2 High-Growth TSX Stocks to Buy Today

Some of the best TSX growth stocks are on sale as the market pulls back. Here are two great growth stocks I would look at buying today!

| More on:
Mature financial advisor showing report to young couple for their investment

Image source: Getty Images

If you just started investing, you may feel a bit betrayed by the words “high-growth TSX stocks.” Since September, traditional TSX growth stocks (especially tech stocks) have not been “growing” at all. Instead, value and cyclical stocks are suddenly outperforming. For example, the S&P/TSX Capped Information Technology Index is down 11.4% since the start of September, whereas the S&P/TSX Capped Energy Index is up 21.6%!

Well, if you are a trader, this is undoubtedly a concern. Nobody can time what the market will do from day to day. However, if you are an investor in a real business with long-term growth prospects, here are some answers.

When it rains, put out the bucket

Warren Buffett famously said, “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.” Sure, there is a wall of worry to consider (rising bond yield, Chinese debt crisis, the U.S. government shutdown, and — oh yes — COVID-19, etc.). However, when worry outweighs optimism, long-term investors can snatch TSX growth stocks at better valuations.

Two high-growth stocks on the TSX that look attractive right now are BRP (TSX:DOO)(NASDAQ:DOOO) and Nuvei (TSX:NVEI).

BRP: A value-priced TSX growth stock

If you’ve felt pent-up during the pandemic, BRP has a solution to that problem. It manufactures and sells all-terrain and aquatic recreational vehicles. Some of its well-known brands include Sea-Doo, Ski-Doo, Can-Am, and Evinrude. Over the past five years, this company has delivered a pretty great 340% return.

In that time frame, this TSX stock has expanded revenues by a steady ~9% compound annual growth rate (CAGR). What excites me is that it has grown EBITDA and earnings per share by even faster CAGRs of 16.8% and 25.8%, respectively!

Today, this business is fairly cheap. It trades with a price-to-earnings (P/E) ratio of just 11 times. Certainly, BRP is a bit more cyclical than other growth stocks. It is also being pressured by supply chain challenges.

Yet, it just had an outstanding quarter with revenues and diluted earnings per share rising respectively 54% and 72% year over year. As the pandemic abates, a lot of people have discretionary cash. People are eager to get out, travel, and enjoy the outdoors again. That should continue to support strong demand for BRP’s products. As a result, I think this TSX stock will continue to kick out solid returns for many years ahead.

Nuvei: An ultra-growth TSX fintech stock

Nuvei is a relatively new stock on the TSX. It completed its initial public offering (IPO) just about this time last year. So far, it has performed resoundingly well. Over the past year, it is up nearly 200%!

It provides payment solutions to a broad array of merchants across the world. Nuvei has a purpose-built platform that caters across currencies, payment options, and even cryptocurrencies. It has a specific focus on high-growth verticals like gaming, gambling, e-commerce, fin-tech services, and travel.

Last year, it grew revenue, EBITDA, and normalized earnings per share by 87%, 86%, and 93%, respectively. In its most recent quarter, payment volumes increased year-over-year by 146% to $21.9 billion. Likewise, revenue grew year-over-year by 178% to $178 million. Adjusted EBITDA grew by 112% to $79 million. Right now, it produces a 45% adjusted EBITDA margin on revenues. However, as it scales its platform, management believes that could reach as high as 50%.

This means, with scale, this company could be extremely profitable. Management raised its 2021 outlook in the quarter, and it will soon be listing in the United States. This could be a catalyst to capture new shareholder attention. As a result, today is not a bad time to pick up some shares in this exciting TSX growth stock.

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 Robin Brown owns shares of BRP INC. The Motley Fool recommends Nuvei Corporation.

More on Tech Stocks

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Business man on stock market financial trade indicator background.
Tech Stocks

1 Growth Stock Down 50 Percent to Buy Right Now

There are plenty of growth stocks in the market worth considering, but Shopify (TSX:SHOP) looks like one of the best…

Read more »

Woman has an idea
Tech Stocks

Prediction: 1 Stock That Could Trounce the Market 

The TSX has been favouring tech stocks, but not this one. However, it has the potential to trounce the market…

Read more »

clock time
Tech Stocks

Long-Term Investing: 3 Top Canadian Stocks You Can Buy for Under $20 a Share

These three under-$20 stocks offer excellent buying opportunities for long-term investors.

Read more »

Businessman holding AI cloud
Tech Stocks

AI Will Transform Everything: Investors, Be Early Adopters and Buy These 3 Stocks

Investors looking to invest in companies doing big things in AI should consider these three stocks for their portfolios.

Read more »

stock research, analyze data
Tech Stocks

Forget Shopify: These Unstoppable Stocks Are Better Buys Today 

Should you consider buying Shopify stock while rivals consider a buyout or should you go for stocks with a stronger…

Read more »

A colourful firework display
Tech Stocks

2 Potentially Explosive Stocks to Buy in March

These two growth stocks are destined for many more years of market-crushing returns.

Read more »

edit CRA taxes
Tech Stocks

TFSA Millionaires Are Learning They Can Still Be Taxed

If you day trade stocks like Shopify (TSX:SHOP) in a TFSA, you may be taxed.

Read more »