Choosing the best growth stocks isn’t an easy task. Indeed, today’s market happens to be filled with hyper-growth stocks — or, at least, companies that claim to be.
That said, the TSX happens to have some great growth stocks to choose form. These companies are ones that have been proven to be wealth compounders over time. Additionally, these companies happen to have some rather lucrative long-term growth prospects.
Here are three of my top growth-oriented picks for September.
Top growth stocks: Shopify
One of the go-to investments for Canadian seeking e-commerce exposure continues to be Shopify (TSX:SHOP)(NYSE:SHOP). Indeed, this is perhaps the pre-eminent Canadian technology pick right now. As a company uniquely exposed to the growth e-commerce provides, Shopify shares have vastly outperformed the market.
In fact, over the past five years, Shopify has been a 35-bagger. That’s some incredible performance.
However, the catalysts that took Shopify to these heights haven’t dissipated. E-commerce growth continues to surge, fueling a 110% year-over-year revenue increase for Shopify this past quarter.
For those who expect the e-commerce train to keep rolling, Shopify is a world-class pick.
Another top wealth compounder over the long term has been Constellation Software (TSX:CSU). This consolidator of the fragmented software space has provided what could only be described as incredible performance over the long term.
How has Constellation done this?
Well, a series of well-judged and well-timed acquisitions are at the core of Constellation’s impressive valuation growth. Currently, Constellation Software holds a valuation around $46 billion. This valuation is the result of hundreds of acquisitions of smaller software players over the years. By integrating these companies into Constellation’s portfolio, the parent company has been able to increase aggregate returns for the portfolio, boosting shareholder wealth.
This sort of growth is uncommon over such a long period of time. However, Constellation has proven the company knows what it’s doing in terms of M&A. Those bullish on the ability of Constellation to continue to do what it has been doing for years ought to consider this one of the top growth stocks to buy right now.
Sticking with the software space, Open Text (TSX:OTEX)(NASDAQ:OTEX) remains another top pick. Indeed, this company’s long-term growth has been equally impressive. Accordingly, this has been a stock that’s been on my watch list for some time.
This Waterloo-based organization develops, designs, markets, and sells information management solutions and software. Open Text has grown its business via aggressively integrating acquisitions into its portfolio. Similar to Constellation, this is a company that has both acquired growth as well as grown organically.
This sort of business model is extremely attractive to me. I think Open Text stock has a lot more room to run, given its relatively muted move in 2021.
This September could be the start of another rally in hyper-growth stocks, should monetary policy stay accommodative. Accordingly, investors seeking top growth stocks should certainly have a look at this list.
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 Chris MacDonald has no position in any stocks mentioned in this article. The Motley Fool owns shares of and recommends Constellation Software and Shopify. The Motley Fool recommends OPEN TEXT CORP and Open Text and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.