The rousing rebound of the TSX from COVID-19 lows mirrors a bull market. Canada’s primary stock market is on a tear since tanking to 11,228.50 on March 16, 2020. Jumping to August 31, 2020, the index finished at 16,514.40, or a climb of 47%. Year to date, the index is down by a mere 3.22%.
Investors should find the landscape exciting, because a lot of stocks are surging. The sector with the most stellar performance thus far is information technology. Based on one-year performance, the TSX Information Tech Capped Index is +44.7%.
If you want to ride on this bull market’s momentum, Real Matters (TSX:REAL) and Absolute Software (TSX:ABT) are excellent choices. Both stocks have visible growth potentials, and their respective businesses will surely flourish in the current market environment.
Dominating the U.S. market
Real Matters had a superb run in 2019 after delivering a total return of 273.33% to investors. This year, the tech stock is soaring again, and shareholders are winning by 114.77% thus far. Had you invested $20,000 in this stock on December 31, 2019, your money would be worth $42,954.55 today.
The low interest rate environment is benefiting the business significantly. This $2.23 billion company engages in real estate property appraisal, title, and closing services. It’s the leading network management services platform for the mortgage and insurance industries.
Real Matters dominates in the U.S. market and partners with 60 of the top 100 lenders. The business is brisk owing to the astronomical rise in mortgage refinancing transactions across the border. In Q3 2020 (quarter ended June 30, 2020), the company reported a 29.2% and 42% increase in top and bottom lines versus Q3 2019, respectively.
Absolute Software is one of Canada’s homegrown success stories in the tech space. The small company that once developed theft recovery software for laptops is now one of the world’s top cybersecurity companies. This $679.59 million company specializes in endpoint security and data risk-management solutions.
Many companies, organizations, and governments need cybersecurity solutions to fend off hackers and cybercriminals. Only recently, governments were under cyberattack. About 5,600 accounts originating from the Canada Revenue Agency (CRA) were among the targets. The CRA had to suspend its online services.
The need for endpoint security defence is growing due to the complexity surrounding enterprise environments. Absolute Software will capitalize on and fill the demand. Christy Wyatt, president and CEO of Absolute Software, confirms that companies are increasing annual security budgets. The Vancouver, Canada-based firm has intelligent solutions for all IT and security teams.
For would-be investors, Absolute Software is trading at $16 per share and offering a 2%. The year-to-date gain is 87.79%, although more explosive growth is on the horizon. Analysts forecast a 12.5% growth in 2020 and 22.2% in 2021. The best is yet to come, as the company is just starting to build momentum.
Market observers keep warning of a developing tech bubble comparable to the dot.com fiasco. However, Real Matters and Absolute Software are not run-of-the-mill tech firms. Both can reward investors with massive gains in the near term.
Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.
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 Christopher Liew has no position in any of the stocks mentioned.