Growth stocks have decades or at least years of consistent and exemplary performance backing up their potential. Then there are stocks that may only offer exceptional returns when the market conditions are right. You may not find the first kind of stocks with an unconventionally heavy discount tag, even in troubled markets. But you may find the latter at fantastic bargain prices (and valuations).
An e-commerce stock
Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) had a fantastic run between inception (2019) and its 2021 peak. It grew at an incredible pace, but a combination of factors, including the tech sector’s brutal decline, has pushed it down to new depths. The stock is close to trading at its IPO (initial public offering) price and is trading at an almost 85% discount from its last peak, making it a compelling bargain.
Thankfully, some factors that pushed the stock down are not eroding and are already giving way to positive forces for the stock. The e-commerce activity might return to the average pre-pandemic level and trigger a more organically paced growth. And even if the stock does nothing more than reach its peak in the next decade, you can expect over six times the growth of your capital if you buy now.
A crypto stock
Crypto stocks, even the ones like Galaxy Digital (TSX:GLXY) that may not have an as direct relation to specific cryptocurrencies as crypto miners do, are tied to the underlying crypto market. They rise when most major cryptos rise and fall when cryptocurrencies, like Bitcoin, which led the pack, fall. Galaxy Digital stock has lost over 80% from its peak, similar to Bitcoin’s 67% fall.
But the recovery potential is equally powerful. If the crypto market and crypto assets start to recover, the stock might follow the course and present its investors with a more pronounced recovery than most individual crypto assets. It happened the last time the stock peaked and returned over 2,600% to its investors in less than a year.
A marijuana stock
If you are looking for an even more discounted and undervalued stock than the two above, Aurora Cannabis (TSX:ACB)(NASDAQ:ACB) might fit the bill. The stock is trading at a 98% discount to its 2019 peak. This is an even harsher decline compared to its peers in the industry, which are all suffering from similar problems.
Still, the company has a strong position in the medical marijuana market, and it’s in the process of acquiring over 50% of Bevo Farms, which may raise its potential profit profile.
Even if the stock never reaches its all-time high price point, it can still transform your portfolio, given the right market conditions. It’s trading at just under $2 right now, and it can offer 500% growth by hitting the $10-a-share mark — a far cry from the $160-a-share peak.
Given the right market conditions, the three stocks can offer exceptional growth in short-term periods. They may offer more growth in a couple of years than most consistent growth stocks offer in decades, so you don’t have to hold on to them for the whole decade. You can buy them discounted and wait for the next peak to exit.