The 3 Best Canadian Stocks to Buy This Month

With the market near all-time highs, long-term investors should have these three Canadian stocks on their radar this month.

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The Canadian stock market had a misstep in September, but it’s back to business this month. After posting a loss last month, the S&P/TSX Composite Index is already up more than 3% in October. That puts the index at a gain of close to 20% on the year.

As a long-term Foolish investor, I’m not letting the market’s high price stop me from investing today. After an incredible bull run that started in early 2020, we’re due for a larger correction at some point. But for the time being, there are plenty of top Canadian stocks trading at opportunistic discounts right now.

I’ve put together a list of three top picks I have on my radar this month. All three companies are very different, but they do have one thing in common. They’re all trading at discounts right now. I wouldn’t expect that to last for long, though, so now’s your chance to start a position. 

A high-priced Canadian stock on sale

Valued at a market cap above $200 billion, Shopify (TSX:SHOP)(NYSE:SHOP) is the largest public company in the country. Even at its size, though, investors are expecting many more years of monster revenue growth.

The Canadian stock is trading at a lofty price-to-sales ratio of almost 50. It has a steep price tag, because investors are banking on the market-beating growth to not slow down anytime soon.  

Shopify hasn’t ever been a cheap stock since it’s been trading on the TSX. And considering it’s coming off a quarter where revenue growth topped 50%, I don’t think value investors will be interested in this tech stock anytime soon.

If you were planning on starting a position in Shopify, now’s a good time. Shares are trading slightly above the market’s returns this year, but the tech stock is down more than 15% below all-time highs.

Investing in the growth of renewable energy

The entire renewable energy sector has trailed the market this year. After a strong performance in 2020, we’re seeing the sector unsurprisingly cool off this year. Still, many renewable energy leaders are enjoying market-beating gains when looking at a five-year horizon and longer.

Shares of Northland Power (TSX:NPI) are down 10% year to date compared to the market’s nearly 20% gain. The Canadian stock is up a market-beating 70% over the past five years, though. And that’s not even including its impressive 2.9% dividend yield.  

At a market cap just shy of $10 billion, this renewable energy stock is a leader in the growing space. 

If you’re looking to own a reasonably priced, dividend-paying company that also provides market-beating growth potential, Northland Power is a solid choice.

Another growing sector that’s full of bargains

Telemedicine was one of the hottest markets to invest in last year. The COVID-19 pandemic created a surge in demand for virtual doctor appointments. With hospital visits down from where they were last year, it’s not a surprise to see many telemedicine stocks below all-time highs right now.

WELL Health Technologies (TSX:WELL) is a top pick for long-term investors. The Canadian stock was a four-bagger in 2020 alone but is now trading more than 20% below all-time highs.

If you’re bullish on the massive growth opportunity of telemedicine in the coming years, I’m betting that this $1 billion company has lots more growth left in the tank.

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 Nicholas Dobroruka owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.

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