There are many great growth stocks under $10 that young Canadian investors should reach for if they’re looking for above-average gains over the next 10 years and beyond. While it’s nice to prefer stocks with lower prices, it’s vital to remember that it’s the market cap, not the stock price, that dictates how young a company is and how much potential it holds.
High-growth stocks for under $10 per share? They’re rare, but they do exist!
Undoubtedly, smaller companies can come with a higher magnitude of risk. In this piece, we’ll look at two stocks that I believe have incredible growth runways with far less risk than most other small-cap stocks out there.
StorageVault Canada: $4.85 per share
StorageVault Canada (TSXV:SVI) is a play on the Canadian self-storage market — a market that has more room for growth than in the states. The company took a mild hit to the chin last year, as COVID-19 pressures weighed on it. Shares of SVI pretty much fell in line with the market, shedding around 32% of its value from peak to trough before bouncing back in just a few months.
In prior pieces, I’ve highlighted how the COVID-induced, “move-to-the-suburbs” trend was working against StorageVault and other players in the self-storage space. As I mentioned, though, the trend was likely to reverse as things returned to normal and people were asked to go back into the office.
Undoubtedly, StorageVault is a great reopening play that won’t implode should the Delta variant trigger another round of lockdowns, work-from-home orders, and a continued move to the suburbs away from the inner cities.
I don’t think the move to the suburbs is sustainable in a post-pandemic environment. In fact, I think the suburbs have peaked, and the move back to the inner cities has just begun. As such, I’m continuing to pound the table on the $1.8 billion company and think it’s one of the better bargains on the TSX Venture Exchange these days.
Once a move back to the inner city takes hold, downsizing and densification trends will work in favour of the self-storage industry once again.
Fire & Flower Holdings: $0.93 per share
The Canadian cannabis retail scene is getting quite competitive. As further competitive pressures are applied, many small, independent pot shops could be at risk of closing. As a pot shop with a solid omnichannel presence, a strategic partnership with one of the largest convenience store giants out there, and a rock-solid balance sheet, I think Fire & Flower is a top candidate that’s going to stick around after the pot shop boom pulls back and the industry consolidates.
Cannabis is a commodity. It’s no longer enough to have a catchy pot shop name to enjoy economic profits. As the cannabis retail scene matures, it’s the firms that provide the greatest value to consumers that will thrive. That means the firms with the lowest prices and the most convenient locations (or best e-commerce platforms) will be the ones that will dominate at the expense of the firms that’ll end up crumbling at the hands of increased competition.
With shares trading at just 2.1 times sales, I think the $310 million company is a great buy for any small-cap portfolio. Most importantly, things are on the right track for the firm. As Fool Chris Liew pointed out, Fire & Flower has now posted four straight quarters in the green.
