Young Investors: Turn a $27K TFSA Into a $1.12 Million Retirement Hoard

Tired of weak results? This trio of small-cap stocks, including IAMGOLD (TSX:IMG)(NYSE:IAG), might provide the big upside you’re looking for.

| More on:
Top view of mixed race business team sitting at the table at loft office and working. Woman manager brings the document

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Hello, Fools. I’m back to highlight three attractive small-cap stocks. As a reminder, I do this because companies with a market cap under $2 billion have much more room to grow than larger more established “blue chips” and are largely ignored by professional analysts.

If you want to turn an average $27K TFSA into a million bucks in 20 years, you’ll need an annual return of at least 20% to do it. So while small-cap stocks tend to be on the volatile side, the upside return potential is often well worth the risk.

Without further ado, let’s get to it.

Walk the wire

Leading off our list is communications technologist Sierra Wireless (TSX:SW)(Nasdaq:SWIR), which currently sports a market cap of about $605 million.

Sierra is widely considered a leading play on the “Internet of Things” (IoT), but recent losses have weighed on the stock. In the most recent quarter, Sierra posted a loss of $0.9 million as revenue dropped 7% to $173.8 million.

On the bright side, IoT Solutions revenue improved 5.4% while the company’s cash hoard stood a $74.1 million at quarter’s end, suggesting that Sierra remains relatively healthy.

“We are making good progress driving improved efficiency throughout our operations to accelerate our transformation into a leading global IoT solutions provider,” said President and CEO Kent Thexton.

Sierra shares are down 21% over the past year.

For sale

With a market cap of $1.6 billion, gold company IAMGOLD (TSX:IMG)(NYSE:IAG) is next on our list.

The company has underperformed due to issues at its key Westwood mine, but now might be a good opportunity to pounce. While Q1 sales fell 19% year-over-year, management maintained its full-year production guidance of 810K-870K attributable ounces and all-in sustaining costs of $1,030-$1,080 per ounce sold.

Moreover, rumors continue to swirl that management is exploring a potential sale of all or part of the company, providing some juicy short-term upside to the shares.

“Despite a challenging first quarter, we are driving towards achieving a self-funded, self-sustaining operating model,” said President and CEO Steve Letwin.

IAMGOLD shares are down a significant 52% over the past year.

Heavy metal

Rounding out our list is steel company Russel Metals (TSX:RUS), which currently has a market cap of $1.3 billion.

The stock has been pressured over the past year on trade-related uncertainty with the U.S., but things are starting to look brighter for Russel.

First, steel tariffs have been lifted. And second, operations seem to be humming. In Q1, EPS of $0.55 topped expectations by $0.11, revenue increased 10.6% to $1.03 billion, and free cash flow clocked in at $58 million.

“We are pleased with the solid results achieved during the first quarter of 2019 and want to commend our team for their efforts in a tightening market,” said President and CEO John Reid.

Russel shares are off 24% over the past year.

The bottom line

There you have it, Fools: three attractive mighty mouse stocks worth checking out.

As always, they aren’t formal recommendations. Instead, view them as a starting point for more research. Small-caps carry more risk than the average stock on the TSX Index, so extra caution is required.

Fool on.

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 Brian Pacampara owns no position in any of the companies mentioned. David Gardner owns shares of Sierra Wireless. The Motley Fool owns shares of Sierra Wireless.

More on Investing

Payday ringed on a calendar
Dividend Stocks

How to Convert $500 Monthly Investment Into $200 Monthly Income

If you want the stock market to give you regular monthly income, you have to invest in the stock market…

Read more »

falling red arrow and lifting

RRSP Investors: 3 Dividend Stocks to Buy on the Dip

Inflation has delayed retirement for Canadians. RRSP investors should buy cheap dividend stocks like Fortis Inc. (TSX:FTS)(NYSE:FTS).

Read more »

Growth from coins
Tech Stocks

Got $1,000? Buy These 3 Under-$20 Growth Stocks to Earn Higher Returns

These under-$20 growth stocks can deliver solid returns in the long run.

Read more »

worry concern
Dividend Stocks

3 Ultra-Safe Dividend Stocks for Jittery Investors

Motley Fool investors nervous about the market downturn should consider these ultra-safe dividend stocks that keep paying passive income no…

Read more »

Economic Turbulence

The TSX’s 1st Crypto ETF Lost $500 Million in 1 Day

The TSX’s first crypto ETF lost $500 million is one day and is down nearly 58% year to date.

Read more »

House Key And Keychain On Wooden Table
Dividend Stocks

Is the Real Estate Boom Finally at an End?

It might be hard to believe, but Canada’s decades-long housing boom might be at an end.

Read more »

stock analysis

RRSP Investors: 2 Oversold TSX Financial Stocks to Buy for Total Returns

Top TSX financial stocks look oversold right now for RRSP investors seeking attractive dividends and total returns.

Read more »


Got $500? 3 Undervalued TSX Stocks for Superior Returns

These undervalued stocks have strong potential for growth and will likely generate superior returns in the long term.

Read more »