Canadian tech stocks that are well loved by the investing community won’t give you much time to think until the growth stocks run away from you. Here’s how some hot Canadian tech stocks’ performance compares with the Canadian stock market (using iShares S&P/TSX 60 Index ETF as a proxy) in the last year.
Data by YCharts.
Here’s a quick introduction to each tech stock and when to buy shares.
Converge Technology Solutions (TSX:CTS) stock has appreciated more than 600% in the last 12 months, greatly exceeding the market’s appreciation of 29%! It is a hybrid IT solutions company that is helping mid-market companies convert to cloud services. Since October 2017, it has completed 23 acquisitions with flying colours. For example, last quarter, it reported year-over-year revenue and adjusted EBITDA growth of 52% and 86%, respectively.
Converge’s products and services now include advanced analytics, managed services, cloud, cybersecurity, digital infrastructure, and IT talent recruitment. On top of its new expansion in Europe, it will carry on making acquisitions in North America.
The tech stock is a buy now. Investors should leave room to add to their positions should the stock retreat 10-20%.
Docebo (TSX:DCBO)(NASDAQ:DCBO) stock has climbed more than 200% in the last year, which is superb. It was a big beneficiary of the pandemic, because many employees shifted to working remotely at home for much of the workweek.
The tech company is focused on improving the e-learning experience. Its system allows its clients to deliver artificial intelligence-powered learning to their audience, create great learning content, see the impacts of the learning programs, and more.
Online training doesn’t just apply to employees. It can apply to customers and partners, as well. Some of Docebo’s clients include Amazon, Walmart, Netflix, OpenTable, etc.
Docebo stock is correcting this week, which could be a great opportunity to start buying the dip. If you’re worried about the continuation of the selloff, see if it’ll dip another 15-30% before buying.
Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) stock has also been a stellar performer, rising 134% in the last year. The commerce platform raised gross proceeds of US$716 million from treasury stock, without diluting existing shareholders, last month at an all-time high. The stock trades 25% higher from that level, which suggests the investing community remains very bullish on the growth stock.
Management indicated that the net proceeds will mostly go to strengthening its financial position and growing the company.
In the last quarter, LSPD reported tripling its revenue year over year. If you really want a piece of the growth company, start a position today. That said, it would be fabulous if investors could start buying on a correction of 20-40%. Let’s see if the market will give investors this opportunity.
Should you buy now or later?
If I did not own any shares of these hot Canadian tech stocks, I would start a position in Converge today, because it appears to be the best value of the three. Docebo can also have great growth potential given that its market cap is only about $3.4 billion. However, I would wait a little to see if there will be some momentum in its current correction. LSPD stock is the most expensive. So, I probably won’t buy it anytime soon. What will you do?
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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool owns shares of and recommends Amazon, Docebo Inc., Lightspeed POS Inc., and Netflix. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. Fool contributor Kay Ng owns shares of Amazon, Converge, and Netflix.