The TSX is on a roll in November 2021, ending higher in each of the last six trading sessions. Barring earthshaking news, it could breach 21,600 easily. Because the oil slump is over, and commodity prices are recovering, energy is on track to be this year’s top-performing sector.
Technology stocks were the market movers in 2020, but took a hiatus in 2021. Still, the sector is fourth best after the energy, real estate, and financial sectors. Next year should be exciting, because basic materials, where mining stocks belong, could be the top performer. Energy could remain steady but probably won’t be as red hot as it is today. Thus, I predict that either tech and mining stocks will explode in 2022.
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Sector representation
The 2021 TSX30 List featured 14 mining stocks and five tech constituents. The largest publicly listed company in Canada, Shopify, was the number one growth stock in 2020, but it placed second this year. Aura Minerals took the top spot with its 1,125% return in the last three years.
Only four companies made it in all three lists since the TMX Group launched the flagship program in 2019. Shopify is one, while Wesdome Gold Mines makes it dead even at one apiece for technology and mining. Ballard Power Systems and Cargojet, from the industrial sector, round up the perennial winners.
Tech super team
Shopify is the face of TSX’s tech sector, although there are emerging superstars. In the fintech space are goeasy (seventh), Real Matters (16th), Absolute Software (24th), and Tecsys (25th). These tech firms are high-growth stocks, owing to the 181% or more total returns in the last three years.
However, if I were to invest right now, I’d pick Converge Technology Solutions (TSX: CTS). Besides the trailing one-year price return of 276.03%, the share price is relatively low at $10.98. Current investors are up 120.93%, and market analysts recommend a strong buy rating.
The $2.33 billion Toronto-based firm provides advanced analytics, cloud, cybersecurity, and managed services globally. Converge has strategic alliances with Amazon Web Services, Google Cloud, Microsoft Partner, IBM, and Dell, among others.
Surging mining stocks
As of November 9, 2021, investors TSX30 winners Aya Gold & Silver (+120.52%), Victoria Gold (+56.03%), Ivanhoe Mines (+42.27%), and Wesdome (+19.40%) have enjoyed gains. However, top-ranked Aura Minerals is down 16.58% year to date. But I would say that Capstone Mining (TSX: CS) is the exciting pick among them.
The mining stock ranked fifth on the TSX30 owing to its +433% three-year performance. It trades at $5.06 per share, a year-to-date gain of 112.61%. Market analysts are bullish and recommend a strong buy rating. Their 12-month average price target is $7.14, or a 41% upside potential.
The $2.1 billion company from Vancouver operates in Canada, Chile, Mexico, and the United States. Capstone explores for and produces base metals such as copper, gold, silver, lead, zinc, and gold deposits. Mining operations are returning to normal, as evidenced by its operational and financial performance after three quarters in 2021.
Capstone reported an 89.4% increase in revenue to US$578.9 million versus the same period in 2020. Its net income soared to US$185.4 million compared to the US$15.1 million net loss. The company generated US$458.9 million cash flow from operations — 475.1% year-over-year growth.
Explosive returns
Tech or mining stocks are great year-end buys in preparation for explosive returns in 2022. Either sector or both could be the top performer next year.
