These 3 TSX Stocks Are at 52-week Highs: Should You Buy?

Despite trading close to their peak, these three Canadian stocks still provide excellent buying opportunities.

| More on:
Dice engraved with the words buy and sell

Image source: Getty Images.

The Canadian equity markets have become volatile over the last few weeks due to concerns over rising inflation, a slowdown in economic recovery, and increasing COVID-19 cases. However, the following three Canadian stocks have continued their uptrend and are trading close to their 52-week highs. So, let’s examine whether buying opportunities exist in any of these three stocks.

Nuvei

Rising online shopping and increased adoption of the omnichannel selling model by SMEs have made digital transactions popular, benefiting Nuvei (TSX:NVEI). Apart from the growing addressable market, its strategic acquisitions, strong performance over the last six months, and geographical expansion have boosted its stock price. Meanwhile, the company currently trades close to its all-time high while returning over 125% for this year.

The surge in Nuvei’s stock price has also raised its valuation into the expensive territory, with its forward price-to-earnings multiple standing at 77.3. Despite its expensive valuation, investors over a two-year investment horizon can accumulate the stock, given its healthy growth prospects. It recently acquired Mazooma Technical Services and Simplex, which strengthened its position in the regulated online gambling and cryptocurrency space. Besides, the company is working on acquiring Paymentez, which could further expand its presence in Latin America. So, Nuvei’s outlook looks healthy.

Docebo

Another stock that is trading close to its all-time high is Docebo (TSX:DCBO)(NASDAQ:DCBO), which provides a highly configurable learnings management service (LMS) platform to organizations across industries. Its solid second-quarter performance, expanding customer base, and growing average contract value drove investors’ confidence, increasing its stock price. During the quarter, its top-line growing at 76%. Besides, the company earns around 92% of its revenue from recurring sources, which is encouraging.

Amid more organizations adopting digital tools to upskill their employees, Docebo’s addressable market is expanding. The management expects the LMS market to grow at a compound annual growth rate (CAGR) of 21% over the next five years. Meanwhile, the company is focusing on launching innovative products and expanding its geographical presence to increase its market share. It recently announced its plan to open a new office in Munich, Germany, which could boost its presence in the European market. So, given its high-growth prospects, I expect the uptrend in Docebo to continue.

NorthWest Healthcare Properties REIT

Third on my list would be NorthWest Healthcare Properties REIT (TSX:NWH.UN), which manages 190 healthcare properties underpinned by long-term inflation-indexed leases. Despite the pandemic, the company enjoyed high occupancy and collection rate due to its long-term agreements, government-backed clients, and highly diversified portfolio.

Meanwhile, NorthWest Healthcare strengthened its financial position by raising around $200 million in June. These funds would help the company in expanding its footprint in Europe and Australia. Currently, the company is working on acquiring the Australian Unity Healthcare Property Trust, which owns 62 properties with a healthy occupancy rate of 98%.

NorthWest has $350 million of projects currently under construction or approved stage. These investments could boost the company’s cash flows, thus allowing it to continue rewarding its shareholders with a high dividend yield. Currently, the company pays a monthly dividend of $0.0667, with its forward yield standing at an impressive 5.94%.

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.

The Motley Fool owns shares of and recommends Docebo Inc. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS and Nuvei Corporation. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

More on Investing