Want to Beat the TSX? Buy These 3 Stocks Poised for Monster Long-Term Growth

A sluggish Canadian stock market should drive investors to the health industry and stocks like Jamieson Wellness Inc. (TSX:JWEL).

| More on:
The Motley Fool

The S&P/TSX Index slipped 16 points on April 4. The index is now down 6.4% in 2018. A slew of less-than-stellar economic news also served to increase anxiety among investors. Statistics Canada reported that GDP inched down 0.1% in the month of January, and home sales and prices have been in a dramatic year-over-year slide.

In addition, the blockchain and cannabis mania has come to a screeching halt. This leaves investors on the hunt for growth in a precarious position. Where should they turn? Today we’re going to look at three stocks in the intriguing health sector that should pique the interest of those looking for the possibility of explosive long-term gains.

Zymeworks Inc.

Zymeworks Inc. (TSX:ZYME)(NYSE:ZYME) is a biopharmaceutical company in the clinical stage; the company is focused primarily on cancer treatment. Zymeworks stock rose 3.29% on April 4, surging 50% in 2018 thus far. In its most recent fourth-quarter report, the company announced that ZW49 would be the first product candidate selected for clinical development using the Zymelink platform acquired in 2016.

Its leading product, ZW25, is in phase 1 of clinical trials for breast cancer. Raymond James analysis projected that ZW25 has the potential to compete with Herceptin and Perjeta in the U.S., which brought in billions in revenue in 2017. Zymeworks stock is down 19.8% year over year and could still be a bargain given its long-term promise.

Jamieson Wellness Inc.

Jamieson Wellness Inc. (TSX:JWEL) is a Toronto-based company that specializes in sports nutrition and specialty supplements. Jamieson stock has climbed 2.9% in 2018 as of close on April 4. The company reported a net loss in 2017, but is inching close to profitability for the first time since its public listing. Jamieson showed promise in 2017 as revenue jumped 21.1% to $300.6 million and adjusted EBITDA climbed 31.4% to $61.5 million. Jamieson also offers a solid quarterly dividend of $0.08 per share, thereby representing a 1% dividend yield.

Jamieson projects 2018 revenue to hit between $325 million and $335 million and adjusted diluted earnings per share to reach $0.83 to $0.87. The supplements market is expected to be buoyed by an aging population in the West and its high disposable wealth in the coming decades. According to Grand View Research Inc., the global dietary supplements market is expected to reach $278.4 billion by 2024, representing a compound annual growth rate (CAGR) of about 9.5%.

Cardiome Pharma Corp.

Cardiome Pharma Corp. (TSX:COM)(NASDAQ:COM) is a Vancouver-based specialty pharmaceutical company. Shares of Cardiome rose 4.58% on April 4 and have climbed 48.6% in 2018 so far. However, the stock has plunged 29% year over year.

Selling, general and administrative expenses rose to $10.4 million in the fourth quarter due to an expansion of its workforce in Europe and the launch of Xydalba, which treats Acute Bacterial Skin and Skin Structure Infections, and Zevtera/Mabelio, an antibiotic for the treatment of community and hospital acquired pneumonia. The launch of Xydalba and the recognition of sales revenue from the latter has the potential to return positive cash flow to Cardiome in 2018. It is an attractive speculative buy in April.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned.

More on Investing

Business man on stock market financial trade indicator background.
Tech Stocks

1 Growth Stock Down 50 Percent to Buy Right Now

There are plenty of growth stocks in the market worth considering, but Shopify (TSX:SHOP) looks like one of the best…

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

edit Sale sign, value, discount
Stocks for Beginners

These 3 Growth Stocks Are on Sale and Set to Surge

Some growth stocks are on sale right now that offer massive long-term potential for investors. Here's a trio to consider…

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

Why Canopy Growth Stock Could Double in 2024

Canopy Growth (TSX:WEED) stock saw its share more than double in the last two weeks. So, can it do it…

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »