2 Top Stocks to Buy if the Market Continues to Tumble

The TSX is experiencing one of the sharpest declines of the year, and if it continues, you might have another go at buying some of your favourite top stocks.

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There are two types of top stocks: ones that everyone knows about and are really easy to find, and the others that tend to fly under the radar and are relatively difficult to spot. When the economy is strong and the market is bullish, you have to sift through the stocks and find the hidden gems that might be attractively valued yet pack great growth potential.

But when the market is tumbling down, and the stocks are taking a beating, it’s the time to buy the shiny stars of TSX that are otherwise too expensive to touch. The TSX sees one of the sharpest declines of the year, and it might just be a temporary dip, but if the market keeps tumbling down, you might have a chance to buy top stocks like goeasy (TSX:GSY) and Lightspeed (TSX:LSPD)(NYSE:LSPD) at attractive prices.

A financial stock

Currently, there are very few stocks on the TSX that can match the growth history and future growth potential of goeasy that are as attractively valued as this alternative financial company is. With a price-to-earnings ratio of 9.6 and a price-to-book ratio of 3.8 times, goeasy is quite modestly priced at the moment. Some of it can be attributed to its impressive revenue growth in the past few quarters.

Despite being an alternative lender, goeasy’s liabilities don’t exceed its assets, and it has a very stable balance sheet. The revenues and the net income have been growing in double digits for the past several quarters, and the company is slowly expanding its reach and financial product range through strategic acquisitions.

And even though the 1.8% yield might not be overly impressive, it’s important to note that in the last five years, goeasy has grown its payouts at an unparalleled rate. But the chief reason to keep an eye on goeasy and add it to your portfolio as soon as it dips further is its capital growth potential.

A tech stock

It started out as baby Shopify, but Lightspeed has now turned into an impressive, internationally recognized name in the world of e-commerce. It markets itself as an all-in-one cloud-based solution for businesses in the retail, golf, and restaurant industry. It offers a wide variety of products, though POS systems still remain its forte.

One thing that sets Lightspeed apart is that it was already coming down before the market started to tumble downward. The stock is already down 32.5% from its yearly peak, and you might consider buying into the company before or as it hits rock bottom. The e-commerce market still has a lot of growth potential, and Lightspeed might reach new heights yet.

Foolish takeaway

These two aren’t the only stocks that should be on your radar if the tumble grows into a full-blown crash, but unlike stocks that have just started sliding down, these two have been at it for a while. goeasy has come down 7.8% from its early peak. If the market carries on its downward momentum, the two companies might be available for a steep discount.

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 Adam Othman owns shares of Shopify. 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 and recommends the following options: long January 2023 $1140 calls on Shopify and short January 2023 $1160 calls on Shopify.

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