As the Dogecoin trade heats up again, investors would be wise to take profits before they’re surrendered once again. If risky growth stocks are what you seek, here are three names that I’d be willing to bet will outperform even the hottest cryptocurrency over the next three years.
Docebo (TSX:DCBO)(NASDAQ:DCBO) is an e-learning company whose shares have pulled the brakes in recent months. With many workforces calling for their remote workers to head back into the office, a Learning Management System (LMS) company that plays a vital role in the training of remote employees seems like it’ll lose a step. Even if Canada isn’t doomed to suffer through a fourth wave of lockdowns, I still think investors are underestimating the staying power of Docebo’s incredible AI-leveraging platform.
Moreover, given the pandemic has likely accelerated the LMS market’s adoption by many years, I think Docebo’s incredible managers could have a few positive surprises up their sleeves that could help offset any post-pandemic deceleration to its user growth. Sure, unfavourable year-over-year comparisons are coming up. Still, if you’re a long-term investor looking for a top Canadian way to play the digital transformation, I see no reasons to take a raincheck on Docebo stock in its temporary moment of weakness.
Rising rates and fading pandemic tailwinds shouldn’t cloud the longer-term growth story, which, I believe, is as attractive as ever.
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Dye & Durham
Dye & Durham (TSX:DND) is another “pricy” Software-as-a-Service (SaaS) stock that trades at north of 20 times sales. The company is fresh off an incredible quarter and a series of small acquisitions that would have been easy to miss had you not followed the name closely. Simply put, Dye & Durham is firing on all cylinders after having rewarded investors with multi-bagger gains since landing on the TSX just over a year ago.
The company recently announced its intention to go private. A group of management-led investors is interested in acquiring the firm at a price tag of $50.50 per share or $3.4 billion. Undoubtedly, Canadian investors have a lot of long-term growth to miss out on if Dye & Durham does, in fact, get gobbled up by a group of investors. Although shareholders appreciated the recent 16% pop in the stock, I personally wouldn’t be a fan given the long-term growth that one would miss out on for a pretty modest pop.
There may be more offers incoming. And there is a chance that the deal could end up falling through. In any case, I think a price tag of around $50 is undervaluing shares that could trade at much frothier multiples. Many high-flying cloud stocks in the states trade at pie-in-the-sky multiples well north of 40 times sales. So while Dye & Durham’s 24 times sales multiple seems steep, it’s really not when you stack the name against some of the higher flyers out there.
Docebo and Dye & Durham are wonderful Canadian tech companies that investors are capable of some incredible growth over the next decade. The latter company could go private, but if it doesn’t and shares retreat modestly, I’d look to load up. As for Dogecoin, I’m not even confident that the meme token will be around five years from now.
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Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Docebo Inc.