Got $3,000? 3 Top TSX Stocks to Buy in July 2021

You can look to invest in growth stocks such as Lightspeed and Docebo to derive outsized gains over the long term.

| More on:
Businessmen teamwork brainstorming meeting.

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

The recent success of Shopify has accelerated the interest in growth stocks for Canadian investors. Investing in high-growth companies can increase the value of your portfolio at an exponential rate. Alternatively, growth stocks also carry significant risks due to their high beta, steep valuations, and vulnerability in a broader market selloff.

In the last few years, several Canadian tech stocks have managed to crush the TSX and derive market-thumping returns. We’ll look at three such growth stocks that should be on your radar right now.

Lightspeed POS

Shares of fintech giant Lightspeed POS (TSX:LSPD)(NYSE:LSPD) went public in March 2019 and have since returned a monstrous 466%. The company continues to expand its top line at a stellar pace via accretive acquisitions. In the fiscal Q4 of 2021 ended in March, Lightspeed sales more than doubled to US$82.4 million. After accounting for acquisitions, its revenue growth was an impressive 48% year over year. In fiscal 2021, LSPD sales rose to US$222 million, up from US$121 million in fiscal 2020.

Lightspeed offers a cloud-based platform that allows retailers and restaurants to manage operations, accept payments and improve customer engagement rates. The company’s customer base stood at 140,000 in 2021, up from 76,500 in 2020. Further, its gross transaction volume stood at US$11 billion, up 76% year over year in fiscal 2021.

Docebo

The next growth stock on the list is Docebo (TSX:DCBO)(NYSE:DCBO), a company that provides a cloud-based enterprise learning platform. Docebo transitioned towards a SaaS (software-as-a-service) platform in 2012 and is one of the pioneers in the e-learning space.

Docebo sales have risen from US$17 million in 2017 to US$63 million in 2020. Comparatively, its operating loss has narrowed from US$8 million in 2018 to US$5.5 million in 2020.

Docebo ended Q1 with US$217 million in cash, which means it has enough liquidity to improve the bottom line in the upcoming quarters.

Docebo’s customer base stood at 2,333 while average contract value per customer rose from $28,454 to $35,739. It also signed a customer agreement with Lightspeed POS recently.

Bay Street expects Docebo sales to rise by 53.8% to US$96.8 million in 2021 and by 36% to US$131.34 million in 2022. This solid growth will allow the company to narrow its loss per share from US$0.26 in 2020 to US$0.11 in 2022.

Dye & Durham

The final growth stock on my list is Dye & Durham (TSX:DND), which provides cloud-based software and technology solutions to improve the efficiency and productivity of legal and business professionals. The company has operations in Canada, the U.K., Ireland, and Australia. It has a blue-chip customer base that includes law firms, financial institutions, and governments.

In its most recent quarter, the company’s sales were up 300%, while EBITDA rose 267% year over year. DND’s management confirmed it will acquire the company and has partnered with a group of shareholders to bid $3.4 billion for the buyout. Dye & Durham stock is currently valued at a market cap of $3.22 billion and could gain pace if the final bid amount moves higher.

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Docebo Inc., Lightspeed POS Inc, and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.

More on Tech Stocks

grow money, wealth build
Tech Stocks

How to Create $100,000 by Investing $500/Month

These two TSX stocks will aid you in building wealth of $100,000 over the next 8.5 years.

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Tech Stocks

This Battered Growth Stock Could Soar Over the Next 3 Months

Docebo (TSX:DCBO)(NASDAQ:DCBO) is a top work-from-anywhere stock that may be in for a sizeable move to the upside in coming…

Read more »

financial freedom sign
Tech Stocks

3 Selloff Stocks That Could Set You Up for Life

Are you hoping to take advantage of the stock market selloff? Here are three stocks that could set you up…

Read more »

question marks written reminders tickets
Tech Stocks

Docebo (TSX:DCBO) Stock Is Still Down 63%: Should You Buy it?

The growth potential of many new tech stocks that joined the TSX during the pandemic may have been exaggerated, and…

Read more »

Plant growing through of trunk of tree stump
Tech Stocks

2 Growth Stocks Investors Should Buy Today

Are you looking for stocks to add to your portfolio? Buy these two growth stocks today!

Read more »

Male IT Specialist Holds Laptop and Discusses Work with Female Server Technician. They're Standing in Data Center, Rack Server Cabinet with Cloud Server Icon and Visualization
Tech Stocks

3 Tech Stocks I am Buying During a Correction

High-growth tech stocks such as Docebo and Shopify should remain part of your buying list right now.

Read more »

exchange-traded funds
Tech Stocks

2 Tech Sector ETFs to Buy for a Recovery

Individual tech stocks might not fit the risk appetite of many conservative investors. Though, gaining exposure to the entire sector…

Read more »

Growing plant shoots on coins
Tech Stocks

3 Growth Stocks Are Back in the Game: Up to 83% Upside to Come!

Buying a basket of diversified growth stocks can accelerate your retirement plan. Alternatively, you can use profits for a nice…

Read more »