On January 27, Sherry Paul, Morgan Stanley senior portfolio manager, joined CNBC’s ‘Closing Bell’ to discuss whether more volatility is ahead. Paul described a shift from pre-Davos optimism to a post-Davos market defined by volatility, a weak dollar, and a new world order. She explained that this new era demands urgent domestic AI advancement and supply chain restructuring. While volatility will persist, Paul views it as an emergent opportunity to move beyond the MAG7 toward magnificent thematics like AI automation, innovation, and longevity. Her core thesis for 2026 is that every company is now a tech company. Paul also rejected comparisons to the early 2000s dot-com bubble and asserted that the current technological race is fundamentally more substantial than the early internet land rush.
On January 6, Tim Seymour of Seymour Asset Management appeared on CNBC’s ‘The Exchange’ to discuss whether international markets may be able to sustain their 2025 outperformance through 2026. He argued that investors have not missed the move, as these are long-tail mean reversion trades. Seymour supported this by citing a combination of factors: attractive valuations, earnings growth, and a weaker dollar. He emphasized that the themes driving the US market, such as AI, defense spending, and infrastructure, are global. He concluded that if global growth remains in line with or exceeds expectations, international markets are positioned to outperform the US even further.
That being said, we’re here with a list of the 12 most undervalued Canadian stocks to buy according to hedge funds.
Our Methodology
We sifted through the Finviz stock screener to compile a list of undervalued Canadian stocks that had a forward P/E ratio under 15. We then selected 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2025.
Note: All data was sourced on February 5.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12 Most Undervalued Canadian Stocks to Buy According to Hedge Funds
12. Magna International Inc. (NYSE:MGA)
Number of Hedge Fund Holders: 25
Magna International Inc. (NYSE:MGA) is one of the most undervalued Canadian stocks to buy according to hedge funds. On January 27, Scotiabank analyst Jonathan Goldman raised the price target for Magna to $57 from $52 while maintaining a Sector Perform rating. The firm observed that increased vehicle production costs resulting from tariffs may soon be passed on to consumers or suppliers in 2026. Additionally, the firm highlighted potential downside risks to production volumes, noting that these volumes serve as the primary factor in determining supplier earnings.
Furthermore, on January 23, Barclays analyst Dan Levy increased the firm’s price target for Magna to $58 from $52 with an Equal Weight rating. This adjustment was part of a broader review of the autos and mobility sector in anticipation of Q4 2025 results. Barclays continues to favor vehicle manufacturers over suppliers, noting that car makers are currently benefiting from stable production rates and a reduction in losses associated with electric vehicle programs.
On January 15, Goldman Sachs also increased the price target for Magna to $68 from $60 with a Sell rating on the shares. The revised target accounts for recent automotive sales data and various supplier comments made at conferences during the quarter regarding 2026 growth expectations. These updates reflect the firm’s assessment of current market performance and industry outlooks.
Magna International Inc. (NYSE:MGA) manufactures and supplies vehicle engineering, contract, and automotive space. It operates through four segments: Body Exteriors & Structures, Power & Vision, Seating Systems, and Complete Vehicles.
11. Gildan Activewear Inc. (NYSE:GIL)
Number of Hedge Fund Holders: 28
Gildan Activewear Inc. (NYSE:GIL) is one of the most undervalued Canadian stocks to buy according to hedge funds. On February 3, Scotiabank increased its price target for Gildan Activewear to $72 from $66 while maintaining an Outperform rating. The firm is updating its estimates for the company in anticipation of Q4 2025 results to account for the finalized deal with Hanesbrands. The firm remains constructive on Gildan, highlighting the company’s solid positioning within the apparel industry.
On January 27, TD Securities analyst Brian Morrison increased the firm’s price target for Gildan Activewear to $77 from $74 with a Buy rating as part of a Q4 2025 preview. The firm suggests that providing details on the Hanesbrands integration strategy should support investor confidence regarding Gildan’s capacity to capture market share and realize synergies.
On the same day, BMO Capital raised its price target for Gildan Activewear to $78 from $70 with an Outperform rating. Following the Impressions Expo, the firm expressed confidence in Gildan’s capacity to utilize its low-cost, vertically integrated manufacturing model to foster wholesale growth. This strategy is expected to help the company aggressively capture market share while sustaining higher margins.
