Technology stocks, which had witnessed a strong rally during the pandemic, are under pressure over the last few days, as investors look to rotate their portfolios by replacing high-growth expensive stocks with value stocks. The rotation has dragged some of the tech stocks to attractive levels. Here are the four Canadian tech stocks that you can buy right now for superior returns.
Amid the pandemic-infused restrictions, many small-scale businesses adopted omnichannel solutions, driving the demand for Lightspeed POS’s (TSX:LSPD)(NYSE:LSPD) products and services. The company also posted substantial numbers in its recently reported third quarter, boosting its stock price. However, amid the recent pullback, the company has lost close to 35% of its stock value from its recent highs.
The pullback provides an excellent buying opportunity, given the structural shift towards online shopping, its strong customer base of 115,000, and a pipeline of innovative product offerings. Its recent acquisitions of ShopKeep and Upserve could increase its market share as an omnichannel commerce platform provider for small- and medium-scale businesses in the U.S.
Further, the company has raised another US$676 million through new equity offerings, which could help the company make future acquisitions to expand its operations geographically.
After hitting a new 52-week high on January 27, BlackBerry (TSX:BB)(NYSE:BB) has witnessed a sharp selloff since then amid concerns over speculative trading. The company currently trades over 65% lower than its 52-week high. The sharp selloff has dragged the company’s valuation into an attractive territory, with its price-to-book multiple standing at 3.
Meanwhile, BlackBerry’s outlook looks healthy. Its recent partnership with Amazon Web Services and Baidu could strengthen its position as a software provider for automakers. Further, its innovative cybersecurity platforms have helped the company acquire many blue-chip clients. The company also earns over 90% of its revenue from recurring sources, which is encouraging. Given its healthy growth prospects and attractive valuation, I believe BlackBerry could deliver superior returns over the next two years.
Docebo (TSX:DCBO)(NASDAQ:DCBO) provides highly configurable cloud-based e-learning platforms. Amid the pandemic, the demand for its service rose, as people preferred to work and learn from their homes. It has over 2,025 customers, with more than 75% of them have signed multi-year agreements. It also earns a significant part of its revenue from recurring sources and has a high customer retention rate.
Many businesses look to upskill their employees amid changing business environments. Meanwhile, online-learning platforms are cost-effective and convenient to provide learning and developmental support, as the employees could still carry out their day-to-day activities. So, I believe the demand for Docebo’s service could sustain in the post-pandemic world also. Given its high-growth prospects, investors should utilize the recent pullback in the company’s stock price to accumulate the stock for superior returns.
My final pick would be Goodfood Market (TSX:FOOD), an online grocery and meal solutions provider, which continued to add new subscribers to its platform. In the second quarter of fiscal 2021, the company added 13,000 new subscribers to increase its active subscribers to 319,000, reflecting a growing adoption of online shopping.
Meanwhile, Goodfood Market has expanded its product offerings, penetrated new markets, and introduced newer services, such as same-day-delivery, which has gained traction with its customers. Amid the recent selloff in the high-growth tech stocks, the company is currently trading over 37% lower than its 52-week high. Its valuation also looks attractive, with its forward price-to-sales multiple standing at 1.6. So, given its high-growth prospects and attractive valuation, I am bullish on Goodfood Market.
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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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends BlackBerry, BlackBerry, and Goodfood Market and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.