2 Top TSX Growth Stocks to Load Up on Today

Here’s why Constellation Software (TSX:CSU) and Boyd Group (TSX:BYD) remain two of my top picks for growth investors today.

| More on:
potted green plant grows up in arrow shape

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

In my opinion, the best time to buy stocks one likes is when everyone is selling. Given the current state of the market today, there are opportunities for such investors.

Growth stocks have sold off considerably of late. However, I think in many cases, the good stocks are getting thrown out with the bad.

In this article, I’m going to discuss why Constellation Software (TSX:CSU) and Boyd Group (TSX:BYD) are great picks in this regard. These stocks are ones I’d buy on any dip. Accordingly, those bullish on the growth these stocks can provide long term may want to consider these stocks right now.

Constellation software

Constellation’s growth-by-acquisition strategy has become a case study for investors in how such operations should work. Constellation’s track record of outperformance speaks to the validity of this model. Indeed, the company’s stock price has more than tripled over the past five years. Constellation has a keen eye for small-cap companies in its sector, which it has prudently been acquiring. This consolidation strategy has increased its returns and cash flow dramatically over time.

Constellation happens to have thousands of potential targets to choose from. And the company only picks the best of the best to join its conglomerate. By acquiring high-growth companies at a reasonable price, Constellation has been able to produce out-of-this-world returns on invested capital for investors over the years.

Constellation is perhaps the best long-term growth holding on the TSX right now. For those who believe the company’s future is as bright as its past, this is an easy pick here.

Boyd Group 

A company with a similar business model to Constellation’s is Boyd Group.

However, unlike the software space, Boyd focuses on consolidating the fragmented auto repair industry. This business model has turned out to be equally lucrative for Boyd investors over the years. Taking a look at the company’s long-term chart says as much.

Of course, the pandemic hasn’t helped the company’s growth prospects of late. With people not driving around that much, sales have dropped. This near-term pressure has provided what I view as a nice buying opportunity with this stock of late.

That said, Boyd has still provided some incredible returns to investors over the past decade. This stock has been a 30-bagger for long-term growth investors who have held over the years. That’s not bad — for any stock.

If the company can continue to acquire companies at discounts over time and grow earnings proportionally, more growth could be on the horizon. This is another great long-term growth pick for contrarian investors in this environment.

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Software. The Motley Fool recommends Boyd Group Services Inc.

More on Tech Stocks

Business success with growing, rising charts and businessman in background
Tech Stocks

3 Growth Stocks Worth Buying Today

With the volatility of the stock market, many investors continue to avoid growth stocks. However, here are three stocks worth…

Read more »

Online shopping
Tech Stocks

Down 80% From Record Highs, Is Shopify Stock Undervalued Right Now?

Shopify is among the worst-performing stocks on the TSX in 2022. The selloff surrounding growth stocks has dragged Shopify lower…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Tech Stocks

Could Lightspeed (TSX:LSPD) Stock Hit $50 in 2022?

The significant selloff in Lightspeed stock seems unwarranted, especially as the company has multiple growth catalysts and is delivering robust…

Read more »

analyze data
Tech Stocks

Fantastically Cheap TSX Tech Stocks

Investors should benefit from buying cheap tech stocks that are growing their profits in this market correction.

Read more »

Wireless technology
Tech Stocks

2 Quality Growth Stocks Breathe Life Into the Tech Sector

The battered technology sector has been advancing lately thanks to two quality growth stocks with pricing powers.

Read more »

clock time
Tech Stocks

Now’s the Time to Load Up the TFSA With These 2 Top TSX Stocks

Here are two top TSX stocks that long-term growth investors may not want to give up on, especially at these…

Read more »

shopping online, e-commerce
Tech Stocks

Shopify (TSX:SHOP) Stock Recovers 30% From its 3-Year Lows: Should You Buy?

Shopify stock: Should you buy the dip or wait for more weakness?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Tech Stocks

What Market Correction? 2 High-Growth Tech Stocks That Are on the Rise

I don’t think it will be long before these two Canadian tech stocks are back to delivering market-crushing returns.

Read more »