3 Growth Stocks That Could Be Good for Long-Term Investing

Lightspeed POS, Dye & Durham, and goeasy could be ideal stock picks for long-term growth-seeking investors.

| More on:
investment research

Image source: Getty Images

The recent pullback in growth stocks trading on the TSX is creating excellent opportunities for value investors seeking long-term growth. Today I will discuss three growth stocks that could be a bargain, despite some of them having high valuations. Adding these stocks could help you capitalize on the underlying companies’ massive upside potential.

Lightspeed POS

Lightspeed POS (TSX:LSPD)(NYSE:LSPD) has been one of the best-performing stocks in the last two years. The high-growth tech stock launched on the TSX in March 2019, and it has soared. The stock is trading for $85.70 per share, boasting a 353% increase in its valuation in just two years.

While the stock has been a fantastic growth story on the TSX, but it’s priced too high right now. Its high valuation could be a reason for Lightspeed’s recent volatility. As long as it does not reach a more favourable price-to-sales ratio, the volatility will likely remain. The volatility might be worth it for many investors due to its impressive growth potential.

Now could be an ideal time to establish a position in this growth stock.

Dye & Durham

Dye & Durham (TSX:DND) is a company that only recently became public, but it could be trading at a discount compared to its upside potential.

Since its launch on July 17, 2020, the stock has appreciated by over 180%. The stock’s rapid growth has slowed down in recent months. It is down by just over 20% from its highest valuation in February 2021.

While Lightspeed may have more growth potential than DND, the company’s shares are not as expensive as Lightspeed. DND offers cloud-based software to help its clients organize their records. Its tech solutions are in high demand from government, financial, and legal entities. It has huge upside potential.

goeasy

goeasy (TSX:GSY) is the only stock among the three that is not trading for a discount right now. Its valuation is near its all-time high, and its shares have been climbing consistently since March 20, 2020. Unlike Lightspeed and DND, goeasy is not priced as high as a growth stock, but it has been performing like one.

Its valuation is up by almost 730% in the last five years. Its growth in the last decade has been fantastic. Despite such a stellar growth, it boasts only a $2.36 billion market capitalization. While I will not likely expect it to exhibit the same performance over the next decade, its low market capitalization suggests there is still plenty of room for it to grow.

A consumer-focused financial services company, goeasy offers customers all types of loans. With pent-up consumer demand rising along with higher than usual savings, we could see a return to spending. goeasy could have substantial business coming its way in the post-pandemic economy.

Foolish takeaway

Growth stocks cooled down after an outstanding year in 2020 despite all the challenges. Many Canadian investors have rotated out of high-priced tech stocks and move to value stocks. The recent pullback in the tech sector could be an ideal opportunity to load up on growth stocks with excellent long-term prospects.

Lightspeed POS, Dye & Durham, and goeasy could be excellent picks for investors seeking growth stocks with a long investing horizon.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of Lightspeed POS Inc.

More on Investing

Paper Canadian currency of various denominations
Bank Stocks

1 Magnificent Canadian Dividend Stock Down 28% to Buy and Hold for Decades

This top Canadian dividend stock is underperforming its large peers this year, but a turnaround could be on the horizon.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

hand stacks coins
Investing

Secure a Wealthy Future With These 3 Canadian Stocks

These Canadian stocks have the potential to appreciate substantially over time and may also enhance returns through dividend payments.

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

analyze data
Investing

3 Blue-Chip Stocks Every Canadian Should Own

These blue-chip stocks are backed by large-cap companies with well-established businesses, solid fundamentals, and a growing earnings base.

Read more »

dividends grow over time
Stocks for Beginners

The Smartest Growth Stock to Buy With $2,000 Right Now

Do you have $2,000 to invest for the long term? These three TSX stocks have and will continue to deliver…

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »