3 Bargain Stocks to Buy Today and Hold for the Next 5 Years

Are you sitting on extra cash? Buy and hold these TSX stocks to profit from their recovery.

| More on:
Technology

Image source: Getty Images

Investing in top TSX stocks that have corrected quite a lot on fear of a recession and valuation concerns can generate solid returns in the next five years. While a weak economic environment could limit the recovery in the short term, the downside risk remains capped, considering the massive decline in their prices. 

So, if you are sitting on extra cash and do not need it for the next five years, consider investing in the following three TSX stocks at current levels to earn solid capital gains. Most of these stocks are trading cheap (they have lost over 30% of their value in 2022), providing an excellent investment opportunity. 

goeasy

Let’s begin with goeasy (TSX:GSY), which provides leasing and lending services to subprime consumers. goeasy has a history of consistently delivering double-digit revenue growth (its top line has increased at a CAGR, or compound annual growth rate, of 15.9% in the past decade). Thanks to its higher sales and steady credit performance, goeasy’s adjusted EPS (earnings per share) has increased at a CAGR of approximately 29%. In 2022, Its top line marked growth of 30% (in the first six months), while adjusted net income registered an increase of 15%. 

Despite this stellar performance and continued growth in the loan portfolio, goeasy stock has dropped over 34% year to date. Economic uncertainty and its potential impact on subprime borrowers have weighed on goeasy stock. However, this correction is unwarranted, especially as the management projects double-digit revenue growth through 2024. Any improvement in the economy will likely give a solid boost to goeasy stock. Meanwhile, investors can profit from its robust dividend payments.

Overall, goeasy has the potential to deliver attractive returns in the next five years. Meanwhile, investors can earn a well-covered yield of 3.4% along the way. 

Docebo 

From financial services, let’s move to technology stocks. Down about 61% year to date, Docebo (TSX:DCBO) has the potential to deliver outsized returns. The company has been consistently delivering solid growth, which indicates that the decline in its stock price is unjustified. However, this pullback is a solid opportunity for buying it and benefitting from the recovery in the medium term. 

Docebo’s solid ARR (annual recurring revenues) growth (growing at a CAGR of 66% since 2016), increase in enterprise customer base, higher average contract value, and increased revenues from existing customers provide a solid platform for a recovery in its stock. Moreover, geographic expansion, accretive acquisition, new product launches, and productivity savings augur well for growth. 

Shopify

Down about 76% year to date, Shopify (TSX:SHOP) is must-have stock at current levels. The e-commerce platform provider is poised to gain from the digital shift, as more merchants adopt its multiple solutions. Moreover, its growth is expected to accelerate as its investments in growth measures have started to gain traction. 

The expansion of its existing products in new markets and increased adoption of its payment (including the offline offerings) and capital solutions bode well for growth. Also, strengthening its fulfillment services, strategic alliances with social media companies, and launching new merchant features will drive its merchant base and lead to a recovery in its price. 

Shopify stock is trading cheap and is at a multi-year low, providing a good buying opportunity.

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. The Motley Fool recommends Docebo Inc. The Motley Fool has a disclosure policy.

More on Tech Stocks

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Business man on stock market financial trade indicator background.
Tech Stocks

1 Growth Stock Down 50 Percent to Buy Right Now

There are plenty of growth stocks in the market worth considering, but Shopify (TSX:SHOP) looks like one of the best…

Read more »

Woman has an idea
Tech Stocks

Prediction: 1 Stock That Could Trounce the Market 

The TSX has been favouring tech stocks, but not this one. However, it has the potential to trounce the market…

Read more »

clock time
Tech Stocks

Long-Term Investing: 3 Top Canadian Stocks You Can Buy for Under $20 a Share

These three under-$20 stocks offer excellent buying opportunities for long-term investors.

Read more »

Businessman holding AI cloud
Tech Stocks

AI Will Transform Everything: Investors, Be Early Adopters and Buy These 3 Stocks

Investors looking to invest in companies doing big things in AI should consider these three stocks for their portfolios.

Read more »

stock research, analyze data
Tech Stocks

Forget Shopify: These Unstoppable Stocks Are Better Buys Today 

Should you consider buying Shopify stock while rivals consider a buyout or should you go for stocks with a stronger…

Read more »

A colourful firework display
Tech Stocks

2 Potentially Explosive Stocks to Buy in March

These two growth stocks are destined for many more years of market-crushing returns.

Read more »

edit CRA taxes
Tech Stocks

TFSA Millionaires Are Learning They Can Still Be Taxed

If you day trade stocks like Shopify (TSX:SHOP) in a TFSA, you may be taxed.

Read more »