2020 was the year to turn $100 into $1,000. By comparison, 2021 has been a lot trickier for growth investors. Some growth stocks have lost more than half their value this year, and there seems to be more pain ahead.
Nevertheless, the recent pullback has also created some opportunities. Growth stocks are now much more reasonably valued. That means a long-term investor can make a confident bet on some emerging themes.
With that in mind, here are the top three multi-bagger opportunities that should be on your watch list.
Growth stock #1
WeCommerce Holdings (TSXV: WE) is an interesting e-commerce play that looks like a multi-bagger. The company acquires small software tools and service providers within the Shopify ecosystem. Think theme designers, software tools, and marketplaces for Shopify merchants.
The company’s chairman and founder Andrew Wilkinson is a well-known Canadian tech entrepreneur. Over the years, Wilkinson has acquired over 35 small internet companies, ranging from digital marketing agencies to e-commerce app developers. The portfolio is a collection of niche problem solvers that benefit from Shopify’s growing dominance.
WE stock has plunged over 60% this year, which creates an opportunity, in my opinion. After all, this is a $340 million company in a trillion-dollar global industry that’s growing by double digits every year.
Growth stock #2
A list of potential multi-baggers would be incomplete without at least one crypto company on it. That’s why Voyager Digital (TSX: VOYG) is my second pick. Bitcoin and Ethereum are trading at all-time highs right now, which has spurred demand for Voyager’s trading app and crypto services.
Voyager’s mobile app is quickly becoming one of the most popular crypto trading platforms for retail investors. Recent acquisitions have also helped the company provide fiat-to-crypto conversions and staking rewards on crypto holdings.
The stock is up 120% over the past three weeks! It’s now a $4 billion juggernaut. But it has much more room to grow if the digital assets space continues to explode at its current pace.
That’s what makes Voyager a potential 10-bagger stock.
Growth stock #3
Topicus.Com (TSXV: TOI), the last pick on this list, is the most robust. Spun off from one of Canada’s most successful enterprise software firms, Topicus is focused on niche software startups in Europe. The company acquires these businesses to steadily expand its stream of recurring cash flow from subscriptions.
Topicus stock is up 104% year to date. Considering the size and growth rate of the global software industry, it has plenty of room to grow further. The company is on track to generate roughly $124 million in free cash flow this year. Acquisitions and organic growth could boost that next year. This steady compounding could generate multi-bagger returns.
If you’re a long-term growth investor, this rare, cash flow positive tech stock deserves to be on your list.
