Top Picks: 2 Low-Key, High-Growth Stocks Over Lightspeed Commerce

Two low-key names are the top high-growth prospects while a high-profile tech stock remains under fire in 2021.

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Did Lightspeed Commerce, an e-commerce Software-as-a-Service (SaaS) platform, violate securities law? The high-profile tech name is the subject of an investigation by the Schall Law Firm. Some parties allege that Lightspeed issued false or misleading statements and failed to disclose pertinent information to investors.

No class action suit has been filed so far, although it’s hurting Lightspeed. While the shares are still up 37.46% year to date, the price has sunk 21.2% in the last 30 days. If you’re looking for other high-growth prospects, two low-key stocks are your best bets.

EcoSynthetix (TSX:ECO) and Tecsys (TSX:TCS) are worth looking into because both are TSX30 winners for 2021. They are in the company of Aura Minerals, Shopify, and Trisura Group as TSX’s top growth stocks. EcoSynthetix ranks number 14, while Tecsys is in the 25th spot.

Niche player

EcoSynthetix is a $332.42 million renewable chemicals company that specializes in bio-based materials. These materials are valuable inputs in a wide range of end products. Its flagship products, Ecosphere biolatex and DuraBind biopolymers, are widely used globally, particularly in the paper and paperboard packaging industries. 

Management’s long-term growth strategy is to penetrate the global paper and paperboard market. The company also plans to develop additional applications in new sectors through an accelerated R&D effort. More important, customers can significantly reduce their carbon footprint through Eco Synthetix’s green technology platforms.

EcoSynthetix’s competitive advantages are stable pricing and comparable, if not superior, product performance versus traditional chemicals. Its CEO, Jeff MacDonald, emphasizes, “Our primary focus is delivering meaningful growth in the wood composites end market as part of our multiple shots on goal product strategy.”

The growth-oriented company is in the red in Q2 2021, although it was a great quarter nonetheless. MacDonald said increased volumes and higher pricing drove top-line growth. EcoSynthetix’s net sales grew 58% to US$4.9 million versus Q2 2020.

MacDonald adds, “We believe this growth driven by the diversification of the business is the beginning of a sustainable, long-term trend.” Regarding stock performance, EcoSynthetix outperforms with its 53.66% year-to-date gain. At $5.67 per share, the trailing one-year price return is 87.75%.

Emerging tech superstar

Tecsys is an emerging tech superstar, no doubt. While the year-to-date gain is modest (+10.82%), the tech stock carries a buy rating from market analysts. They forecast the price to climb from $54.99 to $65.40, or a potential upside of 18.9% in the next 12 months. Also, this tech stock pays dividends (0.46%), a rarity in the IT sector.

The $843.33 million company from Montreal develops, markets, and sells supply chain management software, locally and internationally. Apart from system enhancements and cloud services, Tecsys offers its customers implementation, support, and advisory services.

Tecsys’ website boasts that its solutions and services create clarity out of operational complexity with end-to-end supply chain visibility. The benefits to customers are lower operating costs, improved customer service, and uncovering of optimization opportunities.

Business is thriving, as evidenced by the financial results in Q1 fiscal 2022 (quarter ended July 31, 2021). SaaS revenue and SaaS subscription bookings climbed 47% and 54% versus Q1 fiscal 2021. Also, it was the 10th consecutive quarter of record revenue. According to Peter Brereton, Tecsys’ President and CEO, it’s a very positive start to fiscal 2022.

Buy now

Growth investors should take positions in EcoSynthetix and Tecsys now before their prices soar through the roof.  

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Lightspeed POS Inc., Shopify, TRISURA GROUP LTD, and Tecsys Inc. 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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