Throughout the year, as many investors know, stocks across the board have lost tonnes of value. However, while almost every company has been impacted, there’s no question that TSX growth stocks have faced some of the most significant selloffs and offer investors some of the best bargains.
As uncertainty creeps into markets, naturally, the valuations for stocks fall, as investors are unwilling to pay such high premiums in the new, higher-risk environment. Furthermore, as fears of a recession have picked up, many of these stocks are at risk of seeing their operations and profitability impacted, which lowers future earnings estimates.
Therefore, when you combine lower expected earnings over the coming years with investors who are unwilling to pay the same premium multiples for these earnings, the stocks can fall significantly.
And with growth stocks, we can see their short-term growth potential impacted severely. However, we can also see their valuations tumble rapidly as well. So, in this environment, while high-growth TSX stocks temporarily trade ultra-cheap, they are some of the best stocks to buy now.
A top Canadian tech stock
While some of the top TSX growth stocks have seen some of the most significant selloffs over the last 12 months, tech stocks in particular have been some of the worst impacted. That’s why if you’re looking to buy high-growth stocks that can soar, I’d start with a company like WELL Health Technologies (TSX:WELL).
WELL Health Technologies fell out of favour, as the pandemic and its impacts have slowly been easing. In addition, it’s also lost even more value, as the market has come under pressure this year. However, the stock has several reasons to be bullish, plus it trades dirt cheap.
First off, it serves a healthcare industry that’s not only defensive but also in need of innovation. In addition, WELL has built an impressive portfolio of healthcare businesses, including physical clinics as well as telehealth apps and other digital health businesses. Moreover, many of these companies are seeing impressive organic growth every single quarter.
Therefore, with WELL Health trading at a forward enterprise value (EV) to sales ratio of 2.3 times, it’s well undervalued and one of the best high-growth TSX stocks to buy now.
A top financial stock offering a significant opportunity
In addition to WELL, another incredible growth stock that you can buy at a major discount today is goeasy (TSX:GSY).
goeasy is a rapidly growing financial company that offers various loans to sub-prime borrowers across Canada. It started as a company that offered leasing on furniture (which it still does), but in recent years it has grown rapidly to offer many services, including personal loans and lines of credit and recently has been growing its auto loan segment.
Any companies that loan money have more risk in these uncertain environments, and, in goeasy’s case, loaning to borrowers with lower credit ratings certainly increases the uncertainty. However, with that being said, goeasy would have to see a more than doubling in its charge-off rate for it to even come close to losing money.
Therefore, while this high-potential stock trades at a discount, it’s one of the best high-growth stocks on the TSX that long-term investors can buy now.
One of the best growth stocks on the TSX
Just like many other growth stocks, Aritzia has sold off this year in large part due to the market environment. However, because Aritzia is a women’s fashion retailer and sells discretionary items, there is certainly some worry among investors that its sales and growth could be impacted, especially in this high-inflation environment.
So far, throughout this year, though, Aritzia has continued to beat expectations, and its growth remains on track. What the stock really has going for it is that its e-commerce segment is highly popular. In addition, it has roughly two times as many stores in Canada as it does in the United States, giving it a massive runway for growth over the coming years.
So, while Aritzia trades undervalued, more than 30% off its high, it’s easily one of the best TSX growth stocks to buy now.