When stocks are flying, investors get really excited to pour money into the market. When stocks fall, many investors often become hesitant to continue investing. However, I believe that market downturns could actually be greater opportunities. When investors buy stocks at a massive discount, it could set them up for greater gains in the future.
With that said, I believe investors should look for beaten-down stocks with strong underlying businesses. Here are three picks you’ll be happy you own in 2032.
This remains one of the best Canadian companies
Shopify (TSX: SHOP)(NYSE:SHOP) is still one of my favourite TSX stocks for the next decade. Yes, it’s true that the company had to lay off 10% of its workforce earlier this year. However, the underlying business is still operating smoothly. The reason why Shopify needed to cut down on its employees is because its management misjudged the potential growth of the e-commerce industry coming out of the pandemic.
Despite a noticeable shift towards in-store shopping, e-commerce sales remain strong. In the United States, e-commerce sales represent about a 13% share of the broader retail industry. In the second quarter (Q2) of 2022, Shopify reported a 16% year-over-year increase in its revenue. Shopify could continue to grow at a steady pace over the next decade due to its outstanding enterprise partnership network, which includes the likes of Meta Platforms, Spotify, and YouTube, among many others.
I’m very excited by this stock
If you’re interested in another tech stock, then consider buying shares of Topicus.com (TSXV: TOI). This company acquires vertical market software businesses. Topicus differentiates itself from its peers by focusing on the highly fragmented European tech industry. It should be noted that European tech businesses tend to receive less acquisition pressure from venture capitalists. This gives Topicus an opportunity to acquire more companies without having to worry about heavy competition.
Topicus has already acquired more than 20 companies in this year alone. One of the more notable acquisitions it’s made this year may be Sygnity SA, a vertical market software provider which operates in several industries, including banking, utilities, and administration. Sygnity is an interesting acquisition, because it shows that Topicus is open to acquiring majority stakes of public companies. With a board of directors, which includes the likes of Constellation Software founder and president Mark Leonard, I believe Topicus has a bright future ahead.
A top stock for growth and dividend investors alike
Brookfield Renewable (TSX: BEP.UN)(NYSE: BEP) is one of the largest producers of renewable utilities in the world. It operates a portfolio of assets capable of generating 21 gigawatts (GW) of renewable power. Brookfield Renewable also has an additional 69 GW of renewables at various stages within its development pipeline.
I believe this stock that I think could interest growth and dividend investors alike. With respect to its growth, Brookfield Renewable has managed to outperform the broader market. Brookfield Renewable stock has generated an annualized return of 17% since its inception. That compares to an annualized return of 7% by the TSX over the same period. Regarding its dividend, Brookfield Renewable has managed to increase its distribution at a compound annual growth rate of 6% over the past 11 years.