Gildan Activewear Inc. (NYSE:GIL) manufactures and sells various apparel products. The company provides various activewear products and also offers hosiery products under Gildan, GoldToe, Signature Gold by GoldToe, GoldToe Edition, Peds, MediPeds, All Pro, and Powersox brands.
10. Bausch Health Companies Inc. (NYSE:BHC)
Number of Hedge Fund Holders: 32
Bausch Health Companies Inc. (NYSE:BHC) is one of the most undervalued Canadian stocks to buy according to hedge funds. On January 23, Bausch Health announced the results of its global Phase 3 RED-C clinical program, which evaluated amorphous-rifaximin solid soluble dispersion for the primary prevention of hepatic encephalopathy in adults with liver cirrhosis. The program consisted of two randomized, double-blind, placebo-controlled trials involving over 1,000 patients across 17 countries.
Although the treatment was found to be safe and well-tolerated, both clinical trials failed to meet the primary endpoint of delaying the first episode of hepatic encephalopathy in patients with no prior history of the condition. The company is now reviewing the full dataset to identify potential new development opportunities and remains committed to advancing treatments in hepatology and other therapeutic areas. Bausch Health also extended its gratitude to the patients, investigators, and research teams involved in the 398-site global study.
Earlier, on January 7, Truist analyst Les Sulewski increased the price target for Bausch Health Companies Inc. (NYSE:BHC) to $8 from $7 while maintaining a Hold rating. Sulewski highlighted that the theme of affordable medicines remains an attractive investment focus heading into 2026.
Bausch Health Companies Inc. (NYSE:BHC) operates as a diversified specialty pharmaceutical and medical device company. It develops, manufactures, and markets products in gastroenterology, hepatology, neurology, dermatology, generic pharmaceuticals, OTC products, aesthetic medical devices, and eye health internationally.
9. CGI Inc. (NYSE:GIB)
Number of Hedge Fund Holders: 32
CGI Inc. (NYSE:GIB) is one of the most undervalued Canadian stocks to buy according to hedge funds. On January 29, Canaccord lowered its price target for CGI to C$150 from C$155 while maintaining a Buy rating.
On January 27, TD Securities transferred coverage of CGI to analyst David Kwan, who maintained a Buy rating and a C$145 price target. The firm expressed confidence that CGI is positioned to achieve enhanced organic growth and margin improvements, which are expected to support its robust free cash flow and balance sheet. Additionally, the firm noted that the current attractive environment for M&A could lead to continued activity in that area for the company.
On the same day, Scotiabank analyst Kevin Krishnaratne assumed coverage of CGI with a Sector Perform rating and a C$140 price target, citing the company’s exposure to discretionary IT spending as the reason for the neutral stance. The firm noted that CGI’s Systems Integration and Consulting segment has maintained book-to-bill ratios below 100% for several quarters, resulting in softer sales trends that are expected to persist through at least H1 2026.
CGI Inc. (NYSE:GIB) provides IT and business process services in Western & Southern Europe, the US, Canada, Scandinavia, Northwest & Central-East Europe, the UK, Australia, Germany, Finland, Poland, the Baltics, and the Asia Pacific.
8. Manulife Financial Corporation (NYSE:MFC)
Number of Hedge Fund Holders: 34
Manulife Financial Corporation (NYSE:MFC) is one of the most undervalued Canadian stocks to buy according to hedge funds. On January 8, Barclays increased its price target for Manulife Financial to C$52 from C$49, while keeping an Equal Weight rating. As part of its 2026 outlook, the firm expressed a cautiously optimistic view on life insurers and noted that capital strength, cash flow, and consolidation are offsetting challenges like spread compression and tech expenditures.
In Q3 2025, Manulife Financial Corporation (NYSE:MFC) highlighted a 16% year-over-year increase in EPS and a core ROE of 18.1%. The company’s performance was supported by record core earnings in its Asia, Canada, and Global WAM (Wealth and Asset Management) segments, with the Asia division notably delivering a 29% increase in core earnings. During the quarter, Manulife also reached a milestone by announcing a 50:50 JV with Mahindra & Mahindra to enter the Indian life insurance market, a move intended to leverage Mahindra’s local distribution and Manulife’s global expertise.
Despite these gains, the Global WAM segment faced $6.2 billion in net outflows, and the US segment saw a 20% decrease in core earnings due to unfavorable life insurance claims. The company also noted potential volatility in the Hong Kong market and an expected $25 million quarterly impact from regulatory changes to the Mandatory Provident Fund.
