The economy turned out to be more resilient in 2023 than many expected. This significantly lifted several growth stocks, despite geopolitical concerns and an elevated interest rate environment. While the economy remains resilient, the anticipation of potential rate cuts may serve as a catalyst, propelling Canadian stocks higher.
So, if you plan to invest in growth stocks this week, consider buying the following four stocks with solid fundamentals and the potential to deliver stellar gains.
goeasy
investors planning to invest in growth stocks could consider buying goeasy (TSX:GSY) stock this week. Its revenue and earnings per share sport a five-year compound annual growth rate (CAGR) of 19.6% and 31.9%, respectively. Thanks to this notable growth rate, goeasy stock has outperformed the TSX and gained about 398% in five years. At the same time, this subprime lender enhanced its shareholders’ value via higher dividend payments.
The momentum in its business will likely be sustained in the coming years due to the growing loan book, steady credit performance, and focus on improving operating efficiency. Further, goeasy stock is trading at a forward price-to-earnings multiple of 9.5, which appears attractive considering its double-digit earnings growth rate and lucrative yield. Moreover, its valuation multiple is lower than the historical average, providing a solid entry point.
Aritzia
Aritzia (TSX:ATZ) stock underperformed the broader markets over the past year due to the moderation in its growth rate. However, this correction presents a solid opportunity to buy this growth stock at a discounted valuation. Furthermore, Aritzia’s growth will likely reaccelerate, as the company focuses on creating and introducing new styles.
Moreover, the company continues to open new boutiques in high-growth markets, which is positive. Aritzia’s management expects the company’s top line to grow at a CAGR of 15-17% through fiscal 2027. While its top line is forecasted to grow at a double-digit rate, Aritzia’s focus on cost control, opening its new distribution centre, and improved pricing will cushion its bottom line and drive its stock.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) stock offers high growth, low risk, and steady income. The retailer has consistently performed well, reflected through the outperformance of its stock over the past several years. The convenience store operator’s EBITDA (earnings before of interest, tax, depreciation, and amortization), net earnings, and free cash flows sport a 10-year CAGR of 15.4%, 18.4%, and 14.5%, respectively. During the same period, ATD stock appreciated about 520% in value.
Looking ahead, the company’s extensive store base, focus on expanding private label offerings, and cost-reduction measures will drive its top and bottom lines at a solid pace. Moreover, its strategic acquisitions will accelerate its growth rate and support the uptrend in its stock.
WELL Health
WELL Health Technologies (TSX:WELL) is the final stock on this list. This digital healthcare company is growing rapidly. However, its valuation is near an all-time low, which makes it too cheap to ignore near the current levels. The company has consistently delivered record revenues for 19 quarters, reflecting its ability to drive omnichannel patient visits. Moreover, it is profitable, which supports my bull case.
While this high-growth company expects to exceed $900 million in annual revenue by 2024, WELL Health stock is trading at an enterprise value to sales multiple of 1.5. Overall, Well Health’s solid organic growth, accretive acquisitions, investments in artificial intelligence, new product launches, and low valuation make it a compelling investment.
