Canada’s benchmark stock exchange has been resilient despite the bumpy road for most of 2024. Only the communications sector (-4.1%), out of 11 primary sectors, is in the red at the start of September. Moreover, some individual stocks continue to beat the TSX and buck elevated market volatility.
If you’re looking for high flyers, CES Energy Solutions (TSX:CEU), Héroux-Devtek (TSX:HRX), and KITS Eyecare (TSX:KITS) are logical choices. All three growth stocks show no signs of slowing down and are well-positioned to become big winners this year
Energy
CES Energy, a small-cap stock, outperforms its larger peers in the energy sector. At only $7.62 per share, current investors delight in the 123.2% year-to-date gain on top of the modest 1.6% dividend offer. The $1.8 billion company provides technically advanced consumable chemical solutions to North America’s oil and gas industry.
The record-setting results in Q2 2024 indicate the financial resiliency of CES’ capex-light and asset-light consumable chemicals business model. In the three months ending June 30, 2024, revenue increased 4% to a record $553.2 million versus Q2 2023, while net income jumped 42% year-over-year to $48.1 million.
According to management, the underlying business model generates significant surplus free cash flow (FCF). Strong energy industry fundamentals remain the tailwind for the stock because it supports critical drilling and production activities for oil and natural gas.
Industrial
Héroux-Devtek is a close second to CES Energy in terms of market-beating returns. At $31.35 per share, the industrial stock is up 106.3% year-to-date. Had you invested $15,200 (1,000 shares) at year-end 2023, your money would be almost double or $31,350 today.
The $1.1 billion caters to the aerospace industry, specializing in landing gear, actuation systems, components, and allied services. Despite the inflationary environment, sales have been robust. In Q1 2024, revenue rose 23.7% to $174 million compared to Q1 2023.
In the same quarter, operating and net incomes climbed 159.1% and 216% year-over-year, respectively, to $19.4 million and $12.6 million. Notably, FCF reached $1.2 million from -$20.5 million a year ago. Besides the good quarterly performance, Martin Brassard, President and CEO of Héroux-Devtek, notes the growing civil and defence markets.
Specialty retail
KITS Eyecare flies under the radar but is soaring thus far in 2024. At $11.30 per share (+81.1% year-to-date), the retail stock is up 120.7% from a year ago. The $356.5 million Vancouver-based company is a known vertically integrated eyecare provider. It offers a wide selection of premium eyecare products, such as eyeglasses, sunglasses, progressives, and contact lenses.
The stock’s performance reflects a thriving business. In Q2 2024, revenue increased 26% to a record $37.9 million compared to Q2 2024. KITS reported a $0.2 million net income versus the $1.2 million net loss from a year ago. The glasses business grew more than 41% in the quarter.
Because of strong demand in the last two months and record-breaking sales for the week ending August 31, 2024, KITS expects Q3 revenue to exceed its 32% year-over-year growth rate target.
Big winners
CES Energy Solutions, Héroux-Devtek, and KITS Eyecare have delivered superior returns amid a challenging landscape. There should be no obstacles to outsized gains in 2024 and beyond.
