3 Top Stocks With 10X Potential

Looking for stocks that could produce massive gains? Here are three top stocks with 10X potential!

| More on:
edit Colleagues chat over ketchup chips

Image credit: Photo by CIRA/.CA.

Depending on how aggressively you invest, those interested in beating the market by a wide margin should look for companies with 10 times potential. It goes without saying that asking a stock to return 10 times your initial investment is very difficult to see through. However, there are certain companies that could pull of the feat. In this article, I discuss three top stocks with 10 times potential.

A 250% return less than a year after IPO

Nuvei (TSX:NVEI) has been an amazing performer since its initial public offering (IPO). On its first day of trading, the company made history when it closed the largest Canadian tech IPO of all time. This means Nuvei managed to raise more money on its opening day than popular growth stocks like Constellation Software, Lightspeed, and Shopify. Since then, it seems as though Nuvei stock has just continued to climb. Since its IPO last September, Nuvei stock has gained about 250%.

That means if you had invested in Nuvei’s IPO, you would already be a quarter of the way to seeing a 10 times return. At a market cap of about $23.5 billion, Nuvei still has a lot of room to grow in the coming years. One thing that may help Nuvei achieve the lofty 10 times goal is the fact that it operates within the digital payments industry. The rise of related industries like e-commerce could push companies like Nuvei forward. If you’re looking for a potential 10 times return from a TSX-listed stock, Nuvei would be my top pick.

Learning from a company that has produced 10 times returns

One thing that could help a company produce a 10 times return is to learn firsthand from a company that has managed to do that. Topicus.com (TSXV:TOI) finds itself in that very unique opportunity. Until last February, Topicus was a subsidiary of Constellation Software. If you’re investing in Canadian companies, there’s no doubt that you would’ve heard about its former parent company. Like Constellation, Topicus is an acquirer of VMS companies. Because the businesses of these two companies are so similar, Topicus will be able to directly apply some of the lessons it learns from Constellation.

Since its IPO, Topicus stock has already managed to return about 100%. Yet, the stock is only valued at around $5 billion. A 10 times return from here would place the company at a size of $50 billion. Although that would place the company at a larger valuation than the current Constellation Software, it’s certainly not out of the realm of possibility. With massive backing helping propel Topicus forward and an industry ripe for acquisition, this company has a solid chance of producing massive returns.

Be aware of the law of large numbers

The law of large numbers in a financial sense states that a company will not be able to sustain high growth rates as it gets larger. Therefore, investors have the best chance of seeing high returns from smaller companies as those businesses with a lengthier growth runway to work with. However, it’s important that investors choose smaller companies with a strong business outlook. I feel like that describes Goodfood Market (TSX:FOOD) very well.

The company operates in the online grocery and meal-kit industry. Before the pandemic, it already claimed about 40% of the Canadian meal-kit industry. With the widespread business closures and lockdown restrictions pushing Goodfood’s business forward last year, investors are more eager than ever to invest in this company.

While this is certainly a different take on the rapidly growing e-commerce industry, there’s no doubt that groceries are an essential part of life. Goodfood is at the forefront of innovation in that industry.

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 Shopify. The Motley Fool owns shares of and recommends Constellation Software, Lightspeed POS Inc, Lightspeed POS Inc., Shopify, and Topicus.Com Inc. The Motley Fool recommends Goodfood Market Corp and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.

More on Tech Stocks

Tech Stocks

Your Future Self Will Thank You for Buying Lightspeed Stock in 2023

Here’s why you may want to add LSPD stock to your portfolio in 2023 to hold it for the long…

Read more »

a person watches a downward arrow crash through the floor
Tech Stocks

Don’t Wait for a Market Crash: These 2 Top Stocks Are on Sale

Waiting for a market crash can take away the opportunity to buy early in the market rally while growth stocks…

Read more »

Coworkers standing near a wall
Tech Stocks

What’s Next for Magnet Forensics Stock After Hitting a 52-Week High Last Week?

While TSX tech stocks have lost around 30% last year, Magnet Forensics stock has soared 82%.

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Tech Stocks

Have $500? 2 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

Got $500 to invest? Consider buying these stocks that are too cheap to ignore.

Read more »

little girl in pilot costume playing and dreaming of flying over the sky
Tech Stocks

Got $1,000? Buy These Hot Growth Stocks Before They Take Off 

Growth stocks are best when bought at their lows or early in the rally. Now is the time to buy…

Read more »

Growing plant shoots on coins
Tech Stocks

2 Growth Stocks to Invest $100 in Right Now

Even with the market riding a bullish rebound, you don’t need a whole lot of cash to invest in growth…

Read more »

work from home
Tech Stocks

Could Lightspeed Stock Be a Big Winner in 2023?

Investors can capitalize on Lightspeed’s low valuation and benefit from the recovery in its price.

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Tech Stocks

TFSA Passive Income: How I’m Investing to Make $2,000/Year From Dividends

I am increasing my dividend income by investing in dividend stocks like the Toronto-Dominion Bank.

Read more »