3 Top Canadian Stocks to Buy Amid the Recent Pullback

The pullback in these three Canadian companies offers an excellent buying opportunity.

| More on:
online shopping

Image source: Getty Images

The improving corporate earnings appear to have raised investors’ confidence, driving the Canadian equity market higher. The Canadian benchmark index, the S&P/TSX Composite Index, rose 7.8% since the beginning of the fourth quarter. However, the following three Canadian high-growth stocks have witnessed a significant selloff during this period amid the concerns over rising inflation and bond yields. Meanwhile, the long-term growth prospects of these three companies still remain intact. So, the correction provides an excellent entry point for long-term investors.


Amid the recent selloff in tech stocks, Nuvei (TSX:NVEI)(NASDAQ:NVEI) has lost 13.2% of its stock value in this quarter and trades at a 30% discount from its September highs. Meanwhile, the company’s fundamentals are still strong, given the rising popularity of digital transactions due to increased online shopping adoption. In its recently reported third-quarter performance, its transactions grew by 88% to $21.6 billion, while e-commerce represented 83% of the volume growth.

The addition of new alternative payment methods to its portfolio, geographical expansion of its services, and acquisition of Simplex and Paymentez boosted its transactions. Its adjusted EBITDA and adjusted EPS increased by 97% and 147%, respectively. Meanwhile, the uptrend in Nuvei’s financials could continue. It recently received the license to service online betting and iGaming operators in Connecticut. Also, its recent partnership with some of the leading players in the industry could strengthen its position in the U.S. sports betting and iGaming space.

With around $288 million of cash on its books, Nuvei is well-equipped to fund its growth initiatives and strategic acquisitions. So, Nuvei could be an excellent addition to your portfolio.

WELL Health

Another tech stock that has witnessed a significant selloff is WELL Health Technologies (TSX:WELL). Since the beginning of this quarter, it has lost 11% of its stock value and trades 36% lower than its February highs. However, I believe the correction offers an excellent entry point for long-term investors amid the growing adoption of telehealthcare services and its improving financials.

In the recently reported quarter, WELL Health’s revenue grew by 711% to $99.3 million, driven by the acquisition of CRH Medical and MyHealth Partners and strong revenue growth from its virtual services. Its adjusted EBITDA also increased from a loss of $0.2 million in the previous year’s quarter to $22.3 million in profits. It was a fourth consecutive quarter of positive adjusted EBITDA, as its aggressive expansion strategy began to pay off.

Amid its continued acquisitions, WELL Health’s management expects to end this year with an annualized revenue and adjusted EBITDA run-rate of $450 million and $100 million, respectively. So, given its healthy growth prospects, I am bullish on WELL Health.


Cargojet (TSX:CJT) has lost 11.6% of its stock value this quarter amid the announcement of lower-than-anticipated third-quarter earnings. Its revenue came in at $189.5 million for the quarter, outperforming analysts’ expectations of $177.4 million. However, it posted a loss per share of $0.74, against analysts’ expectations of earnings per share of $1.31. The increased expenses due to higher fuel prices and crew costs weighed on the company’s margins.

However, Cargojet’s fundamentals are strong amid continued e-commerce growth and its competitive advantage. Meanwhile, the company enjoys a substantial share in the domestic air cargo volumes, given its unique overnight delivery service and a solid domestic network that connects 15 Canadian cities.

Also, it earns a higher percentage of revenue from long-term contracts, which is encouraging. Notably, it looks to expand its fleet size and has signed a deal to acquire three 767 aircraft, which could join the fleet next year. So, given its healthy growth prospects, investors should utilize the correction to accumulate the stock to earn superior returns.

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.

The Motley Fool owns shares of and recommends CARGOJET INC. and Nuvei Corporation. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

More on Tech Stocks

Growing plant shoots on coins
Tech Stocks

3 Growth Stocks That Look Ready to Double in 1 Year

These three growth stocks are "sleeping giants" ready to blast off in 2023 and beyond for investors who pick them…

Read more »

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 Top Tech Stocks That Could Make You Rich by Retirement

Here are three of the best Canadian tech stocks with attractive dividends that you can buy now to get rich…

Read more »

potted green plant grows up in arrow shape
Tech Stocks

2 Growth Stocks to Invest $1,000 in Right Now

Are you looking for growth stocks to add to your portfolio? Here are two top picks!

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Is Amazon a Black Friday Buy?

Last year, Amazon reported record Black Friday weekend sales. This year, the company has to contend with consumers who have…

Read more »

gaming, tech
Tech Stocks

Better Gaming Buy: Take-Two Stock or Electronic Arts?

Investors looking to add a gaming stock to their portfolios might consider buying Take-Two or Electronic Arts.

Read more »

A worker uses the cloud for paperless work. tech
Tech Stocks

2 Tech Stocks to Buy Before a Rebound in 2023

These two tech stocks with strong earnings and winning business models will likely lead the sector’s rebound in 2023 when…

Read more »

analyze data
Tech Stocks

3 Date Night Ideas That Could Actually Help You Invest

If you're missing out on this opportunity to invest in a down market, your date night ideas could be to…

Read more »

grow dividends
Tech Stocks

TFSA Investors: Here’s Where to Park That Higher $6,500 Contribution

Here's why TFSA investors may want to consider Shopify (TSX:SHOP) as a long-term holding in this growth-focused fund right now.

Read more »