The TSX has an array of great buys in Q3 2021, particularly growth stocks. Three names stand out for investors looking for superior returns. You should act quickly to buy them before the prices soar sky high.
Birchcliff Energy (TSX:BIR) had a forgettable 2020 but has gained significantly (+313%) from a year ago. The share price is only $4.71, and market analysts recommend a strong buy rating. They forecast a return potential of at least 41% ($6.66) to as high as 91% ($9) in the next 12 months. The year-to-date gain is 166.83%.
This $1.25 billion intermediate oil and natural gas company also pays a modest 0.41% dividend. Birchcliff benefitted from improved commodity prices in Q1 2021 (quarter ended March 31, 2021) that resulted in a substantial 138% increase in adjusted fund flows. Likewise, management reported a $3.28 million net income versus the $6.75 million net loss in Q1 2020.
Jeff Tonken, Birchcliff’s president and CEO, confirms the guidance revision due to the increased outlook for adjusted funds flow. The company also plans to reduce total debt in the second half of 2021.
Leading greenhouse grower
Village Farms International (TSX:VFF)(NASDAQ:VFF) trades at a discount (-6.75% year to date), although the current share price of $12.02 is 40% higher from a year ago. Market analysts see an upside potential of 67% to $20.10 in the next 12 months.
The $976.58 million company is a vertically integrated greenhouse grower from Delta, BC. It produces and distributes fresh, premium-quality produce (all-year round) to national grocers in Canada and the United States. Village Farms is a promising cannabis stock that is well positioned to garner a significant market share in the lucrative industry.
Management is now leveraging its expertise to capitalize on the emerging global cannabis opportunities. Pure Sunfarms, a wholly owned subsidiary, is one of the single largest cannabis growing operations in the world. The goal is to become a vertically integrated leader in the U.S. hemp-derived CBD market.
Village Farms has one foot in the door already with its joint venture (JV) with Village Fields Hemp USA. The JV will execute the multi-state outdoor hemp cultivation and CBD extraction plans at Village Farm’s Texas greenhouse operations.
Massive growth on the horizon
Lion Electric Company (TSX:LEV)(NYSE:LEV) flies under the radar, because it’s relatively new in the stock market. It has a market cap of $3.61 billion and engages in the manufacture of all-electric medium- and heavy-duty urban vehicles. The industrial stock made its debut on the TSX and NYSE on May 7, 2021.
The business combination with Northern Genesis Acquisition Corp., a special purpose acquisition company, preceded the IPO in both exchanges. However, the industrial stock continues to underperform. The current share price of $19.16 is 11% lower than on the first trading day.
Still, Lion Electric is a viable option for growth investors. Market analysts are bullish and predict the stock to climb 54% to $29.55 within a year. The growth potential is visible following the Q1 fiscal 2021 (quarter ended March 31, 2021) results. Management reported a 417% increase in revenue compared to Q1 fiscal 2020. Net loss, however, was $16.1 million.
Take your pick now
Take your pick from among the three growth stocks. All of the companies have great things going for them towards the end of 2021. By 2022, the stock prices could be expensive already.
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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Village Farms International Inc and Village Farms International, Inc.