Investors are likely feeling a little on edge after seeing the recent sell-offs in the markets, and that may have many wondering just what a good stock to invest in is. There are many ways for investors to look for good investments without being overly conservative.
While you could take the safe route and invest in bank and utility stocks, you’ll limit your returns by not considering growth stocks. Below are three stocks that have tremendous growth potential that could be great long-term buys.
Magna International Inc. (TSX:MG)(NYSE:MGA) is at the top of the list because I’m a big believer in automation and self-driving vehicles. When you look at the hype behind Tesla Inc. and its vehicles, it’s easy to see that this is not a fad, and that these advancements are here to stay.
Magna is right in the thick of it when it comes to developing technologies that will be integral in the self-driving revolution. The company’s MAX4 system can achieve a nearly completely automated driving experience, while most “automated” cars on the roads today are several notches below that.
The stock trades at a bargain 11 times its earnings, and when compared against its strong growth, it yields a price-to-earnings-growth (PEG) ratio of 0.91, indicating it is a very good value. However, don’t expect that it will stay this low for long, as the company continues to advance and build on its strong performance.
BlackBerry Ltd. (TSX:BB)(NYSE:BB) makes the list for the same reasons Magna does. The once popular producer of cellphones has reinvented itself, and one way it is doing that is by building operating systems for driverless vehicles. It’s taken time for BlackBerry to build up its beaten-up image, but the company has turned a corner, and it could be a great time to invest while the stock is still nowhere near its peak.
To put into perspective just how far the stock has fallen, consider this: in the past 10 years, the share price has dropped an astounding 84%; however, in the past 12 months the stock has risen more than 55%, as it continues to grow its new business model that focuses on systems and services. BlackBerry trades at 22 times its earnings, and that could be a big bargain given the growth that it could achieve in the long term.
Sierra Wireless, Inc. (TSX:SW)(NASDAQ:SWIR) trades at a significantly higher multiple of earnings than the other two stocks on the list, but it makes up for with its incredible growth prospects.
The Internet of Things industry has a lot of potential, as it connects hardware components to the online world, which is a growing trend that isn’t going anywhere anytime soon. Sierra looks to capitalize on this, and that should translate into stronger top-line figures in the years to come.
In its most recent quarter, Sierra’s sales were up more than 12%, and for the full year the top line was up by a similar amount as well. These are not amazing growth figures by any means, but over the long term we’ll likely see those numbers get much stronger.
Overwhelmed by how many public companies there are to choose from in Canada? Motley Fool Canada Director of Research Iain Butler has you covered. Once a month, Iain and the rest of our team at Stock Advisor Canada reveal their five favourite Canadian stocks for new money now.
Considering they’ve walloped a “stuck in the mud” TSX by 10% over the past 4 years with truly life-changing winners like Shopify (up 236%, more than tripling your money), you’ll probably want to have your front-row seat reserved when our next five “Best Buys Now” are released – exclusively on behalf of Stock Advisor Canada members.
To make sure your name is on the list, just click here now... before the curtain is lifted without you.
Fool contributor David Jagielski has no position in any of the stocks mentioned. David Gardner owns shares of Sierra Wireless and Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns shares of BlackBerry, Sierra Wireless, and Tesla. BlackBerry, Magna, and Tesla are recommendations of Stock Advisor Canada.