TFSA Investors: 2 U.S. Stocks I’m Never Selling

Canadians looking to diversify their portfolios and gain exposure to U.S. stocks can purchase shares of high-growth companies such as The Trade Desk and benefit from exponential gains.

| More on:
IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT

Image source: Getty Images

The Tax-Free Savings Account (TFSA) is a popular registered account among Canadians. Launched in 2009, the TFSA encourages savings and investments, as any withdrawal from the account is exempt from Canada Revenue Agency taxes.

Canadians can hold several asset classes in a TFSA that include stocks, bonds, and mutual funds. Investors can also buy and hold equities from exchanges south of the border, to further diversify their portfolio.

Here, we look at two U.S. stocks that I believe should be a part of your TFSA portfolio in 2022.

Green Thumb Industries

The first stock on my list is Green Thumb Industries (CNSX:GTII), a U.S.-based cannabis producer valued at a market cap of US$3 billion. Headquartered in Chicago, Illinois, Green Thumb has 17 manufacturing facilities and 77 retail locations across 15 states in the U.S.

The company manufactures and distributes a portfolio of branded cannabis products. It also owns and operates a chain of retail cannabis stores called RISE, which is fast gaining traction across the country.

Due to the recent wave of legalization in the U.S., Green Thumb has managed to increase sales from US$62.5 million in 2018 to US$893.56 million in 2021. In Q2, its sales rose by 14.6% year-over-year to US$254.3 million. It has now reported eight consecutive quarters of positive GAAP (generally accepted accounting principles) net income which stood at US$24.4 million or US$0.10 per diluted share in the June quarter.

Green Thumb’s adjusted operating EBITDA (earnings before interest, tax, depreciation, and amortization) rose 17.4% to US$78.7 million in Q2, accounting for 31% of sales. In the first six months of 2022, its operating cash flow stood at US$40 million.

Analysts also expect company sales to touch US$1.6 billion in 2023, valuing the stock at a forward price to sales multiple of 2.

Green Thumb stock is down 73% from all-time highs. But its now trading at a discount of 170% compared to consensus price target estimates. Now would be a good time to consider Green Thumb stock.

The Trade Desk

One of the largest players in the programmatic advertising segment, The Trade Desk (NASDAQ:TTD) is a solid long-term bet. Down 50% from all-time highs, TTD’s stock price has still surged 1,700% since its IPO in 2016.

Several tech giants such as Meta Platforms, Snap, and Twitter reported revenue and earnings below consensus estimates in Q2 due to a challenging macro-economic environment. However, The Trade Desk’s sales rose 35% year-over-year in Q2 to US$377 million while adjusted earnings surged 11% to US$0.20 per share. Analysts forecast sales and EPS (earnings per share) at US$365 million and US$0.20 per share, respectively.

TTD’s co-founder and CEO Jeff Green commented that the company’s stellar performance in Q2 provides the management team with confidence in gaining market share across economic cycles. It also continues to invest in verticals such as identity, connected TV, retail media, and supply chain optimization.

The Trade Desk has signed several partnerships with the world’s leading broadcasters, retailers, and publishers which should drive future revenue growth.

TTD now expects revenue of US$385 million and adjusted EBITDA of US$140 million in Q3. Analysts tracking TTD stock, forecast sales to touch US$382.2 million in the September quarter.

Due to the recent sell-off, TTD stock price is trading at a discount of almost 50% compared to consensus price target estimates. Considering its future growth potential, this stock offers a great opportunity to diversify your TFSA portfolio.

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends The Trade Desk. The Motley Fool recommends Green Thumb Industries.

More on Cannabis Stocks

A cannabis plant grows.
Cannabis Stocks

Canopy Growth Stock Is Rising But I’m Worried About This One Thing

Canopy Growth stock is soaring as the legalization effort makes real progress in both Germany and the United States.

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

Why Canopy Growth Stock Could Double in 2024

Canopy Growth (TSX:WEED) stock saw its share more than double in the last two weeks. So, can it do it…

Read more »

Coworkers standing near a wall
Cannabis Stocks

Why Is Everyone Talking About Canopy Growth Stock?

Canopy Growth stock (TSX:WEED) saw shares surge in the last two weeks for a variety of reasons investors can dig…

Read more »

Pot stocks are a riskier investment
Stocks for Beginners

Why Shares of Cannabis Stocks Are Rising This Week

Cannabis stocks received a boost this week as the White House urged the drug enforcement administration to reschedule the drug.

Read more »

A person holds a small glass jar of marijuana.
Stocks for Beginners

Why Canopy Growth Stock Jumped 16% on Wednesday

Canopy Growth stock (TSX:WEED) is up 16% on Wednesday, adding to a surge of 60% growth in the last week…

Read more »

Pot stocks are a riskier investment
Cannabis Stocks

Is the Worst Over for Canopy Growth Stock?

Down 99% from all-time highs Canopy Growth stock has burnt investor wealth and remains a high-risk investment.

Read more »

Pot stocks are a riskier investment
Cannabis Stocks

Steer Clear: This Stock Spells Trouble

A newly listed cannabis stock is outperforming in 2024 but investors should stay clear to avoid trouble and losses.

Read more »

Cannabis stocks have fallen.
Cannabis Stocks

2 Best Marijuana Stocks to Buy This Month

Marijuana stocks in the U.S. such as Green Thumb and Curaleaf can help you deliver outsized gains to investors in…

Read more »