3 Oversold Growth Stocks That Could Double Your Investments in 3 Years

Given their growth prospects and discounted stock prices, these three growth stocks can deliver solid returns over the next three years.

| More on:

Amid the concerns over rising prices, central banks worldwide have raised interest rates. However, rising interest rates have increased borrowing costs, thus hurting the margins of growth stocks, which require higher capital to fund their growth initiatives. So, amid these concerns, growth stocks have been under pressure for the last few months.

However, the steep correction has allowed investors to start accumulating the following three cheap growth stocks, which have the potential to double your investments in the next three years.

goeasy

goeasy (TSX:GSY) is an excellent growth stock to have in your portfolio, given its solid track record, growth potential, and attractive valuation. Over the last 20 years, the company has grown its top and bottom line in double digits. Despite its solid performance, the company has just acquired 3% of its addressable market (loans under $50,000).

With the subprime market being highly fragmented, the company has the potential to expand its market share, given its omnichannel lending services, penetration in key geographic markets, geographical expansion, and focus on improving the consumer experience. The company has added new verticals through the acquisition of LendCare. Meanwhile, loan originations could rise with the improvement in economic activities, thus benefiting goeasy.

Notably, goeasy’s management has set solid three-year guidance, hoping to grow its loan portfolio by 67% to $3.6 billion by 2024. The company has also raised its dividend at a CAGR of over 34% since 2014. However, amid the recent selloff, the company has lost over 50% of its stock value compared to its 52-week high. Its NTM price-to-earnings multiple has also fallen to an attractive 8.4. So, considering all these factors, I believe goeasy would be an excellent buy right now.

WELL Health Technologies

Another cheap stock that you should start accumulating would be WELL Health Technologies (TSX:WELL). The digital healthcare company trades at over 60% lower than its 52-week high. However, the company continues to boost its financials amid the rising popularity of virtual services. Supported by a 40% year-over-year growth in its total omnichannel patient visits, the company experienced a record revenue in May.

WELL Health has announced to accelerate its M&A activities. Currently, it is working on acquiring INLIV, a premium omnichannel primary care provider, which could expand its presence to Alberta. So, given its healthy growth initiatives, the company’s management expects its revenue to cross $525 million while approaching $100 million in adjusted EBITDA. So, given the favourable environment, growth initiatives, and discounted stock price, I believe WELL Health can double your investment in the next three years.

Nuvei

Third on my list is Nuvei (TSX:NVEI)(NASDAQ:NVEI), which has lost over 75% of its stock value compared to its September highs. The correction has dragged its NTM price-to-earnings multiple down to 15.1, making it an attractive buy. With the growth in e-commerce, digital payments are also becoming popular. Meanwhile, the company is also expanding its APM (alternative payment method) portfolio, introducing new innovative products, and venturing into new markets to add new customers and increase revenue per customer.

Nuvei is also strengthening its presence in the online sports betting and iGaming space, which is expanding amid increased legalization. Meanwhile, the company’s management expects its revenue growth rate to be at 30% in the medium term while reaching an adjusted EBITDA margin of 50% in the long run. So, given its multiple growth drivers and attractive valuation, I expect Nuvei to deliver superior returns over the next three years.

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.

The Motley Fool has positions in and recommends Nuvei Corporation. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

More on Investing

how to save money
Investing

The Best TSX Stock for Canadians to Buy With $1,000 Right Now

iShares S&P/TSX 60 Index ETF (TSX:XIU) could be a great starter investment for new investors in Canada.

Read more »

Canadian dollars are printed
Dividend Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Toronto-Dominion Bank (TSX:TD) stock could do well in the year ahead.

Read more »

monthly desk calendar
Dividend Stocks

Monthly Income: Top Dividend Stocks to Buy in November

Here are two of the best monthly dividend stocks in Canada you can buy in November 2024 and hold for…

Read more »

hand stacks coins
Investing

A Top TSX Stock to Buy Now for Real Wealth Later

Intact Financial (TSX:IFC) stock is a fantastic dividend-growth play for the next 15 years and beyond.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, November 14

The U.S. wholesale inflation data and Fed chair Jerome Powell’s remarks about the economy will remain on TSX investors’ radar…

Read more »

Man data analyze
Tech Stocks

3 Reasons Celestica Stock Is a Screaming Buy Now

These three reasons make Celestica stock a screaming buy for long-term investors.

Read more »

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »