Often when stocks slump after earnings, the market is overreacting to some short-term headwinds that won’t impact the company long-term. Sometimes, though, it’s because new guidance or developments in the business have come out, and its growth potential looks to be impacted. For Real Matters Inc (TSX:REAL), though, the latter seems to be the case. So if you were considering an investment, you might want to look for other top Canadian stocks to buy now.
Real Matters was rallying ahead of its earnings last week, but after the dust settled, the stock sold back off. The stock has been one of the most popular Canadian stocks in the past. Investors are intrigued by Real Matters’ potential as a technology company in the real estate industry.
Unfortunately, after it reported earnings last week, the stock has since slumped. Mortgage rates have started to increase, and management had noted a sizeable reduction in mortgage applications. This has many investors worried that growth will slow dramatically.
Even several analysts rerated the stock lower after these results, showing the headwinds the company faces if mortgage rates continue to rise.
So instead of Real Matters, here are two Canadian stocks to buy instead.
Forget Real Matters: Consider this top real estate stock
Real Matters is a tech stock operating in the real estate space. However, as I mentioned before, increasing rates have investors worried about a slowdown in growth.
Not all stocks in the real estate space are facing the same headwinds, though. One of the top Canadian stocks to buy now is a residential real estate stock, InterRent REIT (TSX:IIP.UN).
InterRent is one of the top funds in the real estate sector. Unitholders have earned a whopping 1,067% over the last decade.
The growth has generally been consistent, too, as InterRent continuously executes on its growth strategy. The strategy consists of buying assets such as apartment buildings that it finds undervalue or offering the potential for investment.
It then renovates and upgrades the assets, which grows the net asset value for shareholders, and increases the cash flow it generates as the fund increases rents.
InterRent has been impacted slightly by the pandemic. However, it’s recovering now and doesn’t face the same headwinds as Real Matters stock. I wouldn’t wait too long to buy the growth stock now, though the discount to its pre-pandemic price is fading fast.
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A top Canadian tech stock to buy now
Although Real Matters operates in the real estate space, one of the major reasons it’s so intriguing is because it’s a tech stock.
Tech stocks offer major growth potential because they have the ability to scale so quickly. A top Canadian tech stock you may want to consider over Real Matters is AcuityAds Holdings Inc (TSX:AT).
The tech industry has been under pressure lately, and many tech stocks are on sale. However, AcuityAds is one of the cheapest stocks by far, especially when considering its long-term potential. That’s why it’s one of the best Canadian stocks to buy now.
The company is an intriguing growth stock in the AdTech space. AdTech has been a promising industry for a while. Today, with rapidly increasing computing power and massive innovation in machine learning, AdTech companies like AcuityAds have a huge runway for growth.
The company has two platforms for advertisers, a self-serve platform and one run by artificial intelligence. Plus, the company has been making several partnerships, including recently with Amazon, which looks quite promising.
The growth potential of AcuityAds over the next few years is massive. However, investors may need to exercise some patience in the meantime.
Now, however, is a great time to pick up some shares. AcuityAds currently trades at a more than 50% discount to its consensus target price from analysts. So if you’re looking for a top tech stock to buy now, AcuityAds is a much better long-term investment than Real Matters.
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. Fool contributor Daniel Da Costa owns shares of AcuityAds Holdings Inc. and INTERRENT REAL ESTATE INVESTMENT TRUST. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends AcuityAds Holdings Inc. and Amazon. The Motley Fool recommends Real Matters Inc and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.