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New Year Investing: Top 3 TSX Stocks to Own in 2021

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Canadians and individuals all over the world will be happy to wave goodbye to a brutal 2020. The lives of much of the global populace were swallowed up by a pandemic that devastated countries on a social, political, and economic level. Vaccines have many hopeful that 2021 will be a different story. Today, I want to look at three top TSX stocks that investors should target ahead of the new year.

Kinaxis: Why this AI-focused TSX stock needs to be in your portfolio in 2021

When 2020 began, I’d suggested that Kinaxis (TSX:KXS) was one of the top stocks that could make a fortune for opportune investors. Shares of this Ottawa-based technology company have climbed 76% in 2020 as of close on December 23. However, this TSX stock has retreated marginally over the past three months.

Bargain hunting in this red-hot market is a fool’s errand. Kinaxis may not be a value pick, but it is trading well off its 52-week high. Moreover, it holds huge potential going forward. The market for its supply chain and operations planning software is growing and has already attracted top firms like Ford, Unilever, and Toyota Motors.

Canadians looking for exposure to artificial intelligence (AI) in the 2020s have another reason to snag this TSX stock. The company has moved into AI-development in order to bolster its revolutionary supply chain software product.

A TSX newcomer that can erupt this decade

While Shopify has been impossible to ignore since its TSX debut in 2015, I have my eyes on another promising stock that just launched its IPO. Nuvei (TSX:NVEI) was officially listed on the TSX in September. The company provides payment technology solutions to merchants and partners around the world. Its shares have climbed 51% over the past three months.

Recent technology IPOs that have made fortunes include Shopify and Kinaxis. Nuvei has a shot to be a heavy hitter. In the third quarter of 2020, Nuvei posted total volume growth of 62% to $11.5 billion. Adjusted net income soared to $16.5 million compared to $2.2 million in the previous year. This TSX stock has huge growth potential in the years ahead. Canadian investors may look back at its early days and lament that they didn’t jump on its current price.

Magna’s new deal makes it a must-own TSX stock in the new year

Magna International (TSX:MG)(NYSE:MGA) is the final TSX stock I want to target before we enter 2021. This company is a Canadian giant and the largest automobile parts manufacturer in North America. Its stock surged 9% on December 23 after it announced a joint venture with LG Electronics to build components for electric cars. This demonstrates Magna’s commitment to the future and makes it a strong target for those who want exposure to the electric vehicle market.

This TSX stock has now increased 33% in 2020. In Q3 2020 it continued to battle challenges due to the pandemic but did manage to boost its guidance for total sales and adjusted EBIT margin. Moreover, this TSX stock offers a quarterly dividend of $0.40 per share. That represents a 2.2% yield.

Here are five more stocks I'd target in the New Year...

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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. David Gardner owns shares of Ford. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool recommends KINAXIS INC and Magna Int’l.

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