Buying low and selling high is easier said than done. During a significant market dip, it can be very difficult to do just that. However, growth stocks are now trading at some of the most attractive valuations they’ve been at in some time.
Does that mean now is time to buy the dip? Perhaps.
Of course, there’s rising interest rates that investors will have to contend with. And as Federal Reserve Chairman Jerome Powell suggests, faster interest rate hikes could be on the table to cool inflation. For growth stocks, this isn’t a good thing.
That said, there are a few Canadian growth stocks that may actually benefit in this environment. Among the three on my radar right now are Shopify (TSX:SHOP)(NYSE:SHOP), Spin Master (TSX:TOY), and TFI International (TSX:TFII)(NYSE:TFII). Here’s why.
Top growth stocks: Shopify
Initially launched as a snowboarding platform, Shopify has since shifted to becoming a leading provider of e-commerce software solutions to a range of clients. Shopify now operates in more than 175 countries, where merchants use the company’s software to grow their online businesses.
Shopify has recently been investing heavily in its growth. From teaming up with TikTok to engaging in other key Asian growth partnerships, there’s a lot to like about Shopify’s growth trajectory from a global perspective.
That said, analysts expect Shopify’s earnings to halve while its sales grow at around 30% per year moving forward. Growth isn’t cheap, and input costs are increasing.
However, those looking for long-term growth certainly have quite a few catalysts to point to with Shopify. This remains a top growth stock long-term investors may want to consider on significant selloffs.
Spin Master
Another top Canadian growth stock I’ve had my eye on for some time is Spin Master. This children’s entertainment company has shifted from making toys to providing digital gaming experiences. Overall, Spin Master’s business model is nicely diversified and vertically integrated. I like that.
Additionally, this company has recently posted very strong earnings. The company’s top-line growth of 27% on a year-over-year basis is incredible. Indeed, investors appear to be viewing Spin Master as more of a digital gaming stock than a consumer discretionary play. Accordingly, the company’s valuation has remained solid.
That said, like many growth stocks, Spin Master has seen its share price decline considerably off its peak. Over the long term, I think there’s a lot to like about this company. Thus, this is another great candidate for long-term investors to consider at these levels. At least, that’s my take.
TFI International
Finally, we have TFI International. TFI is a leading logistics services provider in North America. The company’s rather defensive business model may preclude this stock from the growth discussion. However, looking at the company’s long-term chart, it’s clear that TFI has been doing something right.
Of course, this current macro environment has been bullish for TFI. The company’s margins have improved, as has TFI’s recent cash flows. According to the company’s recent results, TFI posted free cash flow of more than $121 million. Additionally, revenue grew by 90% on a year-over-year basis to reach $2.1 billion. Those are some impressive results.
Overall, investors looking for high-quality Canadian growth stocks may want to consider these three companies. These aren’t cheap stocks. However, they’re priced this way for a reason. Should earnings continue to grow, I think more in the way of capital appreciation could be on the horizon.
