As beginners, we all thought about finding that one stock that blows up and makes us rich. However, picking stocks is a tough thing to do. It often requires a lot of learning as you go. So, what makes a good growth stock? If you look at the top growth stocks in the world, you’ll see that many of them of founder-led, are leading emerging industries, and address a large market. In this article, I will discuss three top TSX growth stocks beginners should consider for their portfolio.
This stock has produced millionaires
Any stock that produces gains of +9,500% since its IPO is a true winner, especially if that company’s IPO was less than two decades ago. Constellation Software (TSX:CSU) is able to stake such a claim. Since October 2007, its stock has gained an average annual return of nearly 39%. That means an investment of $10,000 at that time would be worth more than $860,000 today. But what makes Constellation Software so good?
Constellation Software focuses on acquiring top businesses. As of this writing, the company has managed to acquire more than 500 businesses since its founding. Led by founder and president Mark Leonard, Constellation Software has managed to perfect its investment criteria and process in building acquirees into market leaders. This year, Leonard announced that the company would finally be expanding into large vertical market software companies, which could lift Constellation to new heights.
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Investors could see 10X gains
Nuvei (TSX:NVEI) is a global provider of payment-processing technology. The company has partners in 200 global markets including North America, Asia Pacific, Europe, and Latin America. The company’s platform spans the entire payment stack and includes a fully integrated payments engine.
Nuvei differentiates itself from its competitors by its target customers and available offerings. Where competitors tend to focus on a certain business class, Nuvei serves both small- and medium-sized businesses as well as large enterprises. In addition, the company’s competitors mainly focus on digital payments, whereas Nuvei also provides in-store and unattended payment solutions.
Originally named Pivotal Payments at its founding, Nuvei recognizes the fact that the world is experiencing a pivot from legacy payment solutions to a largely online setting. As the global economy continues to shift towards an increased penetration in e-commerce, and the widespread popularization of eWallets and other digital payment options, companies like Nuvei are well positioned to succeed.
Led by its multiple award-winning founder-CEO Philip Fayer, the company aims to continue innovating and developing technology that adds value to merchants of all sizes, across many different industries.
Canada’s top growth stock
If you’ve held Shopify (TSX:SHOP)(NYSE:SHOP) stock over the past six years, you would be sitting on a pretty amazing profit. This is a stock that doesn’t require much introduction or explanation. Since its IPO in May 2015, Shopify stock has gained more than 4,500%. This means that an investment of $10,000 at that time would be worth nearly $470,000, gaining an average of 88.9% annually. Shopify was one of the companies that emerged as a global leader in 2020 during the COVID-19 pandemic.
Led by founder-CEO Tobi Lütke, the company aims to continue diversifying its business. In recent years, Shopify has entered the media production and eSports industries. When taken as a whole, with its core e-commerce business, Shopify looks like a no-brainer for investors looking for generous returns.
Want one more top growth stock? Here's a bonus pick!
There’s a dark horse Canadian company that has produced 3 TIMES the number of vehicles as Tesla, yet its stock trades for roughly 25x LESS!
We’re convinced this under-the-radar Canadian disruptor that’s less than 5% the size of Tesla could be one of the best growth stocks of 2021 and beyond.
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 Jed Lloren owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify and recommends the following options: long January 2023 $1140 calls on Shopify and short January 2023 $1160 calls on Shopify. The Motley Fool owns shares of and recommends Constellation Software.