There are few TSX stocks that will remain strong even if the markets take an ugly turn from here. Canadian broader markets have soared more than 40% in the last three months. And it seems unlikely that stocks could maintain the same momentum amid the rising economic uncertainties. Let’s see which TSX stocks are well placed in the second half of the year and can outperform peers.
A top TSX tech stock with strong growth prospects
Lightspeed (TSX: LSPD) is one of my favourite stocks in the Canadian tech space for several reasons. A $3 billion company is rapidly growing with its cutting-edge point-of-sale technology. It powered a gross transaction volume of $22.3 billion in the last 12 months for customers in over 100 countries.
Business activities will gradually resume as economies ease lockdown restrictions, and Lightspeed could see higher demand. Its diverse geographical presence will likely drive relatively faster recovery from the pandemic.
Lightspeed mainly stands tall among peers due to its cloud-based, one-stop-shop platform, which is more appealing to customers. Lightspeed has seen superior growth at its top line, and analysts continue to remain positive for the next few quarters.
Top tech stock LSPD is currently trading at $37.2, close to its four-month high. Despite the recent rally, the stock is trading at an attractive valuation. Certainly, Lightspeed stock is a risky bet right now. But with a large addressable market, the growth prospects are much more attractive against the risk.
A space stock to hold for a decade and more
The role of private players has notably increased in the space technology area in the last few years. Maxar Technologies (TSX: MAXR)(NYSE: MAXR) is a company that mainly operates in imagery and data analysis domain, oone of the fastest-growing areas in the broad space technology spectrum.
Maxar Technologies generates 60% of its revenues from the geo-spatial data and analysis vertical. The rest comes from the Space Infrastructure vertical, which involves making observation satellites and satellite servicing vehicles.
A $1.5 billion company Maxar is currently working with NASA on several projects, which will likely bode well for its top-line growth.
Higher government spending and corporate investments in this space could drive the sector substantially higher. Due to its attractive growth prospects, analysts expect space technology to become a multi-trillion-dollar industry in the next few decades.
Maxar stock has surged almost 80% in the last 12 months. Despite the rally, the stock looks attractively valued at the moment. However, investors should note that Maxar stock will likely continue to trade highly volatile, driven by the sector’s uncertainties.
Attractive growth and dividends
Premium Brands Holdings (TSX: PBH) is a $3 billion company that makes specialty food products and operates a premium food-distribution business. What I specifically like about PBH is its superior growth and a broad range of specialty food products.
It generates almost two-thirds of its sales from Canada, while the rest comes from the U.S. It owns and operates popular brands like Audrey’s, Conte Foods, Deli Chef, Freybe, Expresco, Ready Seafood, etc.
The company has managed to increase its revenues by 24% compounded annually in the last 10 years. The management is aiming a superior growth for the next few years despite an expected downturn due to COVID-19.
TSX stock Premium Brands looks a tad expensive from the valuation standpoint. However, its strong dividend profile and an above-average growth justify the premium valuation.
