The best Canadian stocks to buy right now are overlooked growth stocks. These are companies that are in a long-term growth trend while being relatively undervalued. That combination of cheap valuation and secure growth should unlock tremendous returns for patient investors over time.
Here are my top three picks for the years ahead.
Best Canadian cybersecurity stock
Earlier this year, a major cyberattack took a critical oil pipeline offline. Much of eastern coast of the U.S. was plunged into an energy crisis. Some suspect the attack was orchestrated by foreign states. The same is rumoured about the ongoing cyberattacks in Australia right now.
Regardless of who’s planning these attacks, it’s clear that governments and corporations need to invest more in securing themselves. Absolute Software (TSX:ABST)(NASDAQ:ABST) is at the forefront of this defensive trend.
The company provides end-point cybersecurity software. In other words, it offers tools that protect consumer devices like laptops, cell phones, and desktops from malicious cybercrime. As you can see, this is a market with tremendous demand right now.
Meanwhile, Absolute stock is trading at $15 a share and offers a 2% dividend yield. Its valuation is just $747 million, while its target market is worth hundreds of billions. In short, this could be an ideal growth bet for the years ahead.
Best Canadian Ethereum stock
I’m a firm believer that digital assets with the most utility will win over the long term. In other words, crypto is only valuable if it’s genuinely useful. So far, Bitcoin has proven useful as a “store of value.” But Ethereum is proving useful as a “decentralized layer of the entire internet.” That’s much more valuable, in my opinion.
While Ethereum’s market potential is larger, its market value is lower. That means it has more room to grow. Over the past five years, Ethereum’s total returns have far exceeded Bitcoin’s. Because of the law of large numbers. This trend could continue for the decade ahead.
CI Galaxy Ethereum ETF (TSX:ETHX.B) is a top pick. The exchange-traded fund represents ETH’s market performance. But unlike the digital asset, you can hold this ETF in your Tax-Free Savings Account (TFSA). That potentially means multi-bagger returns without the tax liability. Who can say no to that?
Best Canadian software stock
Topicus (TSXV:TOI) is my final pick on this list. At the time of writing, Topicus stock is up 6.5% today. Overall, the stock is up 111% since it was publicly listed in February this year. That performance represents growing investor awareness about this underrated gem.
The company focuses on acquiring vertically integrated software businesses across Europe. European tech startups are cheaper, which makes this strategy far more profitable over the long run. That’s what’s fueling Topicus’s epic rally in recent months.
Long-term investors seeking a reasonably priced tech growth stock to buy should add this to their 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 Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Topicus.Com Inc. The Motley Fool recommends Absolute Software Corporation.