It’s nice to see stocks reach new all-time highs. However, that doesn’t happen every day. In the short term, even great companies could see their value decline. In fact, sometimes great stocks will see extended periods of volatility, as investors struggle to agree on a company’s value. However, as long as nothing has materially changed regarding a company, and if investment theses still hold, then investors should welcome dips with open arms. It could give you a great entry point or the chance to add more shares at a discount.
The e-commerce industry should help this company succeed
When businesses were forced to shut down in-person operations last year, consumers turned to online grocery services. As a result, companies like Goodfood Market (TSX:FOOD) saw massive increases in valuation. However, investors are starting to doubt the growth that companies like Goodfood Market have experienced over the past year. Many believe that the extreme growth rates experienced by these companies will never return, once the pandemic is a thing of the past.
Even if Goodfood Market doesn’t grow as fast as it did last year, investors should still believe in the long-term growth story here. There’s no denying that the online retail industry is much stronger today than it ever has been before. In addition, Goodfood Market continues to gain a greater share of the Canadian meal kit industry. It’s estimated that the company claims a 40-45% of that industry.
Goodfood Market is a founder-led company in its high-growth stage. The stock certainly needs to cool off after a red-hot 2020. However, its growth story is far from over.
A stock I really believe in
Brookfield Renewable (TSX:BEP.UN)(NYSE:BEP) is a company that I believe will continue leading the renewable utility sector for years to come. Today, it operates one of the largest renewable utility portfolios in the world, with facilities capable of producing more than 21,000 MW of power. Upon the completion of its current construction projects, Brookfield Renewable estimates that it will be able to generate an additional 31,000 MW of power.
Since the start of the year, Brookfield Renewable stock has fallen about 16%. That is in stark contrast to the stock’s performance over the past two years. From 2019 to the start of 2021, Brookfield Renewable stock gained more than 200% (dividends excluded).
Despite the stock’s struggles this year, Brookfield Renewable has managed to generate an annualized return of 18% since its inception. In addition, the company remains an excellent dividend company, increasing its distribution at a CAGR of 6% over the past decade. Brookfield Renewable Stock may have gotten ahead of itself at the end of last year, but this company certainly has a bright future.
This company won’t stay this cheap forever
The final stock that investors should take note of is Docebo (TSX:DCBO)(NASDAQ:DCBO). The company provides a cloud-based and AI-powered eLearning platform to enterprises. Docebo gained widespread popularity when businesses around the world realized that its offerings would serve as a suitable solution to the issues caused by the COVID-19 pandemic.
Since its IPO in October 2019, Docebo stock has gained more than 600%. However, investors often have a short-term memory when it comes to falling stocks. Over the past two months, Docebo stock has fallen about 20% and left a sour taste in the mouths of investors. However, this company continues to grow and increase its reach within the enterprise space. Investors should continue to focus on the long term and remind themselves of how quickly Docebo stock managed to rebound after falling nearly 40% at the start of the year.
