Since mid-November, growth investors have seen stocks plummet. Unfortunately, this means that portfolios have been hit hard as well. Through much of this week, it seemed like growth stocks were starting to recover. Many popular names posted great returns to start the week. However, on Thursday, investors were met with one of the rougher days in recent memory. In fact, Shopify (TSX: SHOP)(NYSE:SHOP) has already given back most of what it recovered to close out January.
With the end nowhere in sight with respect to this market correction, what should investors do? In this article, I’ll focus on Shopify and Nuvei (TSX: NVEI)(NASDAQ: NVEI) and give my take on whether investors should buy, hold, or sell.
Is it time to buy Shopify stock?
Shopify is a stock that investors should be watching closely. Coming into this year, the stock had gained nearly 4,900% since its May 2015 IPO. That makes it a major winner, and one that every Canadian growth investors should have had in their portfolio. However, since the start of the year, Shopify stock has fallen nearly 34%. Since hitting its all-time highs in November 2021, Shopify stock has lost more than 51%! With that in mind, what should investors do now?
I believe investors should take this opportunity to add Shopify to their portfolios. In fact, I’ve made it my top growth stock pick for 2022. When it comes to online shopping, it’s hard to ignore the trajectory the industry is on. Since 2018, e-commerce penetration has accelerated greatly in many different regions around the world. Over the Black Friday-Cyber Monday weekend alone, Shopify stores sold US$6.3 billion worth of merchandise. With 1.16 billion monthly unique customers visiting Shopify stores and a customer list that boasts the likes of Netflix, it’s hard to stay away from this growth stock.
What should investors do with Nuvei?
Nuvei is an interesting company to consider. Much like Shopify, and before the ongoing market correction, Nuvei stock had performed very well since its IPO. In its first year of trading, Nuvei stock had gained nearly 300%. Unfortunately, two major drivers have caused Nuvei stock to drop nearly 60%.
First, it was hit by a short report from Spruce Point Capital Management. Fortunately for Nuvei, analysts seemed to agree that the short report wasn’t worth much weight. However, the ongoing correction has hindered Nuvei stock from recovering at all. With this in mind, what should investors do today?
I believe Nuvei is still a great growth stock to hold in your portfolio. The company’s omnichannel payments solution allows merchants to accept online, mobile, in-store, and unattended payments. That breadth in Nuvei’s offering is what separates it from its competitors. To date, Nuvei has a presence in more than 200 global markets. This indicates that Nuvei is also well positioned to grow alongside the emerging e-commerce and online betting industries.
