The S&P/TSX Composite Index has stormed back into form during the summer, but it is still trading off its pre-pandemic highs. Stocks are broadly pricey right now, but that does not mean investors should avoid scooping up equities that can pay off big time in the future. Today, I want to look at three TSX stocks that have the potential to turn a $5,000 investment into $50,000 before the end of this decade. Let’s jump in!
Why this TSX stock can still make investors rich
Shopify (TSX:SHOP)(NYSE:SHOP) has been a superstar TSX stock since its IPO in 2015. Shares were hit hard by the pullback in March but rebounded with a vengeance in the second half of spring. Its stock has soared 167% in 2020 as of close on August 27. In late April, I’d recommended that investors continue to ride its momentum ahead of its Q1 2020 earnings release.
The COVID-19 pandemic has been a huge driver for the e-commerce space. Consumers all over the world have migrated to more digital channels as brick-and-mortar stores have been forced to close. In the second quarter of 2020, Shopify achieved revenue growth of 97% to $714.3 million. Merchant Solutions revenue climbed 148% year-over-year to $517.9 million.
Shares of Shopify fell below the $460 mark in the middle of March. A $2,000 investment in Shopify at $460 per share would net investors about four shares of the tech star. That investment would already be worth over $5,500 today.
Healthcare is my number one target right now
When this year started, I’d suggested that investors should pour into the healthcare space. Apart from technology, there are few sectors that offer its explosive growth potential. In late July, I’d suggested that Andlauer Healthcare (TSX:AND) could turn $6,000 into $60,000 in the years ahead. This TSX stock has increased 125% in 2020 so far.
This company provides a platform of customized third-party logistics and specialized transportation solutions for the healthcare sector. Another top tech stock, Kinaxis, has demonstrated the explosiveness of the supply chain management software space. Link that with healthcare, and you have an electric mix. In Q2 2020, Andlauer saw EBITDA increase 1.2% from the prior year to $18 million.
Shares of Andlauer last had a price-to-earnings ratio of 37, putting this TSX stock in attractive value territory relative to industry peers. Shares of Andlauer hovered around the $20 mark to kick off 2020. A $1,500 investment would have netted roughly 75 shares of the stock to start the year. This investment would be worth over $3,300 as of close on August 27.
Don’t sleep on this sneaky TSX stock
Maple Leaf Foods makes my list today due to its bet on plant-based alternatives. Beyond Meat erupted out of the gate on the back of enthusiasm for this industry. Maple Leaf acquired Lightlife Foods, which produces plant-based protein alternatives, back in 2017. This TSX stock has increased 15% so far this year.
While investors may scoff at Maple Leaf’s potential in comparison to the previous two stocks, I’m bullish on this Canadian staple. In Q2 2020, the company’s Plant Protein Group reported sales growth of 41.4% on higher volumes across its portfolio. Its stock last had a favourable P/B value of 1.9. Moreover, it offers a quarterly dividend of $0.16 per share. This represents a 2.1% yield.
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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Andlauer Healthcare Group Inc., Beyond Meat, Inc., Shopify, and Shopify. The Motley Fool recommends KINAXIS INC.