In case you are looking at lower-priced stocks with the potential to outpace the broader markets, it makes sense to consider companies such as Goodfood (TSX:FOOD), WELL Health (TSX:WELL), and Kinross Gold (TSX:K)(NYSE:KGC). All three stocks are priced below $10 and are a good long-term bet for growth investors.
Goodfood is a solid long-term bet
Goodfood offers fresh meal solutions and online grocery services to Canadians. Since its initial public offering (IPO) listing in June 2017, the stock has returned over 325% to shareholders. However, it’s also down 14% in 2021, allowing you to buy the dip.
As the demand for e-commerce platforms gains pace and more people shop for groceries online, companies like Goodfood will benefit from this shift in consumer spending. Goodfood’s portfolio of offerings, better pricing strategy, strong market presence, targeted marketing campaigns, and faster delivery mechanisms will hold it in good stead.
The company came up with its third-quarter results last month, which was pretty impressive. Its top-line grew 24% primarily due to the increased portfolio of offerings and improved delivery services. Additionally, investments in automation and optimized delivery services also contributed to a 6.2% growth in its gross margin.
The company has made some more investments that will enhance its performance further in the coming days, such as the new user-friendly mobile application launched by Goodfoof can attract new customer interactions while the automatic fulfillment centre in Ottawa will enhance its customer reach.
Kinross is a hedge against volatility
Ontario-based Kinross Gold Corporation is among the top 10 gold mining companies and is engaged in the mining of gold and silver in the United States, Russia, Brazil, Chile, Ghana, and Mauritania. The stock is almost near its 52-week low and has lost about 33% in the past year and 26% in 2021. However, with gold now making a sharp recovery, the stock is due for a reversal.
Kinross expects to produce 2.4 million gold equivalent ounces this year, and this figure is forecast to increase to 2.7 million and 2.9 million ounces in 2022 and 2023 respectively. Further, the increased production costs that were faced due to COVID-19 are expected to reverse in 2022.
These rising outputs will improve operating efficiency and help the company achieve a margin of better than $800 per ounce of gold. Moreover, the stock is grossly undervalued and would be perfect for hedging the portfolios in case of any market crash.
A quality growth stock in WELL Health
WELL Health operates a range of primary and telehealthcare facilities in Canada and the United States. The stock has gained over 6,900% since 2016 and more than 60% in the past year. But it still has tons of growth potential in the coming years.
Though the pandemic has significantly enhanced the performance of the health-tech industry, Well Health stock impressed even prior to COVID-19. The company aims to transform what it thinks is Canada’s existing obsolete healthcare facility, and therefore entered into a series of strategic acquisitions over the years.
These acquisitions have been hugely accretive to WELL Health’s revenue and earnings while providing it access to multiple business verticals like online pharmacy and virtual healthcare.
WELL Health has added 10 million new customers last quarter and is poised for robust growth in 2021 and beyond. It is soon expected to hit $400 million annual sales revenue and can potentially deliver 10-fold returns and command a premium valuation if it can sustain its current pace of making expansions.
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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Goodfood Market Corp.