up where it counts: TELUS Digital peaked at about 14 percent of revenue but only around 2.5 percent of EBITDA.
To be fair to TELUS, this is a sector problem. Over the past ten years the share prices of all three Canadian telecoms are negative: BCE down 49 percent, TELUS down 43 percent, Rogers down 14 percent. The dividends were the entire return. The sector’s growth engine was population growth, and it is unplugged. New CEO Victor Dodig arrived from CIBC, and a cut dividend can always be cut again. At roughly 8 times trailing free cash flow the stock is cheap, but cheap is not the same as fixed.
Cameco (TSX: CCO): C Tier
Cameco might be the best business on this list that I still cannot call a bargain. Record free cash flow of C$1.08 billion. A net cash balance sheet, which is almost unheard of for a commodity producer. A 49 percent stake in Westinghouse alongside Brookfield, which is a call option on small modular reactors powering the AI buildout. And a structurally tightening uranium market, with Kazatomprom, the producer behind roughly 40 percent of world supply, cutting its 2026 production plan by about 10 percent.
The problem is the price. Cameco trades at 7.8 times book value against a 10-year median of 2.1 times. The dividend yields 0.19 percent. Nothing about the valuation is allowed to go wrong.
And uranium has gone wrong before. The 2007 mania ended with an 86 percent drawdown in Cameco shares that took over 16 years to reclaim. The commodity giveth, and the commodity taketh away. A premier uranium house at a premium price: strap your seatbelt on. That is a C.
CAE (TSX: CAE): D Tier
CAE grew revenue 96 percent since 2016. Earnings grew 14 percent. Share count grew 21 percent, so your slice shrank the whole way. Falling margins, interest on the debt, and dilution ate the decade. Growth that never reaches the bottom line is just activity.
The dividend, suspended in 2020, has never come back, six years and counting for a former Dividend Aristocrat. The bull case is the new CEO, Matthew Bromberg, who arrived from Northrop Grumman in August 2025 with an activist holding 4.3 percent behind him, civil aviation orders up 63.8 percent, and a book-to-sales ratio of 1.31, the healthiest in years. The bear case is that the turnaround promises are dated 2030 and the stock already trades at roughly 26 times fiscal 2027 earnings. You are paying today for a turnaround that has not happened yet. That is a D.
Constellation Software (TSX: CSU): S Tier
The biggest disconnect on the board, and the one I own. Constellation’s stock has gone essentially nowhere for three years: 0.0 percent. Over the same stretch revenue grew about 50 percent and free cash flow grew about 75 percent.
The business itself is what it has always been: 77 percent recurring revenue, a 23 percent return on equity, a share count that has not budged in 20 years, and a hurdle-rate discipline that has held through more than 1,100 acquisitions. Most acquirers quietly lower the bar when they need growth. Constellation walks. As founder Mark Leonard puts it, capital is magnetically attracted to mediocrity, and Constellation’s whole system is built to resist that pull.
The honest concerns: returns on invested capital have compressed as the company scales, and organic growth remains low single digits, which means the flywheel still depends on deal flow. But at roughly 21 times free cash flow, the multiple has been cut nearly in half while the cash machine kept compounding. Either the business breaks, or the price catches up. I am betting on the second. S tier.
Thomson Reuters (TSX: TRI): A Tier
Thomson Reuters owns the reference layer of American law: Westlaw, KeyCite, Practical Law. 82 percent recurring revenue, organic growth accelerating from 6 to 7 to 8 percent, and a 33-year dividend growth streak.
The stock fell 43 percent from its high, with a peak-to-trough drawdown of 63.6 percent, because the market decided AI would disintermediate legal research. Then the story inverted: the company whose stock crashed on Anthropic’s legal AI became Anthropic’s partner. CoCounsel was rebuilt on Claude, reasoning across 1.9 billion Westlaw documents, and the stock jumped 11 percent and 10 percent on back-to-back days when the news landed.
After the drawdown, the valuation sits at roughly the 5th percentile of its own decade on EV/EBITDA. A tollbooth on the legal system at a decade-low relative price, with the AI threat converting into an AI partnership. That is an A, and the only reason it is not an S is that Constellation’s disconnect is simply bigger.
The Final Board
S: Constellation Software. A: Thomson Reuters. B: Stantec. C: Cameco. D: CAE. E: TELUS.
The pattern across all six: the market is pricing every one of them as a broken business. In my view only one or two of them actually are. The rest are broken stocks attached to working businesses, and that gap is where returns come from.
If you want the full reasoning, the charts, and the moments where I argue with my own past decisions, the video walks through all six in detail. And if you want the tools I used for every valuation call in this article, the stock reports, screener, and portfolio tracker are all part of Stocktrades Premium.
None of this is investment advice. I own Constellation Software and WSP Global, I sold TELUS, and I have no position in the others discussed. Do your own research before buying anything.
