Got $3,000? 3 Growth Stocks to Double Up on Right Now

Canadian investors who have some cash to spend should look to top growth stocks like MTY Food Group Inc. (TSX:MTY) and others.

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The S&P/TSX Composite Index has been throttled since the middle of September. It suffered sharp losses the week ending Friday, September 22. Nearly every sector was battered as investor sentiment has darkened. Some of the worst-performing sectors included battery metals, health care, and base metals. Canadian investors may have to stomach a gloomy climate in the near term, as the domestic and global economic situation worsens. However, this presents a great opportunity to snatch up promising growth stocks on the dip as the environment is expected to improve in 2024.

Today, I want to explore how I’d look to spend $3,000 on some of my favourite growth stocks on the TSX. Let’s jump in.

Why Air Canada still has a shot to be the ultimate growth stock in the 2020s

Air Canada (TSX:AC) is the largest commercial airliner in the country. Shares of this growth stock looked to have put together a fantastic rebound by the middle of July. Earnings have remained strong, as the travel and leisure sector is on the up and up. However, its shares have been hit hard by broader volatility. Air Canada is now threatening the 52-week low of $16.38 it posted in the early autumn of 2022.

This Montreal-based company delivered its second-quarter (Q2) fiscal 2023 earnings on August 11. Operating revenues surged 36% year over year to $5.42 billion. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed over $1 billion year over year to $1.22 billion. This spurred the company to increase its full-year adjusted EBITDA guidance for 2023.

Shares of this growth stock currently possess a favourable price-to-earnings (P/E) ratio of 13. The Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. Air Canada last posted an RSI of 12, which puts this growth stock well in technically oversold territory.

Here’s why I’m snatching up Stelco stock on the dip

Stelco Holdings (TSX:STLC) is a Hamilton-based company that is engaged in the production and sale of steel products in Canada, the United States, and around the world. This growth stock has also suffered a steady decline since it spiked in the middle of the summer season. Unfortunately, it has plunged to 52-week lows in the second half of September.

In Q2 2023, this company saw revenue drop 19% year over year to $841 million. Meanwhile, operating income plunged 58% to $186 million. Adjusted EBITDA also fell 54% to $215 million. However, adjusted EBITDA did jump over 200% compared to Q1 2023.

This growth stock currently possesses a very favourable P/E ratio of 7.8. Moreover, Stelco offers a quarterly dividend of $0.42 per share. That represents a very solid 4.6% yield.

One more undervalued growth stock I’d snatch up today

MTY Food Group (TSX:MTY) is the third and final growth stock I’d look to snatch up on the dip in late September. This Montreal-based company operates and franchises quick-service, fast-casual, and casual dining restaurants in Canada, the United States, and around the world. Some of its top brands include Yogen Fruz, Country Style, and Taco Time. Its shares have plunged over 10% over the past month.

This company posted normalized EBITDA growth of 57% to $74.6 million in Q2 2023. Moreover, system sales rose to an all-time high of $1.5 billion — up 39% compared to the prior year. MTY Food Group opened 73 locations in Q2 2023 compared to 47 in the same quarter in 2022.

Shares of this growth stock last had a solid P/E ratio of 17. It also possessed an RSI of 17, which puts MTY Food Group well in technically oversold territory at the time of this writing. The stock last paid out a quarterly distribution of $0.25, representing a modest 1.7% yield.

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.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MTY Food Group. The Motley Fool has a disclosure policy.

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