When investors see a stock generate a lot of gains in a short time period, two dangerous thoughts often come to mind. The first of these thoughts is FOMO (fear of missing out). Investors that have FOMO will often buy into a stock without doing much research in fear of not generating returns for themselves. Obviously, this is a terrible thing to do, since it’s making decisions based on emotion.
The second thought that investors may have when seeing a stock rise in value over a short timeframe is that they’ve missed their opportunity. This feeling of “being too late” is very common, and most investors will feel that way about at least one company at one point or another. However, for top growth stocks, it’s hard to be “too late.” Take Apple for example. You’ve certainly missed its explosive growth, but an investment made just over a year ago would have returned more than 100% already.
In this article, I’ll discuss two stocks that investors haven’t missed the boat on. It’s not too late to buy these growth stocks.
A strong performer since day one
Since its first day of trading, Nuvei (TSX:NVEI) has been a market winner. It closed the largest tech IPO in Canadian history, just under a year ago. Since then, the stock has gained an astonishing 225%. That represents an annualized return of 241%! Because of this outstanding return, many investors feel like it’s best to look elsewhere if they want to generate market-beating returns. However, I argue we’re still at the very start of Nuvei’s growth story.
Currently, the stock is valued at a market cap of $21.9 billion. That’s about four times less than what Adyen is valued at and nearly 15 times less than PayPal’s valuation. If Nuvei is able to reach the same valuation as either of those companies in the future, new shareholders will realize incredible returns.
Nuvei’s financials also suggest that the company may be able to continue growing strongly over the next few years. In its latest earnings presentation, the company reported a 114% year-over-year growth in its Q2 revenue. As the e-commerce industry continues to grow, investors can expect Nuvei to be a major beneficiary.
This is still a very attractive investment opportunity
Since its IPO in February, Topicus.com (TSXV:TOI) stock has generated a return of about 85.7%. That represents an annualized return of 151%. Because of this massive gain over such a short period, many investors have considered waiting for a correction in Topicus’s stock price before entering the company. While that could be a good idea, investors may be waiting for a very long time.
Topicus’s business is very strong right now. Its Q2 revenue increased 54% year over year. Even more impressively, the company was more than 10 times more profitable than it was in Q2 of last year. With the massive amounts of backing that Topicus receives from Constellation Software, investors should feel confident in starting a position at these elevated levels. Topicus’s growth runway is still very long.
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 Jed Lloren owns shares of Adyen and Apple. The Motley Fool owns shares of and recommends Apple, Constellation Software, PayPal Holdings, and Topicus.Com Inc. The Motley Fool recommends the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple.