For self-guided investors, it’s easy to put the TSX Index to shame on a somewhat consistent basis. The Canadian index is chock-full of underperforming energy and materials stocks, and it’s heavily weighted in sectors that have essentially been stuck in a recessionary environment for years.
With the coronavirus-induced recession that we currently find ourselves in, there are a class of growth stocks buried in the TSX that have been bucking the trend of late.
Such growth stocks have been using their technological advantages to help their clientele better weather the coronavirus typhoon. Such companies are doing their part to help dampen the economic damage caused by coronavirus disease 2019 (COVID-19) that young Canadian investors should seek to buy.
These companies have demonstrated resilience in the face of turmoil. While the shares are expensive, they must be bought on any meaningful broader market pullbacks that we’re likely to be hit with over the coming weeks and months, as the plague of COVID-19-induced uncertainty continues paving the way for record levels of market volatility.
Docebo: One of the hottest TSX growth stocks
Docebo (TSX:DCBO) is a little-known e-learning software developer that’s been hot of late, with shares more than tripling (the stock’s up 230% off those March lows) amid the COVID-19-induced increase in demand for its work-from-home (WFH) enabling learning platform.
The WFH trend is likely to stick around, as many work forces opt to ditch the office upon discovering how productive people can be from the comfort of their own homes, with the tiring daily commute taken out of the equation. Once the pandemic passes, I don’t see Docebo shares tanking in a mass rush to the office.
Heck, customers that Docebo wins over amid this pandemic are likely to stick around for life and will be targets for upselling, as the company continues working on innovative AI-leveraging products that stand to make its offering far better than alternative products available in the learning management system space.
While it’s not surprising that Docebo stock is ridiculously expensive after tripling over a few months, I still think the white-hot growth gem is worth nibbling on here and on any dips.
Lightspeed POS: Recovering at the speed of light
The devastating effects of COVID-19-induced shutdowns profoundly impacted Lightspeed POS (TSX:LSPD)’s client base. Lightspeed serves a considerable amount of restaurants, retailers, and other firms in the direct crosshairs of the coronavirus.
This overexposure to the most vulnerable of firms caused Lightspeed stock to crash violently, with shares essentially getting slashed in half twice on the February-March market crash.
I noted in many prior pieces that Lightspeed stock had no business falling as hard as it did, even with its exposure to vulnerable small- and medium-sized businesses (SMBs) that were getting hurt by COVID-19.
To the affected (prospective) clients, Lightspeed was seen as a way to get through the tough times, and many firms embraced Lightspeed’s wide range of promising platforms to salvage business in the realm of the digital.
While Lightspeed stock more than doubled, it’s still below all-time highs and is a great buy for growth-savvy investors.
Kinaxis: A resilient growth stock
Supply chains worldwide are in a complete mess right now amid COVID-19-induced disruptions. The profound disruption has improved the need for supply chain management software such as those offered by Kinaxis (TSX:KXS).
In many prior pieces, I noted that Kinaxis had the tools to tame the complicated beast that is the supply chain. In these highly uncertain times, scenario simulations are surging, and as firms scramble to balance supply with demand, Kinaxis is going to continue to experience unprecedented pandemic tailwinds.
Nobody knows how long the pandemic will last. The longer it goes on, the longer uncertainty will prevail — and the higher the need for Kinaxis’s platform that can help mitigate the risks and challenges that come with the supply chain.
I’ve been pounding the table on Kinaxis in the past, and I’m continuing to do so despite the recent run-up and the froth that’s formed.
While the valuation is a tad rich, it can’t hurt to get a tiny bit of skin in the game, as you look to scale into a position over time.