Have $10,000? 2 Growth Stocks That Could Rebound in 2021

Growth stocks like WELL Health Technologies (TSX:WELL) could rebound in 2021.

| More on:

Growth stocks have had a difficult year so far. Several high-flying tech stocks have lost significant value in recent months. With rising inflation and interest rates, this pain in growth stocks could continue. 

However, some stocks may rebound sooner than investors expect. Here are the top two growth stocks that could rebound in 2021.  

Growth stock #1

WELL Health Technologies (TSX:WELL) has lost 26% of its value since hitting an all-time high. That’s not bad compared to the rest of the tech market but still significant. 

However, WELL Health has several catalysts on the horizon that could unlock value for shareholders in 2021. For one, it has plenty of dry powder (read: cash) on its balance sheet to acquire more companies and expand its operations. At the time of writing, the company has $83 million in cash on its books and very little debt. 

A bigger catalyst is the company’s entry into the United States this year. The acquisition of Circle Medical was completed a few months ago and gives the WELL Health team plenty of headroom to expand its footprint in the world’s most important healthcare market. 

These catalysts make WELL Health an ideal growth stock for 2021. 

Growth stock #2

Goodfood Market’s (TSX:FOOD) ability to outperform the broader market became clear in 2020. The stock rallied by more than 300%, as it benefited from the growing demand for online grocery services.

With lockdowns in place, the platform quickly became a firm favourite for customers. Its customer base grew significantly as most people opted for online shopping and cooking at home. Fast forward to 2021, and the stock has taken a significant hit, tanking by more than 50% from its all-time highs. The correction arguably makes this stock more attractive for growth investors. 

In the most recent quarter, the meal kit company delivered 71% year-over-year growth in sales that crossed the $100 million mark for the first time. Sales topped analysts’ estimates, affirming the company’s services continue to resonate well with consumers, even as COVID-19 fears dissipate.

The market expects its sales to grow by 34% in 2021. The sales growth trend could be better given that many people still opt to cook fresh food at home rather than go out dining. Lower shipping and packaging unit costs should continue to cushion Goodfood Market margins.

After the recent correction lower, Goodfood Market is highly undervalued. The stock is cheap given its price-to-sales multiple of 1.49 and price-to-book multiple of 4.60. This team has built robust infrastructure and brand awareness that position it for tremendous growth. 

That’s what makes Goodfood Market yet another ideal growth stock for investors in 2021.

Bottom line

The best time to get greedy is when everyone else is fearful. Tech and growth stocks face tremendous fear right now, which has compressed valuations. Stocks like WELL Health and Goodfood Market should be on every bargain-hungry growth investor’s radar for 2021. 

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 Vishesh Raisinghani owns shares of WELL Health Technologies. The Motley Fool recommends Goodfood Market.

More on Tech Stocks

investment research
Tech Stocks

Is OpenText Stock a Buy, Sell, or Hold for 2025?

Is OpenText stock poised for a 2025 comeback? AI ambitions, a 3.8% yield, and cash flow power make it a…

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

An investor uses a tablet
Tech Stocks

Canadian Tech Stocks to Buy Now for Future Gains

Not all tech stocks are created equal. In fact, these three are valuable options every investor should consider.

Read more »

dividend growth for passive income
Tech Stocks

2 Rapidly Growing Canadian Tech Stocks With Lots More Potential

Celestica (TSX:CLS) and Constellation Software (TSX:CSU) are Canadian tech darlings worth watching in the new year.

Read more »

BCE stock
Tech Stocks

10% Yield: Is BCE Stock a Good Buy?

The yield is bigger than it's ever been in the company's history. That might not be a good thing.

Read more »

Happy shoppers look at a cellphone.
Tech Stocks

So You Own Shopify Stock: Is it Still a Good Investment?

Shopify (TSX:SHOP) stock has had a run, but there's still room to the upside.

Read more »

A person uses and AI chat bot
Tech Stocks

AI Where No One’s Looking: Seize Growth in These Canadian Stocks Before the Market Catches Up

Beyond flashy headlines about generative AI, these two Canadian AI stocks could deliver strong returns for investors who are willing…

Read more »