2 Beaten-Down TSX Stocks I’d Buy This Week

Some top TSX growth stocks have sold off after third quarter earnings. Here’s two ultra-growth stocks to load up on this week!

| More on:

It has been a topsy-turvy week for TSX stocks. While the TSX Index is up 1.3% this week, many high-quality growth stocks have been on the decline. A lot of this appears to be related to market near-sightedness around third-quarter earnings. Sometimes, this short-term thinking can just be befuddling.

Why I don’t understand the stock market

For example, two weeks ago, Shopify came out with a massive earnings miss due to difficult year-over-year pandemic-related comps. Yet its stock rose more than 7% after the announcement.

On the flip side, a payments giant like Visa issued perfectly good results that beat the market’s expectations. After its conference call, the stock collapsed due to concerns of growth deceleration. Its stock is down nearly 8% since.

I don’t need to understand to profit long-term from short-term thinking

My point in these two examples is that the stock market in the short term can operate without reason. However, these types of seemingly random dips can be great opportunities for long-term, patient investors. Do you see a stock or long-term theme that you love? Why not take the market’s short-sightedness as a chance to buy a great company at an even better price?

If there is a business or a theme that you love, there are bound to be some blips along the way. Buying TSX stocks when the market loses focus can be a great way to supercharge longer-term returns.

Nuvei: A top TSX payments stock

Personally, I am trying to take advantage in these situations. One TSX stock that hit some weakness after its third-quarter earnings is Nuvei (TSX:NVEI)(NASDAQ:NVEI). It had really exceptional results in the quarter. Payment volumes increased 88% to $21.6 billion. Revenues increased 96% to $183.9 million. Adjusted EBITDA increased 97% to $80.9 million. It has an adjusted EBITDA margin of 44%! That means it is very efficient at producing profits.

Frankly, there is nothing wrong with those numbers Likewise, it raised its fourth-quarter and year-end outlook by a good margin! Yet this TSX stock is down almost 17% since the end of October. The total payments sector has been on the decline. Perhaps, that is dragging the stock down. It could also be that its valuation just got stretched (it is not a cheap stock).

Yet for a growth stock that is actually profitable, it is one TSX stock to take a good, hard look at here.

Top TSX growth stocks on sale now!

Telus International: A top TSX AI stock

Another TSX growth stock I am looking at today is TELUS International (TSX:TIXT)(NYSE:TIXT). No, I am not talking about its income-yielding, telecom parent, TELUS. TIXT is a really interesting play on the digitization of business processes. It is helping some of the world’s largest corporations utilize artificial intelligence and machine learning to streamline their customer interactions.

Like Nuvei, TIXT produced very solid third-quarter results. Revenues, adjusted EBITDA, and free cash flow all were up over last year by 40%, 51%, and 28%, respectively. Of course, TIXT is facing some cost inflation that could affect margins temporarily.

However, it still affirmed 2021 guidance to grow revenues, adjusted EBITDA, and adjusted EPS by over 35% this year. I don’t see the adoption of its services slowing just because inflation is rising. In fact, I see quite the opposite over the longer term. This TSX stock is down around 6% since earnings, and it looks like a nice bargain to pick up now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robin Brown owns shares of Visa, Nuvei Corporation, TELUS CORPORATION, and TELUS International (Cda) Inc. The Motley Fool owns shares of and recommends Nuvei Corporation and Shopify. The Motley Fool recommends TELUS CORPORATION, TELUS International (Cda) Inc., and Visa.

More on Tech Stocks

investment research
Tech Stocks

Is OpenText Stock a Buy, Sell, or Hold for 2025?

Is OpenText stock poised for a 2025 comeback? AI ambitions, a 3.8% yield, and cash flow power make it a…

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

An investor uses a tablet
Tech Stocks

Canadian Tech Stocks to Buy Now for Future Gains

Not all tech stocks are created equal. In fact, these three are valuable options every investor should consider.

Read more »

dividend growth for passive income
Tech Stocks

2 Rapidly Growing Canadian Tech Stocks With Lots More Potential

Celestica (TSX:CLS) and Constellation Software (TSX:CSU) are Canadian tech darlings worth watching in the new year.

Read more »

BCE stock
Tech Stocks

10% Yield: Is BCE Stock a Good Buy?

The yield is bigger than it's ever been in the company's history. That might not be a good thing.

Read more »

Happy shoppers look at a cellphone.
Tech Stocks

So You Own Shopify Stock: Is it Still a Good Investment?

Shopify (TSX:SHOP) stock has had a run, but there's still room to the upside.

Read more »

A person uses and AI chat bot
Tech Stocks

AI Where No One’s Looking: Seize Growth in These Canadian Stocks Before the Market Catches Up

Beyond flashy headlines about generative AI, these two Canadian AI stocks could deliver strong returns for investors who are willing…

Read more »