The Canadian market has been riding one heck of a bull run since early 2020. The S&P/TSX Composite Index is up an incredible 70% since the COVID-19 market crash in March of last year.
Over the past 18 months, there haven’t been many obvious market dips to take advantage of. Canadians that have been investing since the COVID-19 market crash have needed to be comfortable buying at all-time highs.
Fortunately, at least for the bulls, the market has not lost much momentum since bottoming out in March 2020. We did, however, witness a slight pullback in September.
The Canadian market is now trading a couple of points below all-time highs. It’s not a major pullback, but it is one that I’ll be looking to take advantage of.
With just $500, you can own this entire basket of three market-beating Canadian stocks.
Image source: Getty Images
Investing in top growth stocks is not cheap
Nuvei (TSX:NVEI) only joined the TSX in September 2020, but the Canadians stock is already up 250%. Its market-crushing growth over the past year has resulted in a market cap now above $20 billion.
The tech company is going head to head with Lightspeed Commerce, another Canadian leader in the payment-processing space. Similar to Lightspeed, Nuvei is working aggressively in expanding not only its product offering but its international presence, too.
Nuvei’s steep valuation may be a turn off for some value-oriented investors. At a price-to-sales ratio above 40, it will be very difficult to predict the performance of the Canadian stock in the short term. As a long-term investor, though, Nuvei’s strong position in a growing market has it at the top of my watch list right now.
A well-priced tech stock
Growth stocks, particularly in the tech sector, we’re among the top performers in 2020. The current bull run that began in late March 2020 was led by high-growth tech stocks, many of which are now trading at opportunistic discounts.
It’s been a whirlwind past few years for Kinaxis (TSX:KXS) shareholders. The stock has had no shortage of volatility, but that hasn’t been without market-beating growth.
The tech stock is up 175% over the past five years compared to the Canadian market’s return of just 40%.
My bet is that Kinaxis will underperform Nuvei over the next decade. That being said, it’s much more reasonably priced.
If you’re in search of a growth stock, and Nuvei’s price tag is too high for you, which is completely understandable, Kinaxis might be a better fit for your portfolio.
This Canadian stock won’t be trading at a discount for long
Speaking of well-priced growth stocks, I’ve got WELL Health Technologies (TSX:WELL) as the last pick in my $500 basket of Canadian stocks.
Investors can pick up shares of the telemedicine stock for less than $10 right now. Even from a valuation perspective, it’s certainly not expensive, especially considering it was a four-bagger in 2020 alone.
It was no surprise to see shares of the telemedicine company explode early on in the pandemic. The sudden rise in demand for telemedicine services drove up share prices of many companies in the space.
Down 15% year to date and close to 25% from all-time highs, WELL Health is near the top of my watch list this month.
I’m a huge bull on the telemedicine industry. And being a long-term investor, I’m willing to be patient while WELL Health stock gets back on track to delivering market-beating growth to its shareholders.
