In today’s market, it can be hard to be bullish on growth stocks. Indeed, a growth-to-value rotation appears to be underway. Investors are increasingly looking at cyclical plays such as commodities, cycling out of growth names like we haven’t seen in some time.
However, this unique market dynamic provides an interesting opportunity for long-term investors. For those bullish on the long-term growth prospects of particular companies, now can be the time to strike.
Accordingly, let’s take a look at these three growth stocks. They’re names with excellent upside potential, given their undervalued stock prices. They’re also long-term winners with proven historical track records of growth.
Let’s get to it.
Restaurant Brands
As far as value goes in the growth investing space, Restaurant Brands (TSX:QSR)(NYSE:QSR) certainly remains a top pick.
This fast-food conglomerate is one with a steady-as-she-goes business model. Restaurant Brands’s core banners include Tim Hortons, Burger King, and Popeyes Louisiana Kitchen. These three banners are world class and have proven their growth potential in recent years.
However, the pandemic has thrown a monkey wrench into the company’s growth plans. In-restaurant dining restrictions and a multi-year turnaround effort at the company’s Tim Hortons banner have stymied near-term growth. Accordingly, many investors have sought growth elsewhere.
That’s understandable.
However, for investors with a longer-term investing time horizon, now may be a great time to pick up shares of this quality company. Indeed, there are few companies with the earnings quality and growth potential of Restaurant Brands on the TSX today. This company is a diamond in the rough.
Spin Master
One of the great growth plays on the TSX that has (finally) recently started getting some love from investors is Spin Master (TSX:TOY). And for good reason.
This Canadian toy maker has diversified its offering into digital gaming. Accordingly, the year-over-year growth rate of more than 400% in Spin Master’s digital gaming segment signals strong growth on the horizon.
However, some investors appear to be sleeping on this name. Spin Master hasn’t seen a lot of buying pressure in recent months, essentially trading flat from early March. I think more earnings surprises could provide another boost for long-term Spin Master shareholders. Accordingly, now may be a great time to pick up shares of this growth stock before they take off again.
Alimentation Couche-Tard
How a $50 billion company can fly under the radar is beyond me. However, many investors simply haven’t dug into the long-term growth companies like Alimentation Couche-Tard (TSX:ATD.B) can provide.
This global juggernaut in the gas station and convenience store space has seen a hit to its core business due to the pandemic. The company’s sales metrics have fallen, and its growth trajectory has slowed. Additionally, a lack of M&A activity of late has blunted the company’s growth-by-acquisition investment thesis.
That said, this all shall pass. For long-term investors looking past this period of volatility toward a brighter future, Couche-Tard is one of those growth stocks trading within the value grouping to look at today.
