When it comes to investing, it’s no secret that purchasing high-quality stocks is the ideal strategy. However, the problem is that the highest quality and, therefore, the most sought-after stocks typically trade at a premium, reflecting the market’s recognition of their stellar potential.
To buy these stocks at an attractive valuation, your best bet is to identify these top-notch stocks, keep them on your watchlist, and continuously monitor their performance and pricing dynamics.
Then when the golden opportunity arises, and these high-quality stocks temporarily trade below their inherent value, you can pull the trigger and gain some exposure.
If you’ve got some cash and are looking to buy some of the best and highest-quality stocks on the market, here are three you’ll surely want to watch for a dip in their valuations.
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One of the best long-term investments you can make in Canada
One of the very best stocks of all time that consistently proves what an excellent investment it is, is Dollarama (TSX:DOL), the ultra-popular discount retailer.
Dollarama is one of the top stocks to buy and hold long term because it’s an incredible and consistent growth stock. However, its core business operations actually make it highly defensive.
Because the stock sells many essential household products cheaper than its big-box competitors, it will typically see the most growth when the economy worsens, and other stocks are being impacted severely.
Yet in times of economic growth, it can continue to see an increase in sales, especially as it continues to open new locations and expand its footprint across Canada.
Therefore, given Dollarama’s impressive business model, and the fact that it’s constantly executing its goals, it’s no surprise that over the last decade, it’s earned investors a total return of more than 609%. That’s a compound annual growth rate of 21.6%.
Therefore, anytime Dollarama stock pulls back from its highs, that discount likely won’t last very long. If you notice the stock taking a dip, it’s certainly one of the top Canadian stocks you’ll want to buy and hold long term.
A top Canadian tech stock to buy on the dip
In addition to Dollarama, another unbelievable stock to buy for the long run, and one that can grow your capital rapidly, is Shopify (TSX:SHOP), the incredible Canadian tech stock.
There’s no question that the increase in popularity of e-commerce and online shopping is here to stay. And one of the most dominant stocks in the e-commerce space is Shopify.
Its easy-to-use platform that can cater to businesses from start-ups to medium-sized enterprises continues to see an increase in usage, especially as both retailers and shoppers continue to adapt to the new normal in the retail sector.
This potential has already helped Shopify to see significant growth in its first eight years as a publicly traded company. And it continues to have significant growth potential.
For example, even though many expect a recession to materialize in the near term, and although retailers have already begun to see a slowdown in discretionary spending, analysts still expect Shopify can grow its sales by more than 24% and just under 18% next year.
Therefore, any time you can buy Shopify, one of the best stocks in Canada, when its price takes a dip, it’s certainly an investment that can grow your capital significantly and one you can plan to own for years to come.
One of the very best residential REITs in Canada
Lastly, if you want exposure to the real estate sector, one of the best stocks you can buy on the dip is Canadian Apartment REIT (TSX:CAR.UN).
CAPREIT, as it’s known, is the largest residential real estate investment trust in Canada. It has over 50,000 sites and suites in its portfolio, which significantly diversifies its operations and helps to lower risk for investors.
In addition to its diversification, though, CAPREIT also has a professional management team overlooking its operations and is constantly looking to expand its operations and add new properties to its portfolio or invest in its existing properties to increase their value and consequently value for shareholders.
Therefore, it’s an ideal investment if you want exposure to real estate and one of the best Canadian stocks to buy whenever it takes a dip in price.
