Meta, the parent company of Facebook, is currently experiencing the worst fall since its inception. It’s almost 41% down, which is way worse than the 2018 or the 2020 dip the company experienced. Multiple factors have collaborated in the fall, including Facebook’s struggles with the European market, a fall in Facebook users and a corresponding rise in TikTok, and the company’s earnings.
However, even if the growth has stopped, the massive user base remains, and once this phase is over, Facebook is likely to recover its former growth phase. But it’s not the only tech company Canadian investors should consider when they are out to buy in the tech dip. There are two TSX stocks that might prove better candidates.
A communication service company
It only took the world a couple of decades to switch over almost completely from landlines for mobile phones and VoIP. And the communication is still underway, with virtual meetings replacing physical ones and remote work on the rise. Companies like Sangoma Technologies (TSX: STC) are the heart of these changes.
Sangoma offers its B2B clients a wide variety of communications solutions, including VoIP business phone systems and team collaboration solutions. It has now rebranded itself as a cloud company and accumulated a variety of services under one, Sangoma Cloud. It also has an aggressive acquisition strategy and has acquired 10 companies in the last decade, which has also allowed it to expand its customer base, which is already over 30,000 strong.
Sangoma has been a great growth stock for a while. Between Feb. 2017 and Feb. 2021, the stock grew by over 1,000%. But it has experienced a steady decline since hitting that peak, and it’s already trading at a 48% discount. But its growth and underlying fundamentals remain the same, and you should consider buying it before it starts reversing its course.
A remote learning platform
Many businesses realized the importance of remote learning platforms like Docebo (TSX: DCBO)(NASDAQ: DCBO) during the pandemic, which allowed them to keep training and to groom their employees, even when everyone was working remotely. Docebo’s learning technology has already attracted over 2,000 customers around the globe.
Between its inception in 2019 and its peak in 2021, the stock grew more in two years than many companies do in a decade. The company grew its market valuation by over 700%, which includes the post-pandemic growth boost.
However, the company has been in the correction phase since Oct. 2021 and has already fallen over 37%. Once it reaches the depths that it’s aiming for, it should be snatched up, because if it can offer half the growth in the next two years than it did before, it would be growing your capital much faster than Meta probably will.
Foolish takeaway
The U.S. tech giants offer a level of stability that’s not found in relatively small Canadian tech stocks. But the latter, ironically, by virtue of their size (in part), offer a more aggressive growth potential that can be transformative for your portfolio. And now, when the TSX tech sector bear market is gaining momentum, you should identify and invest in the right prospects.
