Over the last couple of months, there has been a significant sell-off in high-growth stocks, especially those from the tech sector. This sell-off is one of the first times stocks have pulled back in the two years since the pandemic hit, making it one of the best opportunities to buy Canadian stocks while they are still cheap.
Not only is it the best opportunity to buy stocks in years, but typically growth stocks offer some of the best potential returns, especially when you buy them below fair value.
So if you’re looking to take advantage of the recent volatility and buy top Canadian stocks while they are still ultra-cheap, here are two of the best to buy now.
A top Canadian health care tech stock
WELL Health Technologies (TSX:WELL) stock has had a wild ride the last few years. Even before the pandemic, the stock was rapidly gaining in price as it was building tonnes of value growing by acquisition.
But when the pandemic hit, WELL Health Technologies saw a huge tailwind that helped its operations grow considerably. Furthermore, its stock received a hefty growth premium as a result of these tailwinds.
As the pandemic has been winding down, though, and as restrictions have been dropping while we move back to normal, WELL’s growth premium has eroded considerably. The stock has sold off so much that it’s now significantly undervalued. And when you can buy a high-quality stock like WELL cheap, it’s one of the best opportunities for Canadian investors.
With the quality growth WELL has displayed and the fact that it continues to disrupt the essential health care industry, it’s only a matter of time before this stock is rallying again.
Even analysts agree the stock should be worth more. WELL’s current average target price is $9.25, an almost 90% premium to today’s price. And even the lowest target price from analysts that cover the stock is $8 a share, a roughly 70% premium to today’s share price.
So while this top Canadian stock is so cheap, it’s one of the top investments to buy now.
A cheap Canadian growth stock to buy now
Another high-quality company that has consistently put up impressive numbers is Aritzia (TSX:ATZ). And for years, investors were rewarded as the share price has surged. However, in the recent volatility, it’s sold off considerably, making this top Canadian retail stock one of the best to buy while it’s this cheap.
Aritzia’s vertically integrated business model and success at growing its brand are hard to ignore. The women’s fashion company has done an incredible job of growing demand from consumers for products that are more luxurious than fast fashion alternatives but more affordable than true luxury brands.
Plus, its commitment to high-quality and eco-friendly materials alongside Aritzia’s unique boutiques and strong e-commerce platform has consumers consistently coming back for more.
So with the company continuing to create new brands and labels for its portfolio that strongly resonate with customers, it’s no surprise why its business has skyrocketed in recent years.
As Aritzia rapidly expands its boutique count across the U.S., its sales and income are following suit. In just the last three years, through the pandemic when many retail companies were struggling, Aritzia managed to grow its sales by 58% and grow its net income by 83%.
So while the stock is still cheap and with a premium of 35% to its average analyst target price from where it’s trading today, it’s one of the top Canadian stocks to buy.