This week, the Toronto Stock Exchange (TSX) announced the 2021 TSX30™ – the 30 best-performing stocks of the past three years. Financial institutions, small-cap challengers, and miners all topped the list. But here are the top three best performers that surged above the rest.
Best TSX stock #1
Aura Minerals (TSX:ORA), a little-known gold and copper miner, topped the list of best performers over the past three years. However, investors need to take a closer look at why this stock topped the list.
Aura stock is up 1,070% since September 2019 for a compound annual growth rate of 118%. But much of that gain was generated between October 2019 and September 2020. The stock surged as the world dealt with the pandemic and concerns about inflation pushed the price of gold higher.
Since 2020, the stock has been flat. That doesn’t mean it’s a dead-end, however. It’s now trading at just seven times earnings per share and offers an unbelievable 7.22% dividend yield. Some believe the price of gold and copper could keep rising higher, in which case this stock could resume its epic run. If not, at least it’s a dividend stock worthy of holding.
Best TSX stock #2
The second entry on this list is unsurprising: Shopify (TSX:SHOP)(NYSE:SHOP). No other Canadian tech stock has had this much success in this little time. Shopify went from a niche e-commerce play to the second-largest online shopping platform in the world in less than a decade.
Investors who got in early are sitting on tremendous profits. Shopify stock is up 5,450% since it was listed in 2016. However, its performance has slowed down in recent years as it grows larger. Since 2019, the stock is up just 840%. While that’s still a great run, the trend is clear: future growth will be lower.
At the time of writing, Shopify’s market value is $233 billion. Meanwhile, Jeff Bezos’ behemoth is worth roughly $2 trillion. In other words, Shopify could have a 1,000% gain ahead of it, but not much more. It’s now a mature company and investors need to be aware of this while adding it to their portfolio.
Best TSX stock #3
This list wouldn’t be complete without at least one financial stock. The banking and finance sector is one of the largest components of Canada’s economy, so investors should expect exceptional growth stocks here. Insurance giant Trisura Group (TSX:TSU) makes the cut. It’s the third-best performer since 2019, according to the TSX report. Trisura stock is up 523% since then.
The stock wasn’t very exciting before 2020. Then the pandemic happened, stocks crashed and Trisura had an epic rally. It’s is up 350% since late 2020. Despite that run, it’s still fairly valued. It trades at a price-to-earnings ratio of 34.
Insurance is a relatively safe and reliable business, which is why Trisura should be on your list if you’re concerned about the economic cycle plunging in the months ahead.
