Buying shares of the Canadian companies that are unaffected or are gaining from the pandemic could make you a fast fortune. You can bet on clinical-stage biotech companies that can give huge returns overnight. However, all these biotech companies have high risk.
If you’re one of those investors who want to gain big from the rising coronavirus cases but don’t want to take high risk, here are three coronavirus stocks that I believe could give huge returns with moderate risk.
Enghouse Systems (TSX:ENGH) has been one of the biggest beneficiaries of the pandemic. As the rising coronavirus cases have caused people to work and manage clients remotely, the demand for Enghouse’s products and services has surged.
The company provides software and solutions that facilitate remote work, customer interaction, and communications. In the most recent quarter, its top line surged 58% year over year, reflecting strong sales of Vidyo and other solutions that facilitate remote work. It is witnessing steady renewables and getting new orders with record cash collections.
While its top-line growth accelerates, its margins are likely to benefit from operational efficiencies, cost-savings, and lower marketing expenses.
Investors should note that Enghouse has been consistently performing well over the past several years, and the pandemic has accelerated its growth rate further. The company could witness high double-digit sales and earnings growth in the coming years, which is likely to lead to higher returns.
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If you’ve missed the opportunity to buy Shopify stock in its early stages, consider buying the shares of the commerce-enabling company Lightspeed POS (TSX:LSPD). The company’s platform is in high demand, as an increased number of small- and medium-sized businesses are moving online.
Lightspeed POS helps businesses to manage their payments, supply chain, data analytics, and e-commerce. The company has been performing pretty well with gross transaction volume increasing at a compound annual growth rate of 46% since 2017. Higher gross transaction volumes have led to stellar growth in its top line, which has increased at an average annual growth rate of 41% in the last three years.
The company, through its quick e-commerce on-boarding platform, innovation, and expanded product suite, remains well positioned to capitalize on the growing demand and is available at one-fourth of Shopify’s valuation. Shares of Lightspeed POS are trading at the next 12-month EV-to-sales ratio of 10.3 compared to Shopify’s 40.6.
The rising coronavirus infection is leading to a surge in online activities, and Lightspeed POS stock could gain big from the rapid shift.
Shares of Cargojet (TSX:CJT) have emerged unscathed from the coronavirus-led market crash and is among the top-performing TSX stocks so far this year. The air cargo company continues to witness a steady demand that has pushed its stock higher over the past several years. Its stock has surged about 486% in five years.
The growing demand from e-commerce and pharmaceutical companies, efficient fleet management, network capacity expansion, retention of key customers, and the addition of new ones could help Cargojet stock to rise 10 times in 10 years.
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 Sneha Nahata has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends CARGOJET INC., Shopify, and Shopify. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends Enghouse Systems Ltd.