E-commerce platform Shopify is the largest publicly listed company in Canada with its $190.1 billion. The tech phenomenon is nice to own, except that the current share price of $1,926.59 is too steep. Besides, the gain in the preceding 12 months in only 41.41%.
If you were to scout the TSX for stocks with explosive returns in 2021, Nuvista Energy (TSX:NVA) and Capstone Mining (TSX:CS) stand out. The two small-cap stocks are significantly cheaper than Shopify, but their trailing one-year price return is over 340%. Buy the growth stocks now to earn substantial windfall like other investors the past year.
Nuvista Energy engages in developing, delineating, and producing condensate, natural gas liquids (NGL), oil, and natural gas reserves. The concentration of operations is in the Western Canadian Sedimentary Basin. Its market cap stands at $819 million.
Last year was forgettable given the significant 27% drop in revenue versus the full year 2019. Nuvista’s net loss was a staggering $197.8 million. The COVID-19 came at an awful time, because production volumes were already increasing. The losses could have been bigger if not for the turnaround in Q4 2020 and net earnings of $715.45 million.
Meanwhile, the share price dropped 91% to $0.25 on March 18, 2020, from a high of $3.10 in early January of the year. As 2021 progressed and financials were improving, investors’ interest returned. Nuvista gained momentum, then peaked at $4.10 on July 5, 2021.
As of August 31, 2021, the stock trades at $3.62 per share, or 347% higher than a year ago. Had you invested $20,000 then, the investment would be worth nearly $89,400 today. Year to date, Nuvista investors are happy with the 285% gain. In the nine months ended June 30, 2021, the picture is entirely different.
Nuvista Energy reported revenue growth of 74% versus the same period in 2020. The net earnings were $4.44 million compared to the net loss of $869.1 million. Based on analysts’ forecasts, the upside potential in the next 12 months is between 45% and 107%.
Bright outlook for copper
Capstone Mining’s bull rally is identical to Nuvista Energy. The mining stock sunk to as low as $0.35 on March 18, 2020, then slowly gained momentum in that it closed the year at $2.38, or 580% higher than its COVID low. A year later, the price soared to $6.33. As of August 31, 2021, Capstone trades at $5.55 per share, while the trailing one-year price return is 327%. The year-to-date gain is 133.19%.
The $2.28 billion base-metals producer from Vancouver owns two producing copper mines (U.S. and Mexico). Capstone has a 100% stake in Santo Domingo, a large-scale, fully permitted, copper-iron-gold project in Chile.
Capstone Mining is back in business following a dismal year. In the first half of 2021, management reported a 136% increase in revenue to $413.5 million versus the same period in 2020. Net income was $176.4 million compared to the $17.6 million net loss. With copper prices gradually rising, market analysts recommend a strong buy rating.
Hunt for great buys
Investors should spend time hunting for great buys on the TSX. Many small-cap stocks like Nuvista Energy and Capstone Mining fly under the radar. At lower share prices, the potential upside or returns could be more explosive than the top-tier Shopify. Don’t wait longer and buy one or both this September.
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 Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.