Avoid Reddit Stocks and Buy These Growth Stocks Instead

Investors should duck Reddit stocks and target growth stocks like WELL Health Technologies Corp (TSX:WELL) instead.

| More on:
online shopping

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

Reddit stocks, or “meme stocks” if you prefer, caught fire again in June. As usual, GameStop took centre stage. The video game retailer’s stock surged above the US$300 mark in early June before retreating in the days that followed. Its shares were down 2.8% month over month as of early afternoon trading on June 25. Meanwhile, AMC and BlackBerry have also managed to gain momentum.

I’m more inclined to target two different growth stocks on the TSX in late June. These stocks offer superior returns without the headache that comes with the volatility of Reddit stocks.

Here’s a growth stock I’m targeting over Reddit stocks

Nuvei (TSX:NVEI) debuted on the TSX in September 2020. The company provides payment technology solutions to merchants around the world. Shares of this growth stock have climbed 35% in 2021 at the time of this writing.

Investors can expect to see Nuvei’s second-quarter 2021 results later this summer. In Q1 2021, the company achieved impressive total volume growth as it continued to expand globally. It finished the quarter with two promising acquisitions; Mazooma Technical Services and SimplexCC.

The first will provide Nuvei with access to the exciting North American sports betting market. Meanwhile, Simplex is a payment solution provider to the cryptocurrency industry.

This growth stock still has room to run this summer and beyond. Moreover, the company is on track for strong earnings growth going forward.

This health care stock is worth holding for the long term

WELL Health (TSX:WELL) was one of the best-performing stocks during the COVID-19 pandemic. The crisis saw health care professionals move into the digital space to provide for their patients. This has given rise to telehealth, which looks like it will be here to stay going forward.

WELL Health experienced record revenues during this period. Shares of this healthcare-focused growth stock have climbed 177% from the prior year. I’d suggested that investors continue to stack WELL Health earlier this month.

The company released its first-quarter 2021 results on May 11. It posted record quarterly revenues of $25.6 million in Q1 2021 – up 150% from the previous year. Meanwhile, software and services revenue jumped 345%.

Adjusted EBITDA also hit a record $1.1 million. Its recent acquisition of CRH Medical is expected to generate US$150 million in revenues, US$60 million in EBITDA and US$40 million in free cash flow before leverage and tax costs. WELL Health posted a record-adjusted gross profit in the first quarter.

The COVID-19 pandemic is winding down in North America, but that does not mean that telehealth services will disappear over night. On the contrary, digital health care services may become the norm going forward.

Shares of this growth stock were trading in more favourable territory compared to its industry peers at the time of this writing. WELL Health is still one of my top growth stocks to target as we kick off the summer. I’d rather own it over any of the Reddit stocks in late June.

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 Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool recommends BlackBerry.

More on Investing

oil and natural gas
Energy Stocks

Better Buy: Suncor or Cenovus?

Suncor Energy Inc. (TSX:SU)(NYSE:SU) and Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) have soared in the year-over-year period.

Read more »

funds, money, nest egg
Dividend Stocks

TFSA Passive Income: 2 Great Canadian Dividend Stocks for Retirees to Buy Now

Retirees seeking reliable passive income can now buy top TSX dividend stocks at cheap prices.

Read more »

man window buildings
Stocks for Beginners

Foolish Beginners: 1 Stock Pick to Buy Now for a $6,000 TFSA

Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) stock looks cheap as shares regain their footing.

Read more »

data analyze research
Dividend Stocks

Earn Monthly Passive Income: 2 Hot Dividend Stocks in Canada to Buy Now and Hold Forever

These two hot dividend stocks could help you to earn stable monthly passive income in Canada.

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Dividend Stocks

Be a Landlord: Top 2 REITs (With Monthly Dividends) I’d Buy and Forget

You can be a landlord and earn monthly dividends for the rest of your life. All you need is the…

Read more »

Target. Stand out from the crowd

3 Canadian Stocks to Buy That Beat Their Earnings Expectations This Week

If you're looking for top Canadian stocks to buy, here are three impressive companies that continue to perform well in…

Read more »

A stock price graph showing declines
Energy Stocks

2 Cheap Canadian Stocks That Likely Won’t Be on Sale For Much Longer

These two Canadian stocks are close to returning to all-time highs. Don’t miss your chance to take advantage of these…

Read more »

A worker gives a business presentation.
Dividend Stocks

Got $5,000? 3 Stocks to Hold for the Next 20 Years

New investors don’t need tens of thousands to start a portfolio. Here are three stocks to hold for the next…

Read more »