There’s no question that the economy this year has been largely disrupted by the COVID-19 pandemic. You could also make the argument that the world has been forever changed for both individual consumers and corporate businesses.
The pandemic this year has caused lots of volatility in just six months already. The most unsettling part is that no one knows for sure if the worst is yet to come. We saw one of the largest market drops in history, as the S&P/TSX Composite Index dropped by almost 40% in just one month. The market then bounced back by an impressive 35% in two months.
Some businesses won’t be able to survive through the rest of the year. Others will be able to come out of this pandemic with an even larger market share position.
The volatility may continue in the short term, but Foolish investors should be focused on the long-term view. This is why I’ve put together a list of two top long-term stocks to buy in this post-COVID-19 economy.
This tech-giant has been one of the most followed Canadian stocks since going public five years ago, and for good reason. Shopify (TSX:SHOP)(NYSE:SHOP) is now valued at roughly $115 billion. It was briefly the largest company in Canada, but RBC has since reclaimed the number one spot.
Shopify has been steadily growing its product offering into a complete one-stop-shop e-commerce platform. The online selling platform is designed for users to promote, sell, and ship products across the globe.
The sky-high valuation of this company is a result of future expectations surrounding revenue growth. At a price-to-sales ratio of close to 70, there will likely be lots of short-term volatility ahead, as the tech company tries to regain its position as the country’s largest company.
Quarterly sales are continuing to grow in the +40% range and don’t seem to be slowing yet. Shopify is also in a pretty strong position with regards to its balance sheet. The company has more than $2 million in cash on the sidelines and does not own any debt.
Continuing with the trend of technology, this tech stock was also once a darling in the Canadian stock market. The difference from Shopify is that this company’s serious growth days might be behind it.
BlackBerry (TSX:BB)(NYSE:BB) was once a top player in the smartphone industry but has since made a radical change in strategy. The tech company is now involved in the high-margin software market. Cybersecurity and autonomous vehicle software are two of the main industries that BlackBerry is involved in today.
The level of growth that BlackBerry enjoyed over a decade ago might be long gone, but there is still plenty of growth available to capture in the cybersecurity industry.
The entire cybersecurity industry is expected to grow at an average yearly rate of 10% over the next five years. Through BlackBerry’s AI-driven cybersecurity division, Cylance, the company is in a strong position to continue to grow its market share.
On a valuation level, BlackBerry is much cheaper than the tech-giant Shopify. Trading at a price-sales-ratio of just three today, BlackBerry has far lower future expectations of growth in comparison to Shopify.
Foolish bottom line
As we continue to adapt to a post-COVID-19 world, we can develop a clearer view on which companies we believe may not make it past this year, and which companies will continue to grow.
Shopify and BlackBerry are two tech companies that still have lots of runway left. The e-commerce and cybersecurity industries have both recently proven why they are such a vital part of today’s businesses and will likely be around for many more years.
Speaking of top TSX stocks to buy...
Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.
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 Nicholas Dobroruka owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool recommends BlackBerry and BlackBerry.