There have been a lot of companies seeing major movements in the last year. Some have soared upwards, while others have dropped down. But what if one of those soaring companies took a dive? Even a slight drop could mean huge returns for investors over the next few years.
Today, we’re going to look at two growth stocks to buy just on such an occasion.
Fairfax Financial Holdings
Fairfax Financial Holdings (TSX:FFH) has been a soaring stock in the last year or so. Shares of FFH stock are currently up by 71% in the last year alone. That’s far and away better than the performance of the TSX today, which is up under 4% as of writing.
What makes this stock so good? It’s down to the management team. The company has managed to create growth at a time when there isn’t much growth to go around. It’s a property and casualty insurance broker but also invests in value companies that have growth in the near future.
This has proven a lucrative way to create returns, as shares continue to climb and earnings continue to come out higher than analyst estimates. And yet, FFH stock currently trades in value territory.
Investors could already pick up shares of FFH stock trading at 8.37 times earnings as of writing. But perhaps wait for a dip. Shares have soared past all-time highs in the last month, up 17% in that time. Should a dip of even 5% come your way, I’d take it.
Constellation Software
Another stock that certainly bares mentioning is Constellation Software (TSX:CSU). This tech stock perhaps is the only tech stock out there that you can pick up for stability alone. That again comes down to a stellar management team with a focus on acquisitions.
Constellation stock has grown over the years by picking up essential software and giving it the attention it needs to thrive. Then it’s able to put it out under its own brand. Yet shares are expensive, which is why the company is now creating offshoots of Constellation stock. This was recently done in the last year, providing exposure to European software companies.
In the last year, shares of Constellation stock are up by a more reasonable 24% as of writing. However, the stock has been far less volatile during that time. There have been no huge dips or dives, with stable climbs that investors have grown used to over the years.
Shares are about where they were at the beginning of the month, and it looks quite expensive at the moment. Even so, analysts believe this stock could surge when the market recovers, adding on another $1,000 to its share price! So, if there’s a dip, again, I would jump on it.
Bottom line
We all think either that we will never be able to buy into growth stocks bound for greatness or we’ll die trying to reach the market bottom. In the case of these two growth stocks, think long term. Both have superior management teams that will see these stocks rise higher and higher in the years to come. What’s more, they’ve already done it in one of the most volatile periods in years.
