Forget Facedrive Stock: 2 Growth Stocks to Buy Instead

While Facedrive stock may be down by more than 95% from its high reached earlier this year, I’d avoid the stock while it’s still overvalued.

| More on:
Choose a path

Image source: Getty Images

Facedrive (TSXV:FD) stock has been on the move again lately, but not in the way investors would want. The stock is down 15% in early Wednesday trading, following a 10% decline on Tuesday and a 30% fall Friday.

That marks a 97% fall for Facedrive stock since it hit its all-time high earlier this year.

Any time a stock falls by that much, it’s worth considering as an investment. While the stock has been overvalued all year, and me and many of my fellow Fools have warned investors to avoid the stock, now that it’s gotten cheap, it’s worth another look.

At a current market cap of $200 million, where it closed Tuesday, the stock certainly looks closer to fair value than it’s been all year.

However, Facedrive stock faces a lot of challenges ahead. Plus, it still looks overvalued compared to its much larger competitors on a price-to-sales basis. Furthermore, you don’t want to try to catch a falling knife, especially while it’s in a rapid downward trend.

So, rather than speculate on Facedrive’s stock price in the short term, here are two of the best Canadian growth stocks to buy instead.

A top crypto stock for long-term investors

In addition to the fact that Facedrive stock has been overvalued all year, another issue for investors is that it’s a small player in an industry dominated by a few giants. Not only that, but both of those major competitors have yet to reach profitability consistently, which doesn’t look promising for a business like Facedrive.

That’s why instead, I’d look to buy high-quality growth stocks like Galaxy Digital Holdings (TSX:GLXY).

Not only do I think the cryptocurrency industry offers more growth potential than a ride-sharing stock like Facedrive, but it’s also one of the most dominant companies in its industry, making it a much better long-term investment.

Galaxy offers a unique investment that gives investors tonnes of exposure and diversification to the cryptocurrency space. This is ideal because you still have all the opportunities for growth but also a business that’s been built to be a lot more sustainable through the ups and downs of the crypto market cycle.

This makes Galaxy one of the smartest growth stocks to buy today. So, rather than considering Facedrive stock, a company that’s lost 97% of its value in just half a year, Galaxy Digital is a much better choice today.

Forget Facedrive: This growth stock offers far more potential

Another top growth stock that I’d look to buy instead of Facedrive is Drone Delivery Canada (TSXV:FLT). Drone Delivery Canada is one of the cheapest growth stocks you can buy.

The company has a market cap of just $250 million, offering some significant potential for growth over the coming years. Drone Delivery is still an early-stage company, similar to Facedrive stock in a lot of ways.

However, it’s an industry that offers far more potential for growth, and there aren’t massive businesses that are already dominating.

Drone Delivery has had to do all the hard work to get its operations off the ground itself. This includes years of testing both to optimize its drones’ performance but also to receive the certifications possible to operate.

This puts it in a prime position going forward, especially with all the opportunities for drone technology in several industries.

The company believes its drones can be used for delivery purposes in healthcare, mining, energy, transportation, and even industrial industries.

So, if you’re looking for a cheap growth stock that has years of growth potential, I’d forget about Facedrive and strongly consider a stock like Drone Delivery Canada.

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 Daniel Da Costa owns shares of Galaxy Digital Holdings Ltd. The Motley Fool has no position in any of the stocks mentioned.

More on Stocks for Beginners

Man with no money. Businessman holding empty wallet
Stocks for Beginners

Canadians Investors: How to Know When We’ve Hit a Recession

A recession is coming in 2023, but what does that even mean? And how can investors protect themselves before it…

Read more »

man slides
Dividend Stocks

TFSA Investors: Where to Put That New $6,500 Contribution Room

These stocks may be trading high, but they still offer value for TFSA investors seeking out the best stocks to…

Read more »

A bull and bear face off.
Stocks for Beginners

3 Cheap Stocks I’d Buy Before the 2023 Bull Market Arrives

Investors seeking out value should consider these cheap stocks, which could be some of the best stocks to buy before…

Read more »

Financial technology concept.
Tech Stocks

Is Now the Right Time to Buy Growth Stocks?

After interest rate hikes halved growth stocks in 2022, there are signs of recovery as rate hikes slow. Should you…

Read more »

money cash dividends
Dividend Stocks

The Best Stocks to Buy With $1,000 Right Now

These two companies are among the best stocks on the TSX today if you're looking for strong returns, passive income,…

Read more »

runner ties shoe while stopped on grass outside
Stocks for Beginners

TFSA Investors: 10 Stocks Every Canadian Should Own in 2023 [PREMIUM PICKS]

Motley Fool Stock Advisor's yearly list of "Starter Stocks" is our attempt to answer a simple question: “Where do I…

Read more »

A close up image of Canadian $20 Dollar bills
Stocks for Beginners

The Smartest Stocks to Buy With $20 Right Now

A volatile 2022 has discounted some stellar long-term picks. Here are some of the smartest stocks to buy now with…

Read more »

risk/reward
Tech Stocks

TFSA Investors: Why You Should Invest Your Room ASAP in These 2 Stocks

Here’s what you can do with your additional $500 TFSA contribution room. Invest it in super cheap stocks with hyper-growth…

Read more »