Manulife Financial Corporation (NYSE:MFC), together with its subsidiaries, provides financial products and services internationally. It operates through Wealth & Asset Management Businesses, Insurance & Annuity Products, and Corporate & Other segments.
7. Alamos Gold Inc. (NYSE:AGI)
Number of Hedge Fund Holders: 35
Alamos Gold Inc. (NYSE:AGI) is one of the most undervalued Canadian stocks to buy according to hedge funds. On February 4, CIBC analyst Cosmos Chiu increased the price target for Alamos Gold to C$80 from C$74 with an Outperformer rating.
This adjustment was made as part of a broader increase across the precious metals group following CIBC’s decision to raise gold price forecasts to $6,000 per ounce in 2026 and $6,500 in 2027, alongside higher copper price assumptions. Chiu noted that while demand drivers from 2025 are expected to persist into 2026, there is now heightened geopolitical uncertainty.
On January 26, Scotiabank analyst Ovais Habib raised the firm’s price target for Alamos Gold to $55 from $50 while keeping an Outperform rating. This adjustment is part of a broader update to the firm’s price targets for the gold and precious minerals sector, driven by revised upward forecasts for both gold and silver. The firm noted that these higher commodity projections are supported by ongoing economic and geopolitical uncertainty, as well as continued strong buying activity from central banks.
Alamos Gold Inc. (NYSE:AGI) operates as a gold producer in Canada, Mexico, and the US. The company primarily explores for gold deposits.
6. Kinross Gold Corporation (NYSE:KGC)
Number of Hedge Fund Holders: 35
Kinross Gold Corporation (NYSE:KGC) is one of the most undervalued Canadian stocks to buy according to hedge funds. On February 4, CIBC raised its price target for Kinross Gold to $54 from $38.50 with an Outperformer rating on the stock. This increase is part of a broader upward revision across the precious metals sector.
CIBC raised its gold price forecasts to $6,000 per ounce for 2026 and $6,500 for 2027. Additionally, the firm noted higher copper price assumptions and indicated that while 2025’s demand drivers should continue into 2026, the market is facing increased geopolitical uncertainty.
Furthermore, on January 26, Scotiabank also increased its price target for Kinross Gold Corporation (NYSE:KGC) to $45 from $32 and kept an Outperform rating. This adjustment came as part of a sector-wide update for gold and precious minerals stocks, reflecting the firm’s higher forecasts for gold and silver. These revised projections are supported by ongoing economic and geopolitical uncertainty, as well as robust buying activity from central banks.
Kinross Gold Corporation (NYSE:KGC), together with its subsidiaries, acquires, explores, and develops gold properties principally in the US, Brazil, Chile, Canada, and Mauritania.
5. B2Gold Corp. (NYSE:BTG)
Number of Hedge Fund Holders: 37
B2Gold Corp. (NYSE:BTG) is one of the most undervalued Canadian stocks to buy according to hedge funds. On February 4, CIBC analyst Anita Soni increased the price target for B2Gold to $6.50 from $6 with a Neutral rating. This adjustment followed a sector update where CIBC raised its gold price forecasts to $6,000 per ounce for 2026 and $6,500 for 2027, alongside higher copper price assumptions. Soni noted that while demand drivers from 2025 are expected to persist, the market is facing heightened geopolitical uncertainty.
Earlier on January 15, Raymond James also raised its price target for B2Gold Corp. (NYSE:BTG) to $6.50 from $6.00 while maintaining an Outperform rating. This adjustment was made as part of the firm’s broader update within the mining group to incorporate new commodity price forecasts for precious and base metals.
The firm increased its gold and silver price estimates, citing persistent economic and political uncertainty as key drivers. Within the base metals complex, Raymond James continues to favor copper, anticipating growing supply deficits over the medium to long term.
B2Gold Corp. (NYSE:BTG) operates as a gold producer company in Canada. The company operates the Fekola Mine in Mali, the Masbate Mine in the Philippines, and the Otjikoto Mine in Namibia.
4. New Gold Inc. (NYSEAMERICAN:NGD)
Number of Hedge Fund Holders: 37
New Gold Inc. (NYSEAMERICAN:NGD) is one of the most undervalued Canadian stocks to buy according to hedge funds. On January 26, Scotiabank analyst Eric Winmill raised the firm’s price target on New Gold to $12.75 from $10.50 with an Outperform rating. The firm is updating targets across its Gold & Precious Minerals coverage, driven by increased forecasts for gold and silver. These higher projections are supported by economic and geopolitical uncertainty, as well as continued strong buying from central banks.
