Growth stocks are sprouting as the TSX continues to maintain its strength at the start of Q3 2021. If you have $1,000 to invest right now, Nuvei (TSX:NVEI), Vermilion Energy (TSX:VET)(NYSE:VET), and OrganiGram Holdings (TSX:OGI)(NASDAQ:OGI) are superb choices.
Nuvei is a hot pick because of the steadfast growth of the global digital payments industry. Contactless payments are trending, with tech giants Apple, Google, and Korean Samsung leading the way. The $14.02 billion provider of payment technology solutions from Montreal should thrive in the post-pandemic era.
Yuval Ziv, Nuvei’s Managing Partner, Digital Payments, can’t be more specific when he said, “We are always ahead of trends, booming verticals, and emergent payment processing developments.” The company’s website also said, “We injected our DNA into the payment industry.”
Nuvei is currently the payment partner of companies in online retail, digital goods & services, financial services, and gaming, among others. The financial results in Q1 2021 (quarter ended March 31, 2021) says it all. Revenue growth versus Q1 2020 was 80%. From a net loss of $62.3 million, Nuvei reported a net income of $27.8 million.
Energy stocks were severely beaten in 2020 but are staging a major comeback in 2021. Vermilion Energy, for example, lost a staggering $1.3 billion in Q1 2020. In Q1 2021 (quarter ended March 31, 2021), management reported nearly $500 million in net earnings.
Even the fund flows from operations (FFO) increased 20% to $162 million from Q4 2020. Management points to higher commodity prices, particularly global crude oil and European natural gas benchmarks, as the growth drivers. Both are Vermilion’s dominant products that contribute the most to revenues.
Another business highlight was meeting its debt reduction targets. Vermilion reduced the outstanding debt under its revolving credit facility by over $190 million, about 11% since Q2 2020. Based on the current forward strip, Vermilion forecasts an excess of $350 million in free cash flow (FCF) for 2021.
OrganiGram should be the talk of the town next following its 41% revenue growth in Q3 fiscal 2021 (quarter ended May 31, 2021) versus the same period in fiscal 2020. Notably, net loss was down to $4 million from a sizeable $88.9 million.
Paolo De Luca, OGI’s Chief Strategy Officer, said, “We were better staffed to fulfill the demand for our revitalized product portfolio, which continues to resonate well with consumers.” He adds that sales are trending higher to date in Q4, supported by a strong outlook for the industry.
On the expense side, OGI’s CFO, Derrick West, said, “We are encouraged by the progress we have made in reducing cultivation costs and capturing economies of scale as we ramp up cultivation.” Investors should include this producer of high-quality, indoor-grown cannabis in their shopping lists. The company could garner a significant marker share.
Great portfolio mix
A $1,000 capital is enough to take positions in TSX’s top performers Nuvei Corporation (+33.64), Vermillion Energy (+74.30%), and OrganiGram Holdings (+94.08%). The tech stock is the most expensive ($103.96 per share), while the energy and cannabis stock trades at $9.90 and $3.28, respectively. You’ll have a great mix of growth stocks with massive upside potentials.
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.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and OrganiGram Holdings. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.