Top 2 Growth Stocks to Buy Right Now

Growth stars like Descartes Systems Group (TSX:DSG)(NASDAQ:DSGX) are probably the best stocks to buy right now.

| More on:
grow dividends

Image source: Getty Images

Growth stocks have had a rough run this year. After last year’s stunning rise, many have been deflated, as investors pull cash out of the stock market. That means it’s the perfect time to snap up stocks on discount. Here are the top growth stocks to buy right now. 

Retail stock to buy right now

Canada Goose (TSX:GOOS)(NYSE:GOOS) is the ideal growth stock to buy right now. It’s trading far below its peak. But it’s perfectly positioned to rebound strongly in 2021. 

For one, the company is expanding across China, which is a critical market for any luxury retailer. The Canada Goose brand is already pretty popular in China. Now, all the team needs to do is capitalize on this popularity, which should unlock tremendous growth. 

The company is also expanding its product line beyond heavy winter coats and reinvesting in its online shopping platform to stay ahead of the game. These catalysts should all lead to much higher sales for the company in the years ahead. 

Meanwhile, the stock is trading at 76 times trailing earnings and 27 times forward earnings per share. That’s a reasonable valuation for a company with a long track record of stellar growth. This is probably one of the best stocks to buy right now. 

Software stock to buy right now

Descartes Systems Group (TSX:DSG)(NASDAQ:DSGX) is well positioned to become a major player in the e-commerce logistics and fulfillment segments. The company has made a name for itself as a reliable provider of logistics and supply chain technology.

It supplies its cloud-based logistics and supply chain management software to clients worldwide. Its offerings strong demand in four industrial segments, including retail and manufacturing. The surge in consumer demand coupled with increasing reliance on virtual tech explains Descartes’s impressive first-quarter results.

Revenues in the quarter were up 18% year over year to $98.8 million, topping analysts’ estimates of $92.2 million. Net income nearly doubled to $18.4 million, or $0.21 a share, compared to $11 million, or $0.13 a share, reported a year ago.

Given that about 90% of Descartes’s revenues are recurring, it is well positioned to generate long-term value. The business is already profitable and well positioned to continue growing, going by the impressive outlook in the pandemic recovery.

Descartes’s valuation

Based on its price-to-sales multiple of 18 and price-to-book multiple of 6.9, Descartes could be considered overvalued. The stock is also trading at a price-to-earnings ratio of 95, which is perfectly fine for a high-growth software company. 

Additionally, Descartes boasts a 10-year compound annual growth rate of 28.75%, affirming its growth metrics. Given the strong demand for its cloud-based logistics solutions, the company remains well positioned to post impressive numbers and generate significant value for many years to come. That said, it would be an ideal pick for investors eyeing exposure in the burgeoning supply chain management sector.

Bottom line

This is a great time to buy growth stocks. Investors are less excited about aggressive growth stocks, which has suppressed valuations. In my view, Descartes and Canada Goose are the top growth stocks to buy right now.

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.

The Motley Fool recommends Canada Goose Holdings. Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned. 

More on Investing

funds, money, nest egg
Investing

Retirees: 3 Canadian Stocks You Can Confidently Own for the Next 20 Years

Here's why retirees need to plan beyond 20 years in retirement. Fortis Inc. (TSX:FTS), Royal Bank of Canada (TSX:RY) stock…

Read more »

Question marks in a pile
Tech Stocks

Should You Invest in Absolute Software Stock Right Now?

Absolute Software (TSX:ABST) is a tech stock that is worth your attention, as it offers exposure to exciting security markets.

Read more »

Dividend Stocks

1 Oversold Dividend Stock I’d Buy in December 2022

Here’s one of the best Canadian dividend stocks to buy in December that I find undervalued.

Read more »

Investing

FOR TUESDAY – 3 TSX Stocks to Buy Today and Hold for the Next 3 Years

Given their growth prospects, these three TSX stocks could outperform over the next three years.

Read more »

Supermarket aisle with empty green shopping cart
Stocks for Beginners

Is Dollarama Stock a Buy at All-Time Highs?

Dollarama stock (TSX:DOL) remains at all-time highs while the rest of the market drops. Does this mean it's due to…

Read more »

Online shopping
Tech Stocks

Should You Buy Shopify Stock If the Rate Hike Cycle Slows?

Is SHOP stock a buy after its 72% drop this year?

Read more »

A bull outlined against a field
Investing

2 Canadian Stocks Set to Soar in a New Bull Market

Consider Sleep Country Canada Holdings (TSX:ZZZ) stock and another mid-cap bargain, as the bear market moves on.

Read more »

Gold bars
Metals and Mining Stocks

Better Buy: Newmont or Barrick Gold Stock?

If you think better days are ahead for gold miners, consider exploring gold stocks Newmont and Barrick Gold.

Read more »