Despite the expensive valuation and heightened volatility in the market, I suggest investors to continue to stick with winners for stellar long-term gains. I believe the valuations would soon appear reasonable as these companies continue to deliver solid financial and operating performances.
Shopify (TSX:SHOP)(NYSE:SHOP) continues to deliver robust financial and operating performance making it one of the top long-term stocks listed on the TSX index. Notably, the expected normalization in growth rate and its high valuation led to a pullback in Shopify stock. However, I would suggest investors to continue to add Shopify and never sell as there are good reasons to hold this stock.
Shopify has multiplied its shareholders’ wealth and could continue to do so in the future. Increased spending on e-commerce platforms, expansion of its fulfillment network, and adoption of its payment services bode are likely to support its financials. Moreover, its growing global footprint, the addition of new sales and marketing channels, value-added products, and operating leverage could accelerate its growth, drive margins, and support further upside in its stock.
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goeasy (TSX:GSY) is a multi-bagger and has delivered exceptional returns in the past. Its stock has appreciated by over 2,100% in the last decade. Meanwhile, it has handily outperformed the broader markets in one year and is up about 265%. goeasy consistently increased its earnings at a breakneck pace over the past two decades. To be precise, its adjusted net income has grown at a compound annual growth rate (CAGR) of 31% since 2001, which is incredible. Thanks to its ability to grow its earnings at such a solid pace, goeasy has managed to boost its shareholders’ returns through higher dividends.
I expect goeasy’s earnings to continue to increase at a similar pace in the forthcoming years. Its top-line is projected to grow at a double-digit rate, reflecting a recovery in consumer demand and growth in its loan portfolio. Further, product expansion, acquisitions, strong payments volumes, growing loan size, and expense management are likely to accelerate its growth and drive its earnings at a high double-digit rate. I expect goeasy to increase its dividends at a very high rate and bolster its shareholders’ returns.
Lightspeed POS (TSX:LSPD)(NYSE:LSPD) is another top high-growth TSX stock to bet on. Strong secular industry tailwinds, high demand for its digital products and services, and its accretive acquisitions provide a solid base for outsized growth. The continued shift to omnichannel payments platform and expansion of its product range are likely to drive its top-line and margins, in turn, its stock.
I believe Lightspeed’s growing scale, expansion in the high-growth markets, and strategic acquisitions are likely to drive its customer base, accelerate the growth rate, and solidify its competitive positioning in North America, the Asia-Pacific, and the United Kingdom, and Europe.
Furthermore, up-selling and high-value products are driving its average revenue per user and support its margins. With strong secular industry trends and solid demand for offerings, Lightspeed stock could continue to trend higher. Notably, it has witnessed a healthy pullback in the recent past, which is an opportunity to go long on Lightspeed.
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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 Shopify and Shopify. The Motley Fool owns shares of Lightspeed POS Inc.