With the economy soon to return to its pre-pandemic activity rates (well, hopefully), some stocks are likely to perform better than others. These two top TSX growth stocks have already started to see some positive sentiment of late.
Let’s take a look at why more upside may be on the horizon for these companies.
Restaurant Brands
A company that has been hampered significantly by the pandemic, Restaurant Brands (TSX:QSR)(NYSE:QSR) remains one of my top pandemic reopening plays right now.
Indeed, the company’s same-store sales are due for a dramatic rise when this whole ordeal is over. In-restaurant dining restrictions are already being lifted in many of the company’s core markets. Indeed, given the pain these restrictions caused, a return to a new normal is highly anticipated among investors.
The company’s Tim Hortons’ franchise has been struggling for some time. Indeed, these struggles existed prior to the pandemic. However, I believe Restaurant Brands’ management team has addressed many of the issues causing poor performance. Accordingly, as we all get back to our daily routines and pick up a coffee and a donut on the way to the office, Restaurant Brands could see outsized growth in the coming quarters.
The company’s other core brands, Burger King and Popeyes Louisiana Kitchen have outperformed throughout the pandemic and prior. Investors betting on Restaurant Brands are buying the entire package. And the quality of the banners held in this portfolio is truly world-class.
Constellation Software
In the software sector, one of my top picks for long-term investors continues to be Constellation Software (TSX:CSU). Indeed, a significant reason for this is the company’s performance since its 2006 Initial Public Offering (IPO).
When Constellation went public at around $24 per share, no one saw this stock appreciating to above $1,800 per share in the next fifteen years. However, here we are.
Constellation has gotten here by adopting a well-executed growth-by-acquisition strategy. The company has essentially consolidated a very fragmented software market in North America. With more than 500 deals under the company’s belt, Constellation has provided incredible revenue and cash flow growth over time.
These deals have been well-orchestrated and timely in nature. However, one could argue that the kind of bull market we’ve seen in tech may not be replicable in the future.
That said, the software market continues to provide tonnes of room for consolidation currently. There are thousands of companies similar to the ones Constellation has been bought that are seeking suitors currently.
Accordingly, long-term investors betting on the strength of Constellation’s team and strategy can’t go wrong owning this name.
