Even when the stock market is as expensive as it is now, there are undervalued stocks available. Here are three cheap Canadian growth stocks you can consider buying right now to help you grow your retirement portfolio faster.
A cheap Canadian growth stock
Cargojet (TSX:CJT) has been an incredible Canadian growth stock to buy and hold. In the last decade, a $10,000 initial investment transformed into about $205,700 — a 20-bagger!
Cargojet has a monopoly in Canada, providing time-sensitive air cargo services to major cities in North America. The company has been riding on the e-commerce growth trend, which isn’t losing momentum anytime soon. That is, e-commerce growth is expected to outpace the growth of many other industries.
Testament to Cargojet’s providing great value is it was able to expand its relationship with Amazon in April with a four-year agreement that had successive renewal options.
In 2020, during the pandemic, the company reported exceptional results that triggered the Canadian growth stock more than doubling within the period. Specifically, year over year (YOY), revenue rose 37% to $668.5 million and adjusted EBITDA, a cash flow proxy, jumped 86% to $291.4 million.
While there was a shift in the type of cargo delivered (e.g., to personal protective equipment), there was an increased demand for its air cargo services nonetheless.
Because of the extraordinary growth in 2020, the Canadian growth stock has pulled back about 25% since late 2020. CJT stock is well valued currently with approximately 37% near-term upside potential. It could be a great time to pick up the stock after it has consolidated since March.
The management was so confident about Cargojet’s business performance that it increased its dividend by 11% in March. Notably, interested investors should look forward to gaining more insight about the company on August 3 when Cargojet reports its Q2 results.
A Canadian growth stock in renewable energy
Over the years, Northland Power (TSX:NPI) has proven its ability to develop and commission renewable projects, particularly in offshore wind. In the past three years, it has grown its revenue at a compound annual growth rate (CAGR) of approximately 14% to more than $2 billion, while its assets increased at a CAGR of just 3.5%.
The global company will carry on benefiting from the shift to renewable energy. The Canadian growth stock roughly doubled last year. The healthy pullback from its 2020 high is a good entry point for long-term growth. It starts you off with a yield of nearly 2.8%. Interested investors should mark the calendar, as Northland Power will report its Q2 financial results on August 11.
An undervalued Canadian growth stock in renewable gas
Expect to experience butterflies in your stomach if you’re putting money in small-cap Greenlane Renewables (TSX:GRN). Its market cap stands at about $219 million at writing. Any good or bad news could trigger extreme volatility in the stock. For example, although it popped 5% yesterday, the Canadian growth stock has been in a downward trend since early this year.
Greenlane is set out to reduce the carbon footprint in the natural gas grid and the transportation sector through its biogas upgrading systems. In 2020, the Canadian growth stock posted a record revenue of $22.5 million, up 147% YOY.
It gained stronger momentum in Q1 with revenue growth of 317% versus Q1 2020. It also ended Q1 with a sales order backlog of $37.7 million. Additionally, it had more than $715 million in its sales pipeline that could potentially convert to its backlog.
If the Canadian growth stock revisits its 2021 height, we’re looking at tremendous price appreciation of 78% from recent levels!
