It was a year of redemption for many growth investors in 2023. The Canadian stock market as a whole continues to trade below all-time highs, but many individual stocks sky-rocketed to new highs last year. That being said, there are still deals to be had on the TSX for those who are willing to be patient.
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Loading up on growth stocks in 2023
When it comes to searching for growth stocks, Canadian investors have a variety of companies to choose from.
For those in search of dependable returns, there are the market-beating stalwarts, like Constellation Software (TSX:CSU). On the other end of the spectrum are growth stocks like WELL Health Technologies (TSX:WELL). Much smaller from a market cap perspective, which can provide investors with the possibility of earning multi-bagger returns. Of course, though, the risk with companies like WELL Health Technologies is far higher than with a consistent market beater like Constellation Software.
If you’re looking to add some long-term growth potential to your portfolio this year, these are two companies that should be on your radar.
Growth stock #1: Constellation Software
There aren’t many stocks on the TSX that can compete with Constellation Software’s track record of growth. Even as the company nears an $80 billion market cap, making it one of the largest Canadian companies around, it still manages to easily outpace the Canadian stock market’s returns.
Over the past five years, the tech stock has returned just shy of 250%. In comparison, the S&P/TSX Composite Index is barely up 30%, excluding dividends. And the further you go back in time, the higher the returns have been for Constellation Software.
The next 10 years may not be as growth-filled as the last 10 for Constellation Software. But by no means at all am I expecting the tech sock to begin lagging behind the market’s returns anytime soon.
At more than $3,000 a share and trading at just about all-time highs, it may not seem like the most opportunistic time to be investing in Constellation Software. If you’re waiting for shares to go on sale, though, you may be waiting a while.
Growth stock #2: WELL Health Technologies
Now valued at a market cap below $1 billion, WELL Health Technologies is a vastly different stock than Constellation Software. The telehealth company might not have a long-standing track record of returns, but it does offer investors plenty of long-term growth potential.
Shareholders of the telehealth stock have been on a wild ride over the past couple of years due largely to the pandemic. Demand for virtual health care surged in the early days of COVID-19, which resulted in huge gains in a very short period for WELL Health. The stock managed to end 2020 up a staggering 400%.
After peaking in early 2021, shares have since been on the decline. WELL Health Technologies is now trading more than 50% below all-time highs. However, shares are up close to 40% since the beginning of 2023.
Predicting what the next decade will look like for WELL Health Technologies is far harder than predicting how Constellation Software will fare. But if you’re in search of multi-bagger growth potential, WELL Health is a prime candidate to be loading up on today, especially at these discounted prices.
