Stock Up Sale
Whenever the stock market is on a bull run, many attractive investment options emerge. On March 22, 2022, the TSX posted a new record high of 22,074.35, notwithstanding the almost one-month-long war in Eastern Europe.
Canada’s primary equities benchmark continues its upward momentum on the strength of the energy and materials sectors. However, the health care (+2.81%), technology (+2.77%), and real estate sectors (+1.20%) led the advancers on record day. Meanwhile, three under-the-radar stocks appear ready to break out and deliver huge returns this year.
Accelerating growth
Verde Agritech (TSX:NPK) in the agricultural inputs industry reported mighty impressive financial results last year. This $423.18 million agricultural technology company is a leading producer of fertilizers. In the 12 months ended December 31, 2021, the top- and bottom-lines increased 202% and 540% versus full-year 2020.
In Q4 2021, gross margin, sales volume, and operating profit before non-cash events increased 75%, 137%, and 6,786% compared to Q4 2020. Cristiano Veloso, Verde’s Founder, President & CEO, said, “Thanks to our team and all their efforts in 2021, Verde continued its accelerated growth with improving numbers in every subsequent quarter.”
He adds, “We all recognize how fortunate we are to make a living while making a major contribution to the world.” Among management’s key objectives in 2022 are to increase commercial production, upgrade local infrastructure, and launch a new technology.
At $8.40 per share, the trailing one-year price return is 354.05%. The 12-month average target of market analysts is $12.39, although the appreciation could be more than 47.5%.
Stunning turnaround
Vermilion Energy (TSX:VET)(NYSE:VET) had a forgettable episode in 2020 when the energy stock sank rock-bottom to $2.39 on March 18 of the same year. Besides pulling the plug on dividend payments, it lost 71.7% overall. However, the $4.34 billion petroleum and natural gas producer made a stunning turnaround in the following year 2021.
The favourable pricing environment in 2021 due to the return of oil demand helped energy stocks recover from their slump. Vermilion finished the year at $15.90 for a total return of 179.9%. In 2021, sales and free cash flow increased 85.8% and 304.2% versus 2020.
Vermilion reported net earnings of $1.14 billion compared to the $1.51 billion net loss in the previous. On March 7, 2022, management announced the reinstatement of dividends. If you invest today, the share price is $26.74 (+68.2% year-to-date), while the dividend yield is 0.22%.
Sustainable gas technologies
Xebec Adsorption (TSX:XBC) trades at discount (-31.08% year-to-date), so the share price of $1.73 is a good entry point. Based on analysts’ forecasts, the return potential of this industrial stock in 12 months is between 75.7% ($3.04) and 246.8% ($6.00).
The $267.66 million company provides clean energy solutions for renewable and low-carbon gases used in energy, mobility, and industrial applications. In 2021, revenue jumped 81.4% year-over-year to $125.9 million. Notably, net loss shrunk 26.6% to $23.5 million compared to the previous year.
On March 16, 2022, management reported a record backlog of $123.8 million, or 23.7% higher than a year ago. Xebec should be at the front and centre in environmentally responsible gas generation. It plays a vital role in reducing their carbon footprints globally.
Exciting picks
The three growth stocks above are exciting picks for their imminent breakouts and potential superior returns.
