The stock market could remain choppy for the rest of 2020. However, young investors with a long-term mindset can make a fortune by buying these three TSX stocks now.
Kinaxis
Kinaxis (TSX:KXS) has a history of making investors rich. The stock has risen about 658% in five years. Meanwhile, it has more than doubled year to date. Investors should note that the explosive growth in Kinaxis stock is not exaggerated and is due to the company’s strong operational performance and the enormous scope for future growth.
While investors could see occasional small pullbacks, there are good reasons why Kinaxis stock could continue to rise further. Kinaxis’s supply chain management platform is in high demand, which is likely to sustain in the coming years.
The company’s predictable and recurring revenue base is growing quickly thanks to its ability to acquire new customers and retaining the existing ones.
In the most recent quarter, the company reported an order backlog of US$344.9 million, up 47% year over year. The stellar growth in backlog provides a strong underpinning for growth in 2020 and beyond.
Kinaxis is also focusing on acquisitions to expand its product suite and accelerate its growth further. Recently, it announced the acquisition of Rubikloud, which helps consumer companies to plan their pricing and promotions and forecast demand.
The software company’s strong organic growth and focus on acquisitions indicate that Kinaxis should continue to make money for its investors.
Cargojet
Cargojet (TSX:CJT) may not be a household name, but its stock has been a consistent performer, generating an enormous amount of wealth for its investors. Its stock is up about 469% in five years and has grown by 56% year to date.
Cargojet is flying high while the rest of the aviation industry remains grounded. The company benefits from the consistent demand for domestic and international air cargo. Moreover, the pandemic has accelerated its growth further.
Even if the coronavirus-led demand subsides, Cargojet should continue to gain from the addition of new customers and growth from the existing customer base. The company continues to add aircraft and expand its network capacity, which should support future growth. Besides, its cost control measures should continue to support margins and maximize free cash flows.
Enghouse Systems
Shares of Enghouse Systems (TSX:ENGH) are up over 55% this year. Moreover, the stock has generated about 203% growth in five years. Enghouse is performing exceptionally well on the financial front, with its top-line witnessing an acceleration in growth.
The software company’s offerings facilitate work from home and customer interactions, which continues to witness steady demand. The pandemic has led to a spike in demand for Enghouse’s software and services as people are working remotely. Moreover, I believe the demand to sustain in the coming years as remote work will be a common trend.
Enghouse should also benefit from its strong appetite for acquisitions, which expands its product range and accelerates its growth.
Enghouse’s low yield of 0.7% might not have caught investors’ attention. However, the company has consistently raised its dividends over the past several years.
Since 2015, Enghouse’s dividends have grown at a compound annual growth rate of 16%, and the company remains well positioned to boost it further in the coming years.
