3 Soaring Stocks That Show Zero Signs of Slowing

These three stocks are soaring today!

| More on:
rising arrow with flames

Source: Getty Images

Investing in soaring stocks on the TSX, particularly those experiencing rapid growth or momentum, can lead to significant returns but also comes with higher risks. Historically, TSX stocks that have experienced a rapid increase in price, often defined as a 50% or more gain within a short period, can continue to outperform in the short term due to momentum. In fact, some studies show an additional average return of 10-15% over the following six months.

However, this momentum can reverse just as quickly, with many soaring stocks facing corrections of 20% or more within a year! As market conditions change or as valuations become overstretched, these returns gain collapse. Thus, while investing in soaring TSX stocks can be highly rewarding, it also requires careful risk management and an understanding of market dynamics.

That’s why today, we’re looking at three soaring stocks that offer just that — gains, but with less likelihood of a collapse. So, let’s get into it.

Canadian Western Bank

Canadian Western Bank (TSX:CWB) has had quite a year, with its stock soaring 52% year to date. This impressive climb is largely due to its strong financial performance, as seen in recent earnings reports. The bank reported solid revenue growth and a significant improvement in its net interest margins, driven by higher interest rates and prudent cost management. CWB’s ability to navigate a challenging economic environment while still delivering robust earnings has caught the eye of investors, leading to this remarkable uptick in its stock price.

Now, is it still a buy? Despite the strong rally, CWB’s valuation remains attractive, with a forward price-to-earnings (P/E) ratio that suggests there’s room for further growth. The bank’s focus on expanding its loan book and diversifying its revenue streams continues to offer potential upside. However, with the stock already up significantly, new investors should approach with a bit of caution. Perhaps waiting for a slight pullback before jumping in. But for those already holding, it’s certainly a name to keep in your portfolio for the long term.

Stelco

Stelco Holdings (TSX:STLC) has been on a roll, rising 31% year to date, and it’s no wonder why. The company’s recent earnings have been a big driver behind this surge. Stelco reported stronger-than-expected revenue and profits thanks to robust demand for steel and efficient cost management. With global infrastructure projects ramping up and supply chains stabilizing, Stelco has been able to capitalize on favourable market conditions. Investors have taken notice of the company’s ability to generate solid cash flow, even in a tough economic environment. This has fuelled even more confidence in its stock.

But is Stelco still a buy after this impressive run? The valuation remains appealing, with a P/E ratio that doesn’t scream overvaluation just yet. Stelco’s continued focus on operational efficiency and its strategic investments in technology position it well for future growth. However, with the stock already up significantly, it might be wise for new investors to consider entering a dip or keeping a close eye on market conditions. For those already invested, holding onto Stelco could still pay off as the steel industry remains in a solid position.

GFL

GFL Environmental (TSX:GFL) has been on a green streak this year as well, climbing 21% year to date. This is largely driven by its strong financial performance and strategic growth moves. The company’s recent earnings report showed solid revenue growth, fuelled by higher waste volumes and successful acquisitions that have expanded its market reach. GFL’s ability to integrate these acquisitions effectively and improve operational efficiencies has impressed investors. This makes it a standout in the waste management sector.

But is GFL still a buy after this green streak? The stock’s valuation is on the higher side, reflecting the market’s confidence in its growth prospects. But it’s not yet at a level that should scare off potential investors. GFL’s ongoing expansion strategy and focus on sustainability initiatives position it well for continued success. If you’re looking for a solid play in the environmental services space, GFL could still offer attractive returns — especially if it keeps executing on its growth plans. Just be mindful of the price you’re paying, as the recent rise has priced in a lot of the good news.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

Piggy bank with word TFSA for tax-free savings accounts.
Stocks for Beginners

2 Top TSX Growth Stocks to Stash in a TFSA for Life

These two growth stocks may not be the top in the last month, but in the last few years, they…

Read more »

people relax on mountain ledge
Dividend Stocks

Invest $10,000 in This Dividend Stock for a Potential $4,781.70 in Total Returns

A dividend stock doesn't have to be risky, or without growth. And in the case of this one, the growth…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Turn a $15,000 TFSA Into $171,000

$15,000 may not seem like a lot, but over time that amount can balloon into serious cash.

Read more »

A worker uses a double monitor computer screen in an office.
Stocks for Beginners

Why I’d Buy Fairfax Financial Stock Even at Today’s Prices

Fairfax stock just keeps edging higher. But is it now too expensive, or can investors just look forward to even…

Read more »

Piggy bank in autumn leaves
Dividend Stocks

A 5.6% Dividend Yield? I’ll be Buying This TSX Stock for Decades!

This Big Six Bank offers a large dividend, growth strategy, and stability. In short, it offers it all!

Read more »

Concept of multiple streams of income
Stocks for Beginners

Lock Up This 9.2% Dividend Yield From a Top Royalty Stock

Royalty stocks have a strong advantage when it comes to creating passive income for investors. But this one has the…

Read more »

concept of real estate evaluation
Dividend Stocks

Buy 1,154 Shares of This Top Dividend Stock for $492.54/Month in Passive Income

This dividend stock can pay out top cash every month, sure, but has even more to look forward to.

Read more »

Hourglass and stock price chart
Dividend Stocks

This 7.1% Dividend Stock Pays Cash Every Month

This dividend stock is a solid choice for investors looking for long-term cash from the healthcare sector, with monthly dividends…

Read more »