3 High-Growth Stocks to Buy Now to Gain From the Recovery

These growth stocks could recover sharply and fetch stellar returns for its shareholders in the medium term.

| More on:

Image source: Getty Images.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Growth stocks have taken a significant amount of beating in 2022. Valuation concerns, normalization in growth, and higher inflation and interest rates dragged them down. Further, fear of an economic slowdown led investors to shun growth stocks. 

While the current macro and geopolitical challenges could continue to limit the upside, I believe now is the time to start accumulating high-growth stocks to benefit from the recovery in price in the medium term. 

Against this background, let’s look at three high-growth stocks that could rebound sharply, as macro headwinds ease and growth reaccelerates. 

These two tech stocks are must-haves in your portfolio

The sharp correction in the prices of the tech stocks makes them attractive investments. However, only a few offer attractive risk/reward scenario. I find Shopify’s (TSX:SHOP)(NYSE:SHOP) risk/reward scenario highly attractive at the current levels. The massive correction in Shopify stock indicates that the negatives are already priced in, which limits the downside risk. Moreover, Shopify’s growth is likely to accelerate as comparisons ease.

Shopify is aggressively investing in its e-commerce infrastructure, sales, and marketing, which augurs well for long-term growth. Moreover, it has introduced new commercial initiatives to increase its penetration into the existing markets and expand the overall TAM (total addressable market). 

Moreover, its focus on expanding its products into new geographies, the rollout of new features, and partnerships with social media companies will drive its merchant base. Also, the rapid adoption of its payments offerings, strengthening of its fulfillment network, and opportunistic acquisitions bode well for growth. 

While Shopify is well positioned to recover fast and deliver strong returns in the medium term, investors could also consider buying the shares of the digital healthcare company WELL Health (TSX:WELL)

It has consistently grown its revenues and adjusted EBITDA at a breakneck pace. Higher omnichannel patient visits and benefits from acquisitions continue to support its growth and will likely fuel a recovery in its stock. 

WELL Health’s management expects the momentum in its business to sustain in 2022. Moreover, the company will likely deliver a positive adjusted net income in 2022.  

Overall, WELL Health’s strong financial and operating performance, solid organic sales, opportunistic acquisitions, strength in the U.S. business, and an extensive network of outpatient medical clinics bode well for future growth. 

A top financial services company

While investing in the above tech stocks could fetch strong returns, investors could also consider goeasy (TSX:GSY). This financial services company has grown rapidly and delivered above-average returns in the past decade. Given the recent selling, goeasy has stock has corrected quite a lot, presenting a solid buying opportunity. 

It provides leasing and lending services to subprime borrowers. Notably, the subprime lending market is vast, and goeasy’s dominant positioning helps it capitalize on the demand. 

Its growing loan portfolio, growth in loan ticket size, strong credit and payments performance, and increased penetration of secured loans bode well for growth. Moreover, products and channel expansion and acquisitions support its growth. 

goeasy has consistently enhanced its shareholders’ value through paying and growing its dividend. Its dividend has a CAGR of 34.5% in the last eight years. Moreover, the company could continue to hike its dividend further on the back of its solid earnings base.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify.

More on Investing

Knowledge concept with quote written on wooden blocks
Investing

The 2 Best Stocks to Own in a Recession

Recessions cut demand, but essential services like Metro (TSX:MRU) could fare better.

Read more »

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

2 Energy Stocks (With Dividends) to Buy Amid the Market Correction

These dividend-yielding energy stocks look attractive to buy for the long term after their recent dip.

Read more »

Dividend Stocks

2 Undervalued TSX Dividend Stocks to Buy in July

These unloved TSX dividend stocks could deliver attractive returns in the back half of 2022.

Read more »

sad concerned deep in thought
Dividend Stocks

$20 Billion Telco Merger: More Concessions and Conditions Ahead?

The mediation process in the proposed telco merger could lead to more concessions and conditions before the competition watchdog grants…

Read more »

Question marks in a pile
Cryptocurrency

Is the Crypto Market Finally Recovering?

The decision to hold, buy, or sell crypto based on the current rally might be too immature. It would be…

Read more »

Target. Stand out from the crowd
Investing

Investing for Inflation: 2 Oversold TSX Stocks to Buy Now

Quebecor (TSX:QBR.B) is a dirt-cheap, mid-cap TSX stock that could help investors move through a high-inflation or recessionary world.

Read more »

Dividend Stocks

RRSP Investors: 2 Cheap TSX Dividend Stars to Buy for Total Returns

RRSP investors seeking attractive total returns can now buy top TSX dividend stock with high yields at discounted prices.

Read more »

Business man on stock market financial trade indicator background.
Investing

4 TSX Growth Stocks I’d Buy for the Next Decade

These TSX growth stocks are solid investments for long-term investors seeking substantial capital appreciation over the next decade.

Read more »