Growth stocks are very exciting companies to hold in your portfolio. Unfortunately, many of these companies seem to feature very expensive stock prices. For example, Constellation Software trades above $1500 per share and Amazon over $3200 USD.
While it is understood that companies should not be judged by their prices, rather by valuation and prospects, it is still unappealing for smaller investors to pour so much money into one company at one time. Luckily, if you look in the right places, you will be able to find excellent growth companies that do not have such expensive prices.
The health care industry is changing rapidly
Investors with smaller amounts of capital should consider an investment in WELL Health Technologies (TSX:WELL). The company is focused on improving Canadian health care by providing disruptive services and products.
WELL Health has primarily grown via acquisitions. As of its latest earnings report, the company operates wholly owned 19 clinics. In addition to its health clinics, WELL owns a portfolio of digital assets. These include its electronic medical records software and a digital health app marketplace for EMR users.
WELL Health’s rise to prominence over the past year has been very popular among Canadian investors. For those that are unfamiliar, WELL Health was a very promising company during its time being listed on the TSX Venture Exchange (TSXV). In 2018 and 2019, the company was included in the TSX Venture 50, a list of the 50 best performers on the exchange. In early 2020, WELL Health graduated from the TSXV to the TSX.
Since going public on the larger Canadian exchange, WELL has seen its stock skyrocket. Year-to-date, WELL stock has gained nearly 450% as of this writing. That increase in stock price places the company among the leaders in the Canadian market over that time period.
Although its stock price has increased nearly 500% this year, WELL Health still trades below $10. More important, the company has only a $1.21 billion market cap, which indicates that it may still have a long growth runway ahead.
Digitization is inevitable
Another company that investors can grab at an inexpensive price is Docebo (TSX:DCBO). I have been covering this company since early June, and I remain as bullish as ever. The company provides enterprises with an e-learning platform that uses the company’s proprietary artificial intelligence software. Using this platform, training managers can more easily create, administer, and monitor employee training programs.
Docebo is a company that checks off many boxes in my investment checklist. The company features a large amount of insider ownership, indicating that its leadership is willing to be rewarded according to the company’s performance. Docebo also has a very high amount of recurring revenue, which speaks to the sustainability of its revenue sources.
Finally, as the subheader suggests, digitization is inevitable. Companies are beginning to adapt their software to suit modern environments. Docebo is a leader in its industry and should experience tremendous growth moving forward.
The company went public in late 2019. Since then, its trajectory has been mostly upward as investors have realized the tremendous opportunity that presents itself with this company. Year to date, Docebo stock has returned over 200% to investors. Currently at a valuation of about $1.57 billion, Docebo can still potentially provide 10 times returns form here.
Foolish takeaway
Although growth stocks can be more expensive than value stocks, there are definitely options available for investors that have smaller amounts of capital. WELL Health currently trades below $10 and Docebo just over $50, as of this writing. In both cases, WELL Health and Docebo trade under a market cap of $1.6 billion. If these companies continue to execute as well as they have so far, investors may be generously rewarded in the future.
