Investing in growth stocks is one way you can accelerate your way to financial independence. However, in some years, like this one, it may not really feel that way. In fact, many of the most popular growth stocks still trade more than 30% lower than their all-time highs. During times like these, it’s important for investors to keep a cool head and continue investing as they normally would. When stocks recover, you’ll notice your portfolio grow much faster. Here are three top growth stocks to buy in March 2022.
Canada’s top growth stock is offering a massive discount
As of this writing, investors still have the opportunity to buy Shopify (TSX:SHOP)(NYSE:SHOP) shares at a massive discount. It currently trades more than 50% lower than its all-time highs. When looking at Shopify’s recent stock performance, investors need to keep the big picture in mind. There are two reasons why Shopify’s stock has fallen so heavily. First, being a potential increase in interest rates. Second, the company announced that it expects its growth rate to decelerate to pre-COVID numbers.
Taking a deeper look at these two main drivers for Shopify stock’s decline, it’s clear that neither should have long-term impacts on the company. Yes, higher interest rates make it more difficult for companies to grow. However, Shopify is already a profitable company. Therefore, it shouldn’t need to borrow much capital to fund its growth. Second, Shopify’s growth rate before the pandemic was fairly high in the 30-40% range. It was completely unreasonable to expect the company to sustain an 80% year-over-year growth rate after the pandemic.
Shopify has been a major stock market winner since its IPO. I believe the best is yet to come.
This stock could be a massive winner
Topicus.com (TSXV:TOI) is much less well known than Shopify. However, I’m willing to bet that in a decades’ time, it’ll be one of the more popular growth stocks among Canadian investors. Topicus is an acquirer of vertical market software businesses. If that sounds familiar, it may be because you’re familiar with Constellation Software. In fact, Topicus was a subsidiary of Constellation Software until February of last year, when it was spun off into its own entity.
What differentiates Topicus from its former parent company is that it focuses on the highly fragmented European tech industry. What makes this even more attractive is that the European market tends to be less targeted by venture capitalists. That gives Topicus an opportunity to acquire businesses at a more attractive valuation than what Constellation had to deal with in its early days. Topicus does have access to Constellation’s vast wealth of expertise, as six members of its board of directors are executives from Constellation.
If Topicus can follow the playbook that made Constellation Software into the tech giant it is today, then investors have a great opportunity to make serious returns.
A stock that could be a real powerhouse
When I think of secular trends that could continue to be present over the next decade, I think of renewable energy. More specifically, I believe that renewable utilities will play a very important role in society’s day-to-day functions, by the end of the decade. Because of this, Brookfield Renewable (TSX:BEP.UN)(NYSE:BEP) is a company that should find a home in your portfolio.
Brookfield Renewable operates a diverse portfolio of assets capable of generating more than 20,000 MW of power. Upon the completion of its current construction projects, the company expects to more than double its current generation capacity. That would cement Brookfield Renewable as one of the premier producers of renewable energy in the world.
