You don’t need to venture into the U.S. markets to take advantage of terrific growth plays. Though there aren’t as many hot and high-growth plays in Canada, I do think some of them represent a better value right now. Undoubtedly, the AI trade is on the minds of most investors. And right now, they seem more than willing to pay a premium price tag, even if it means running the risk of being on the receiving end of the next inevitable stock market correction.
A market correction can happen at any time, and it can hit the biggest near-term bulls the hardest. But not to worry, as market corrections are as natural for a long-term bull market as days with less-than-stellar weather or rain.
You wouldn’t try to time the weather, so you shouldn’t seek to get completely out of stocks before a potential correction. Indeed, January was a great month for stocks, but let’s not kid ourselves! There were a few scary days that had some thinking that the start of a correction was potentially underway. But here we are at new highs for the S&P 500, closing just shy of the 5,000 mark for Thursday’s close.
As the TSX gains traction (with or without a U.S. correction), the following top growth plays, I believe, are worth watching going into February and March 2024:
Fairfax Financial Holdings stock: The Canadian Warren Buffett’s comeback has been massive
Fairfax Financial Holdings (TSX:FFH) is a company that’s flown under the radar of many Canadian investors over the past few years. That is, until the stock exploded higher, causing some to more than double up in a pretty concise timespan.
Indeed, in the depths of 2020, some may have underestimated the abilities of Fairfax’s terrific top boss, Prem Watsa. The man some refer to as the Canadian Warren Buffett.
Is Fairfax stock facing Muddy Waters?
Watsa has proved his doubters wrong, bringing FFH stock out of its slump en route to one of its biggest win streaks ever. Today, the stock is just shy of an all-time high at around $1,200 or so per share after taking a nearly 12% hit on Thursday’s session following a short report issued by Muddy Waters.
Is the single-day dip a buying opportunity for investors? I think it is, even given recent allegations of manipulated asset values.
Of course, more than a grand per share seems like a tad too much to pay on a cost-per-share basis. And with a short on the company’s tail, it may seem wise to stand clear. However, with a 7.4 price-to-earnings (P/E) multiple, it’s more apparent that shares actually remain an impressive value. And for now, I’m siding with Watsa and his team over the shorts.
With value and momentum on the stock’s side, I continue to view it as the growth play to own as Canada’s economy looks to make it past a rough year en route to potentially higher levels. Finally, the 1.44% dividend yield is a very nice bonus!
