As a growth investor, I’m always looking for opportunities to add to strong positions or to new companies that could bolster my portfolio. I tend to follow Foolish investing principles, as those have proven to lead to financial success over the long term. As such, I don’t worry about stocks trading at all-time highs. In fact, I welcome it and expect those companies to continue experiencing success in the coming years. In this article, I discuss three stocks I plan on buying in the future.
This stock is already one of my largest positions
As a millennial, Shopify (TSX:SHOP)(NYSE:SHOP) is a company I can relate to very well. I’ve been lucky enough to grow up at time where e-commerce has gone from very little penetration to becoming a staple in our everyday lives. Even though e-commerce is so prominent today, the industry still has a lot of room to grow.
For example, in 2019, e-commerce accounted for just 4% of all retail sales in Canada. By April 2020, the industry represented 11% of all Canadian retail sales. This increase in online traffic was reflected in Shopify’s earnings reports through Q2 to Q4 of 2020. The company reported year-over-year increases in quarterly revenue of 97%, 96%, and 94%, respectively. With many countries still underrepresented in terms of e-commerce penetration, Shopify’s growth runway is still very attractive.
After a sluggish start to the year, Shopify stock has managed to climb about 35% so far this year. It currently trades about 9% down from its all-time high. With a market cap of $235 billion, this stock likely won’t achieve 10 times growth over the next decade. However, it still has the potential to make investors very happy.
A reliable compounder of wealth
Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) has been one of the best-performing stocks on the TSX over the past two and a half decades. Since August 1995, Brookfield stock has gained 4,518%, which represents an average annual return of 15.8%. To put that into perspective, a $10,000 investment made at that time would be worth about $462,000 today. Over the same period, the TSX has managed to generate a total return of 349.8%.
Although Brookfield Asset Management likely isn’t considered a growth stock by many, it has shown that it has the ability to compound returns over the long term. Focused on investing in real assets, Brookfield does announce very exciting plans from time to time. Recently, it unveiled its plan to develop North America’s largest sustainable neighbourhood in partnership with Tesla.
A small growth stock with room to grow
The third stock I plan on buying in the future is Topicus.com (TSXV:TOI). For those who are unfamiliar, an investment in Topicus is essentially like investing in a very young Constellation Software. Like the larger company, Topicus is an acquirer of vertical market software companies. Where it differentiates itself is its focus on the highly fragmented European technology industry.
Since its Initial Public Offering (IPO) in February, Topicus stock has already managed to gain 110%. At a market cap of $5.3 billion, the company still has an incredible amount of room to grow. For perspective, Constellation Software has a market cap of $47 billion. It would require a 9X from here for Topicus to reach the same valuation.
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 Jed Lloren owns shares of Shopify and Tesla. The Motley Fool owns shares of and recommends Brookfield Asset Management, Constellation Software, Shopify, Tesla, and Topicus.Com Inc. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.