The Motley Fool

3 TSX Stocks I’m Buying Next

analyze data
Image source: Getty Images

If you’re building your own portfolio, it’s a good idea to plan before buying any shares. That way, you can strategize the best plan of attack and make sure you don’t make any rash decisions. I tend to plan for things at least two weeks out, since I feel like that allows myself to think of all the possible scenarios. I’ve narrowed down my next buys to three companies. These are three TSX stocks I’m buying next.

I’ve been watching this stock since its IPO

The first stock I plan on buying is (TSXV:TOI). I’ve been watching the stock since its IPO, largely because of its connection with Constellation Software. Since then, the stock has done very well, gaining more than 76%. However, I’ve yet to start a position in the company. Why? It’s generally a good idea to wait after an IPO to assess whether a company can execute and please investors. Now, about a quarter and a half after its IPO, I really like what I see.

Like Constellation Software, Topicus is an acquirer of vertical market software businesses. It focuses on the highly fragmented European market. As mentioned previously, one of the most appealing aspects about this company is that it can lean on the highly experienced and successful Constellation Software. Six members of the Topicus board of directors are executives from Constellation, including its president, Mark Leonard. This is a unique opportunity where a growth stock is given a playbook to success from the get-go.

Not afraid to make this a larger position

Shopify (TSX:SHOP)(NYSE:SHOP) is already the third-largest position in my portfolio. However, I’m not opposed to adding to the position. Some would argue that a better plan would be to add to smaller positions and diversify. While I would normally agree, I prefer to follow a well-known Motley Fool mantra of adding to my winners. I’m very familiar with how this company operates, what its industry looks like, and highly approve of its management team. For all those reasons, I can see myself buying more Shopify shares in the future.

Shopify is one of the quickest-growing e-commerce companies in the world. In terms of reach, the company has already secured the second-largest share of the online retail industry in the United States. Looking at its GMV, investors should note that it’s only three years behind Amazon, although catching up may be a different story. A company that isn’t afraid to innovate, Shopify has recently allowed merchants to sell NFTs on its platform. In addition, Shopify has decided to move into the esports and entertainment industries. This stock isn’t done growing.

Looking to diversify with quality companies

As you can probably guess from the first two entries in this article, my portfolio is very concentrated on the tech sector. I enjoy investing in companies that are disrupting their respective industries, and it just so happens that a lot of areas within the tech sector are being heavily disrupted. However, I do recognize that there are excellent companies in other sectors that would be great to hold in my portfolio. Therefore, I plan to add Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) in the near future.

Brookfield is an alternative asset management firm which focuses on investing and operating within the real estate, infrastructure, and utility sectors. Because of its focus on those industries, Brookfield’s portfolio is heavily concentrated on real assets. Its CEO Bruce Flatt believes that institutional investors will continue to pursue real assets with more conviction in the future. This puts Brookfield ahead of the game.

The company also displays its forward-thinking mentality through its partnership with Tesla to develop North America’s largest sustainable neighbourhood. This is a top stock I’m looking forward to owning.

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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Jed Lloren owns shares of Shopify and Tesla. The Motley Fool owns shares of and recommends Amazon, Brookfield Asset Management, Constellation Software, Shopify, Tesla, and Topicus.Com Inc. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV and recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.