The TSX remains in record territory as of writing on November 16, 2021, despite closing lower than its fresh high of 21,768.50 two days ago. Many growth investors continue to scout the market for some compelling buys. If you’re shooting for massive gains, three momentum stocks could go gangbusters this month.
HIVE Blockchain Technologies (TSXV:HIVE)(NASDAQ:HVBT), NexGen Energy (TSX:NXE), and Village Farms International (TSX:VFF)(NASDAQ:VFF) are probably in the year-end buy lists of Canadian investors. The share prices are relatively cheap vis-à-vis their upside potential.
Ascending like Bitcoin
HIVE has mirrored Bitcoin’s performance thus far in 2021. The world’s most popular cryptocurrency currency has been trading above US$60,000 since October 15, 2021. Meanwhile, the TSXV crypto stock has gained by 875% in one year. At $5.07 per share, the year-to-date gain is 112.13%.
Bitcoin’s ascent starting in mid-June this year was driven by mainstream adoption of digital currencies, notwithstanding the ban in Chine. The launching of futures-based Bitcoin exchange-traded funds (ETFs) in the U.S. was a big boost for crypto loyalists. As Bitcoin regains strength, HIVE becomes more attractive to investors wanting exposure to Bitcoin but minus the extreme volatility.
The $1.95 billion cryptocurrency mining firm monetize newly minted crypto coins for revenue and cash flow. Unlike Bitcoin, investors have financial statements to review or analyze before investing. Your exposure would be in the operating margins from crypto mining and not direct ownership in Bitcoin.
High growth with inherent risks
NexGen Energy is a $3.15 billion exploration and development company that boasts high-impact projects. It operates in the large-scale southwestern Athabasca Basin, where it owns vast lands (199,576 hectares). The expertise, however, is in the evaluation of uranium properties.
Interestingly, NexGen is among TSX’s high flyers with its 88.03% year-to-date gain. At $6.60 per share, the trailing one-year price return is 175%. Market analysts recommend a strong buy rating and sees a further climb to $9.26 (+40.34%) in 12 months. This energy stock is obscure but not a mediocre performer. The total return in the last 8.57 years is 1,733.33% (40.41% CAGR).
Still, you must understand the high degree of risk before investing in NexGen. Among the hurdles are obtaining adequate capital for exploration of minerals and project developments.
Bargain stock
Village Farms International is a bargain at $10.91 (-15.36% year to date). Also, the 12-month average price target of market analysts is $21.34 — a 95.6% return potential. This $935.05 million greenhouse grower and now cannabis producer made it to the TSX30 growth stocks list in two of the three editions. It ranked 13th in 2020 and third in 2019.
The compelling reason to invest in Village Farms is its 30-year experience as a vertically integrated Controlled Environment Agriculture (CAE) pioneer. It is well positioned to leverage its expertise to gain entry into new, large markets or capitalize on high-value, plant-based consumer product opportunities.
Management’s specific focus is on cannabinoid (high- and low-THC) and related health and wellness opportunities. The target market is North America, Europe, and the Asia-Pacific region. In Q3 2021, Village Farms reported 59% and 140% growths in total gross sales and net income versus Q3 2020.
Potential explosion
The three stocks can potentially explode and sustain their upward momentum. However, you must be aware of the inherent risks to the respective businesses.
