Top TSX stocks witnessed strong buying over the past several months, leading to a massive recovery rally from the lows of March 2020. Despite the significant growth in most Canadian stocks and stretched valuations, a few could continue to deliver strong returns in 2021 and over the next decade.
I believe vaccine distribution, recovery in demand, and economic expansion are likely to support the uptrend in these stocks. Moreover, positive secular tailwinds are likely to act as a strong growth catalyst. So, if you’ve got $5,000 to invest, consider buying these stocks right now.
Cargojet (TSX:CJT) stock has consistently delivered impressive returns and has multiplied investors’ wealth. It has delivered a stellar return of about 2,465% in the last 10 years. Further, it’s up about 70% in one year. Canada’s largest air cargo company recently delivered impressive financial results, while its stock has witnessed a healthy pullback of about 18% in a month, presenting an excellent buying opportunity for long-term investors.
Cargojet’s revenues climbed 37% in 2020, while gross margin more than doubled. Its adjusted EBITDA jumped 87%, while adjusted free cash flows soared 307% in 2020. An economic reopening could lead to normalization in demand in 2021. However, Cargojet’s strong average cargo revenue per operating day, expanding fleet size, strong national network, and higher e-commerce-related volumes make me bullish on its stock.
Shopify (TSX:SHOP)(NYSE:SHOP) continues to benefit from strong demand for its products and services amid the structural shift in the selling models towards the omnichannel platform. The company delivered stellar strong financials for 2020, as demand accelerated amid the pandemic.
While Shopify expects the demand to normalize in 2021, the ongoing shift towards e-commerce presents a multi-year growth opportunity. Further, its growing scale, increasing international footprint, multiple sales channel, expansion of fulfillment network, and strong growth opportunities in its payments solutions business bode well for future growth.
The economic expansion and rising consumer demand are likely to boost goeasy’s (TSX:GSY) growth prospects. The subprime lender has consistently delivered outsized growth in the past several years and has consistently boosted its shareholders’ returns through higher dividends.
I believe growth in its loan portfolio, strong payment rate, a decline in loan protection insurance claims, geographic expansion, and new product opportunities are likely to drive its revenues and earnings at a decent pace in 2021 and beyond. It has raised its dividends in the last seven years in a row and offers a healthy yield of 2.1%.
Like Shopify, Lightspeed POS (TSX:LSPD)(NYSE:LSPD) also benefits from the shift in the selling models towards the omnichannel platform. The company has witnessed accelerated demand for its payment platform and delivered exceptional growth, which is reflected in its stock price.
I believe the demand for its omnichannel payment platform could remain elevated. Moreover, its growing customer base, accretive acquisitions, innovation, and expansion in the U.S. provide a solid base for growth.
Dye & Durham
Dye & Durham (TSX:DND) continues to deliver strong revenues and EBITDA growth that supports the uptrend in its stock. Moreover, its accretive acquisitions further accelerate its growth and expand its geographical reach.
Dye & Durham benefits from its strong blue-chip customer base and high retention rate. Thanks to the strength in its base business and benefits from its recent acquisitions, Dye & Durham expects its adjusted EBITDA to more than double in FY21. Furthermore, it expects the momentum to sustain and projects 150% growth in its adjusted EBITDA for FY22. Its stock has witnessed a pullback, which is an excellent opportunity to buy this high-growth stock.
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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 Sneha Nahata has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends CARGOJET INC., Shopify, and Shopify. The Motley Fool owns shares of Lightspeed POS Inc.