The TSX Venture Exchange (TSXV) isn’t everybody’s cup of tea, as it holds many penny stocks that could move by double-digit percentage points in either direction at any moment.
Undoubtedly, excessive volatility can improve one’s odds of bagging a quick gain. That said, many such TSXV stocks out there are, on average, less investable than their bigger brothers on the TSX Index. Still, if you’re willing to put in the homework and have a stomach of steel, it is possible to catch some up-and-coming small-cap stocks on the TSXV that are destined to graduate to the big leagues: the TSX Index.
Top TSX Venture stocks worth a look
Do put in extra due diligence, though, because nobody wants to get caught offside with a name that reverses in a hurry. Chasing the “sexiest” TSXV stocks without putting in the homework can be dangerous. Still, there are a handful of small- to mid-caps that should have graduated to the TSX but haven’t for some reason or another. It’s these such names that I’d be inclined to buy, and in this piece, we’ll have a look at two of my favourite TSX venture stocks to stash in your portfolio if you’re looking for next-level growth and are unmoved by massive daily moves.
Enter StorageVault Canada (TSXV:SVI) and WeCommerce Holdings (TSXV:WE). The two TSX Venture stocks have some pretty impressive growth stories. The former name strikes me as one of the “safest” names on the TSXV Exchange that ought to have graduated to the TSX Index by now. The latter is a far more speculative hyper-growth play that’s only suitable for the most venturesome of investors who are unfazed by 50-60% downside moves.
Indeed, they are two very different TSX Venture stocks. But both, I think, ought to be on the average Canadian investor’s radar this July 2021.
StorageVault Canada is a self-storage play that goes against what you’d expect with a TSX Venture stock. The name has been a rather steady appreciator over the past several years, with the stock rising nearly 400% over the past years. Of late, the stock has endured bigger bumps in the road due to the COVID-19 pandemic. Undoubtedly, the migration from the inner city to the suburbs has worked against StorageVault. Densification and downsizing were two of the major tailwinds at the back of the self-storage companies. The pandemic has caused such tailwinds to falter, at least over the medium term.
Once the pandemic ends, whether it be in 2022 or 2023, I’d bet we’ll witness a reversion to the mean, as people move back towards the inner city to go back to the office. Sure, remote work probably won’t be eliminated, but I think a vast majority of people will have to show up in the office at least two days per week. As such, I expect densification and downsizing trends to pick up again on the other end of this pandemic. Both bode well for StorageVault.
WeCommerce is an up-and-coming growth stock that looks to be riding on the profound success of e-commerce king Shopify. The company owns a handful of promising digital retailers on the Shopify platform. The firm aims to “start, buy, and invest” in some of the world’s best Shopify businesses.
Undoubtedly, WeCommerce is a compelling play on the user side of the Shopify ecosystem. I think the young company can grow in its area of the booming e-commerce market and would look to keep an eye on the $440 million Vancouver-based company now that its shares are fresh off a nasty 60% plunge off its January 2021 highs.
In essence, I view WeCommerce as a compelling way to play very small business, which could fuel unbelievable growth for the firm. Should the firm’s strategy pay off, there’s no telling how much the stock could rise. Undoubtedly, investors will have to put their faith within the hands of management with their ability to unlock hidden value from every move they make. I think they can. I find the business to be interesting and will be keeping watch over the coming months and years.
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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends 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.