Earlier on January 23, Canaccord raised its price target for New Gold Inc. (NYSEAMERICAN:NGD) to C$18 from C$15 while maintaining a Buy rating.
In Q3 2025, New Gold Inc. (NYSEAMERICAN:NGD) reported an all-time production record at its Rainy River mine and strong gold prices. The company generated $205 million in free cash flow, a 225% increase over the previous quarter, with Rainy River alone contributing a record $183 million. Consolidated production reached 115,200 ounces of gold and 12 million pounds of copper, while all-in sustaining costs dropped significantly to $966 per gold ounce.
New Gold Inc. (NYSEAMERICAN:NGD) is an intermediate gold mining company that develops and operates mineral properties in Canada. It primarily explores for gold, silver, and copper deposits.
3. Nutrien Ltd. (NYSE:NTR)
Number of Hedge Fund Holders: 37
Nutrien Ltd. (NYSE:NTR) is one of the most undervalued Canadian stocks to buy according to hedge funds. On February 2, Scotiabank raised its price target for Nutrien to $70 from $63 while keeping a Sector Perform rating. The firm advised caution regarding fertilizer markets following the spring season and stated that the company appears to be fairly valued at current levels.
On January 27, Oppenheimer increased its price target for Nutrien Ltd. (NYSE:NTR) to $76 from $64 while keeping an Outperform rating. Despite anticipating another challenging year for the broader agriculture sector, the firm expects stock performance to be driven by specific company catalysts and pockets of stabilization.
Key industry themes identified by Oppenheimer include consolidation, affordability, and innovation, noting that input demand is being shaped by customer value perception while machinery prepares for a cycle transition and the ingredients segment emerges as an area of interest awaiting a catalyst.
Nutrien Ltd. (NYSE:NTR) provides crop inputs and services. The company operates through four segments: Nutrien Ag Solutions, Potash, Nitrogen, and Phosphate.
2. IAMGOLD Corporation (NYSE:IAG)
Number of Hedge Fund Holders: 43
IAMGOLD Corporation (NYSE:IAG) is one of the most undervalued Canadian stocks to buy according to hedge funds. On February 4, CIBC raised its price target for IAMGold to $34 from $20 with an Outperformer rating. The adjustment is part of a broader sector update in which CIBC raised its gold price forecasts. The firm also increased its copper price assumptions. CIBC stated that while the demand drivers seen in 2025 are expected to persist through 2026, the market remains influenced by heightened geopolitical uncertainty.
Furthermore, on January 26, Scotiabank also raised its price target for IAMGOLD Corporation (NYSE:IAG) to $23 from $15 while keeping a Sector Perform rating on the shares. This adjustment was announced as part of the firm’s broader update to its price targets for gold and precious minerals stocks.
These adjustments reflect an increase in both gold and silver price forecasts. The firm noted that these revised estimates are supported by ongoing economic and geopolitical uncertainty, as well as continued strong buying activity from central banks.
IAMGOLD Corporation (NYSE:IAG), through its subsidiaries, operates as a gold producer and developer in Canada and Burkina Faso.
1. Barrick Mining Corporation (NYSE:B)
Number of Hedge Fund Holders: 75
Barrick Mining Corporation (NYSE:B) is one of the most undervalued Canadian stocks to buy according to hedge funds. On February 4, CIBC raised its price target for Barrick Mining to $71 from $50, while keeping an Outperformer rating. As with its other precious metals updates, the firm adjusted its targets following a significant upward revision of its gold price forecasts to $6,000 per ounce for 2026 and $6,500 for 2027.
CIBC also increased its copper price assumptions. The firm noted that although demand drivers from 2025 are expected to persist, the 2026 outlook is characterized by heightened geopolitical uncertainty.
On January 26, Scotiabank raised the price target for Barrick Mining Corporation (NYSE:B) to $63 from $43 with an Outperform rating. This adjustment is part of an update to the firm’s price targets for the gold and precious minerals sector, reflecting higher forecasts for both gold and silver. The firm noted that these revised projections are driven by persistent economic and geopolitical uncertainty.
Barrick Mining Corporation (NYSE:B) explores, develops, produces, and sells mineral properties. The company explores for gold, copper, silver, and energy materials.
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