Last month, I’d discussed why Canadians should look to target stocks that will achieve big growth over the long term. On its face, this seems like a no brainer. However, hunting for these stocks can be challenging. Today, I want to focus on three game-changing stocks that could fuel growth in your Tax-Free Savings Account (TFSA) for years to come. Let’s dive in.
TFSA investors: This automation stock has nice potential
The rise of automation will be a transformative trend in our society. Like other industrial and technological advances, this will occur in phases. ATS Automation (TSX:ATA) is positioned to be a big player in one of the first phases: the proliferation of factory automation. It is a perfect addition to a TFSA for the long haul.
Shares of ATS Automation have dropped 16% in 2020 as of close on September 15. The stock is down 11% month over month. In Q1 FY 2021, the company saw revenues decline 4% to $324.9 million. Order Bookings dropped 23% from the prior year to $325 million. ATS Automation took a step back due to mass closures, travel restrictions, and other COVID-19-related hindrances.
ATS Automation stock last had a price-to-earnings ratio of 35 and a price-to-book value of 1.9. This puts the stock in favourable value territory relative to industry peers.
One stock that is surging as the focus turns to personal health
The COVID-19 pandemic has thrust a global spotlight on personal well-being. When Jamieson Wellness (TSX:JWEL) launched on the TSX, its leadership was already banking on rising demand due to an aging population. The COVID-19 pandemic has spurred demand for nutrition and supplements products around the world. This stock is perfect for a TFSA.
Jamieson stock has climbed 50% in 2020. In Q2 2020, the company achieved revenue growth of 15.6% and adjusted EBITDA growth of 15.8%. The company said that domestic sales increased due to heightened demand for immunity and general health supplements. Jamieson also reported strong sales growth in its international markets.
According to Grand View Research, the global natural health products market is projected to reach $25.11 billion by 2025. Moreover, the fusion of popular products like CBD with the natural health industry should provide a bigger boost on the domestic front going forward. TFSA investors should be eager for exposure to this space.
A morbid stock for TFSA investors to hold for decades
Park Lawn provides deathcare products and services in Canada and the United States. Its shares have climbed 22% over the past three months. However, the stock is still down 5.3% so far this year.
Like Jamieson, Park Lawn will also see increased activity due to the aging population in North America. Park Lawn’s solid balance sheet has allowed it to be aggressive in its acquisition strategy across the continent. In Q2 2020, Park Lawn reported revenue of $84 million compared to $58 million in the previous year. Meanwhile, adjusted EBITDA has increased to $36 million in the year-to-date period — up from $24 million in 2019.
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 Ambrose O'Callaghan has no position in any of the stocks mentioned.