2 Growth Stocks Simply Perfect for the TFSA Right Now

Get amazing returns with Spin Master Corp. (TSX:TOY) and another quality growth stock, if you can stomach the volatility.

| More on:
The Motley Fool

Buying quality growth stocks can boost the long-term returns of your portfolio tremendously. Right now, these growth stocks are attractively priced, and you can get tax-free capital gains by buying them in your TFSA today.

Grow your portfolio with Biosyent on this correction

Biosyent (TSXV:RX) stock’s meaningful correction of 23% from its 52-week high is a huge bargain. The specialty pharmaceutical company has been very profitable and making excellent use of its assets and capital. It has had returns on assets and returns on equity of +22% and +24%, respectively, every year since 2011. Its recent net margin was about 25%.

Biosyent sources, acquires, or in-licenses innovative pharmaceutical products to sell primarily in Canada. These products are proven safe and effective to improve the lives of patients.

At $8.02 per share as of writing, Biosyent trades at a forward price-to-earnings multiple of about 18.7. The analyst consensus from Thomson Reuters has a mean 12-month target of $11.70 per share on the stock, which represents almost 46% near-term upside potential on the stock.

Management estimates the company will grow at a rate of about 20% in the long run. It has some products with +$25 million in peak penetration expected to launch in 2019 or 2020. So, now’s a perfect time to accumulate the growth stock.

Notably, the stock is reporting its third-quarter results today. So, it may be especially volatile around this time.

stock market volatility

Spin out high returns with Spin Master

Despite having a meaningful correction of +25% from its recent high, Spin Master (TSX:TOY) stock has still more than doubled in the last three years or so, delivering annualized returns of nearly 30%.

The high returns of the children’s entertainment company are supported by its strong returns on assets and returns on equity. Its recent return on asset and return on equity were about 14% and 28%, respectively.

To date, Spin Master has received 103 Toy of the Year nominations, including the seven it received for the 2019 Toy of the Year Awards, and it has had 28 wins across a range of product categories. The toy, game, and licensing winners of the 2019 Toy of the Year Awards will be unveiled by The Toy Association on February 15.

With the co-founders who continue to lead the company, shareholders can count on Spin Master to come out with more popular toys and evergreen global entertainment properties. Management also eyes for fitting acquisitions as a part of its growth strategy.

At $43.38 per share as of writing, Spin Master trades at a forward price-to-earnings multiple of about 18.5. The analyst consensus from Reuters has a mean 12-month target of US$45 (or roughly CAD$59.40 per share) on Spin Master, which represents almost 37% near-term upside potential on the stock.

Investor takeaway

Both Biosyent and Spin Master are compelling growth-stock ideas that should deliver above-average returns. By buying them in your TFSA, you can hold for long-term growth or trade strategically without the hindrance of taxes.

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 Kay Ng owns shares of Biosyent Inc. and Spin Master. The Motley Fool owns shares of Spin Master. Spin Master is a recommendation of Stock Advisor Canada. Biosyent is a recommendation of Hidden Gems Canada.

More on Investing

grow dividends
Dividend Stocks

These 3 Stocks Could Grow (at Least 5X) in the Next Decade if They Repeat History

Three stocks could soar by least five times more if they repeat history with the return of a bull market.

Read more »

analyze data

Brookfield Stock: Deep Value Hiding in Plain Sight as Shares Sink to 52-Week Lows

Brookfield Corp. (TSX:BN) stock seems like a great buy versus Brookfield Asset Management (TSX:BAM) for TSX value investors.

Read more »

Illustration of bull and bear

3 Stocks to Buy if You Think There’s a Bull Market Coming

Are you anticipating a bull market? Here are three stocks to buy!

Read more »

online shopping
Tech Stocks

Is Shopify Stock a Buy in March?

Shopify stock has had a volatile run, but fundamentals are strong, and valuations are much lower after its 71% decline.

Read more »

data analyze research
Tech Stocks

2 Top Stocks to Buy in March 2023

Given their solid financials and high-growth prospects, these two stocks are excellent buys right now.

Read more »

work from home
Dividend Stocks

3 Stocks to Hold for the Next 20 Years

Are you looking for some stocks to hold for 20 years or more? Here are three great options to consider…

Read more »

little girl in pilot costume playing and dreaming of flying over the sky
Dividend Stocks

3 Stocks You’ll Probably Be Able to Pass On to Your Grandkids

Three stocks are ideal holdings for generational wealth builders who will eventually pass these assets to the next generation or…

Read more »

Dividend Stocks

SmartCentres: Is Your Dividend at This REIT Safe?

The interest rate hike has pulled down property prices. Should you be worried about your monthly passive income from this…

Read more »