The Canadian stock market keeps rising this year, as it’s now at a 10% gain since the beginning of 2021. The country might not yet be fully reopened, but investors are showing their bullish enthusiasm for a strong economic recovery this year.
What’s been interesting about this year’s bull run is that it’s been partially fueled by a returned interest in value stocks. High-priced growth stocks led the way last year, but many of those companies have cooled off as of late. With many of those growth stocks reaching frothy valuations, investors began searching for undervalued picks to add to their portfolios.
Whether you’re looking to ride the wave of value stocks or are in search of a discounted growth stock, I’ve got you covered.
I’ve reviewed two stock picks that you’ll want to add to your watch list right now. They are both completely different types of businesses, so there’s absolutely no harm at all in adding both to your portfolio today. Best of all, both stocks are trading below $100.
Investing in high-growth tech stocks
Value investors won’t put their money anywhere near Lightspeed, but I think the long-term potential reward is well worth the risk.
The Montreal-headquartered company has only been trading publicly for two years but has done a lot to impress investors during that time. Shares are up more than 350% since March 2019, but I firmly believe that this growth story is just getting started.
It’s far more than just the 350% growth that’s impressed me with this tech stock. Lightspeed has proven to investors in its two years trading on the TSX that it’s got its sights on taking on the tech giants of the world.
The stock has continued to grow its revenue at a torrid rate due to its product innovation and global expansion. Lightspeed is no longer just a point-of-sale hardware provider. Today, it offers its global customers all kinds of e-commerce solutions.
The Canadian banks are soaring
Bank stocks had a rough go in 2020. The unanticipated drop in interest rates led to the Big Five all trailing the market’s returns last year.
Fast forward to 2021, and it’s been a completely different narrative for the banks. The rotation out of tech companies and into value stocks has sent the banks soaring to all-time highs.
If you’re looking for a steady long-term investment that can also be an income driver, you can’t go wrong with adding any of the major banks to your portfolio. They all own respectable dividend yields today, and earning market-beating growth over the long term is certainly not out of the question.
The reason I’ve got Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) on my watch list is for its exposure to non-Canadian economies. It’s common to see a strong presence in North America within Canada’s top banks, but its Bank of Nova Scotia’s presence in Latin America that separates it from its peers.
Shares of the $90 billion bank are up close to 15% on the year. But even with the recent surge in price, the stock is still reasonably priced. The bank is trading today at a forward price-to-earnings ratio of just 10.
You may be hesitant to add a bank stock to your portfolio today while it’s trading at an all-time high, but Bank of Nova Scotia will do a lot more than just drive growth for your portfolio.
Still unsure about investing in Lightspeed POS? This report should help you decide...
Before you consider Lightspeed POS, you may want to hear this.
Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now... and Lightspeed POS wasn't one of them.
The online investing service they've run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.
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 Nicholas Dobroruka owns shares of Lightspeed POS Inc. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends BANK OF NOVA SCOTIA.