Apart from the tech stocks that have been making the headlines since the beginning of 2023, there have also been some growth stocks catching investors’ attention. Given the situation that investors faced two years ago, many have learned the importance of adding some recession-resistant stocks to their portfolios to mitigate risks during difficult times.
Due to their favourable earnings outlook, a significant decline in inflation, and comparatively attractive valuations relative to specific Canadian dividend stocks, growth stocks are now highly appealing to investors. Here are the three stocks worth checking out in August 2023.
The Metals Company
The Metals Company (NASDAQ:TMC) is dedicated to developing the world’s most substantial reserve of metals essential for electric vehicles and low-carbon energy. These vital resources encompass nickel sulfate, cobalt sulfate, copper cathode, and manganese silicate.
According to projections from Maximize Market Research, industry experts anticipate that the global nickel sulfate market will experience a remarkable compound annual growth rate (CAGR) of 15.2% from 2023 to 2029, culminating in an estimated value of approximately US$8.52 billion by the end of the forecast period.
Now, this is certainly a high-risk, high-reward pick. The stock has shown extreme volatility of late, and I expect that to continue. However, for those seeking big-time upside, that’s the sort of tradeoff one often needs to make.
Last week, the company’s market capitalization experienced a notable increase of US$73 million, and it was evident that individual investors reaped the most significant benefits from this growth.
Constellation Software
Constellation Software (TSX:CSU), one of the prominent tech stocks on the TSX, holds a substantial market cap of $57 billion. Since its initial public offering in May 2006, this tech stock has delivered an astounding 19,000% return to its shareholders over the past 17 years. Throughout this period, the company has experienced rapid expansion, driven by a strategic combination of acquisitions and organic growth, leading to the establishment of a sizable and diverse customer base.
Those seeking long-term growth in the software sector can view Constellation as a proxy for the space. This company grows by acquiring small- to medium-sized software companies and improving their returns via scale. It’s a strategy that’s clearly worked, judging by the trajectory of Constellation’s long-term stock chart.
Presently, CSU stock is valued at 35 times forward earnings, indicating a relatively high valuation. However, it is noteworthy that the stock also trades at an 8% discount compared to consensus price target estimates, which may present an opportunity for investors.
Shopify
Investing in Shopify (TSX:SHOP) stock presents an opportunity to add a dependable asset to your investment portfolio. The company has demonstrated a consistent history of growth and innovation in the e-commerce industry, making it an attractive option for investors.
A significant strength of Shopify is its vast addressable market. Currently holding a 10% share of the American e-commerce market, the company is well positioned to experience robust and steady long-term expansion.
Shopify has recently introduced a new offering known as Shopify Credit. This exclusive business credit card is tailor made for its merchants and operates in partnership with Stripe and Celtic Bank. What sets it apart is that it functions like a credit card and comes with no fees attached, including late fees, foreign transaction fees, and interest charges.
Under the umbrella of “Shopify Magic,” which encompasses the firm’s generative artificial intelligence initiatives, Shopify has rolled out exciting new features. These tools, made available just last week, have the capability to generate product descriptions and blogs, as well as handle customers’ inquiries effectively. Additionally, a cutting-edge chatbot-like tool named “Sidekick” has been introduced to address queries related to business decision making.
