The TSX Venture Exchange is a place where small, up-and-coming stocks trade. Here, you can find some of the best stocks in Canada before they are well-known and surge significantly in price. And one of the best ways to find high-potential stocks is to look over the TSX Venture 50 winners.
The TSX Venture 50 is a list of some of the best-performing stocks on the exchange. The list for 2022 will be announced early next year. But many of the best companies win multiple years in a row, such as StorageVault Canada. It made the list for four consecutive years before graduating to the TSX earlier this year.
Investors who find high-quality companies that have significant growth potential and are executing well can realize massive gains by holding these stocks for years.
Of course, it’s important to remember that all stocks have risks. There are several different risks to consider, and most importantly, execution risk. All stocks have some degree of execution risk — the risk that they won’t meet goals or will suffer impacts on their business operations.
And in this environment, the risk that stocks will see an adverse impact on business or not execute as well as they have in the past is certainly heightened, especially for micro-cap growth stocks.
So it’s crucial that if you want to invest in these high-risk, high-reward stocks, you have a lengthy timeline for investing and a high-risk tolerance. With that in mind, here are two up-and-coming TSX venture stocks to keep an eye on.
One of the best stocks to watch as we transition to cleaner energy
One of the most exciting up-and-coming TSX venture stocks to keep your eye on is a rapidly growing ESG and sustainability company, Eguana Technologies (TSXV:EGT).
Eguana designs and manufactures high-performance energy storage systems for residential and small commercial customers.
This is a technology that has huge potential and significant demand in the future, especially as we continue to transition to cleaner energy. Furthermore, the technology would allow cities to begin building distributed power grids, rather than the traditional power grid where power flow only moves one way. In that case, there’s no control over the demand for electricity and the infrastructure is expensive to build.
With the help of Eguana’s technology, a distributed power grid will offer more efficiencies and bring down prices for consumers. And crucially, more consumers will soon need improved energy storage systems, especially as electric vehicles become more popular.
In 2018, the demand for home batteries was $2 billion. According to Equana’s investor presentation, that’s expected to grow to over $15 billion by 2025.
Therefore, Eguana is one of the top venture stocks to keep your eye on today.
A high-potential hydrogen stock trading on the TSX Venture
Another high-potential stock to add to your watchlist from the TSX Venture is First Hydrogen (TSXV:FHYD). This clean fuel producer could also be a significant investment over the coming years as we harness cleaner energy.
First Hydrogen designs and manufactures zero-emission, long-range hydrogen-powered utility vehicles in Europe, the U.K., and North America.
There’s no doubt that electric vehicles will be crucial to help slow down climate change. As governments worldwide impose EV sales quotas, they continue to become more popular. As great as electric vehicles are, though, there are still drawbacks to the technology.
Sourcing materials for batteries can be costly and also harmful to the environment. Furthermore, while small vehicles and cars can be powered by electricity, it remains to be seen if the technology will be able to power massive transport trucks.
All considered, there is significant potential for hydrogen-powered vehicles, especially as e-commerce continues to grow in popularity, resulting in more trucks and vans on the road.
First Hydrogen is exciting because it offers investors a strategic investment in the hydrogen-powered space. The cleantech is building a flexible business model, has made strategic partnerships, and is receiving significant government support, especially in the U.K. and Europe.
Therefore, it’s not surprising that while many of these small, micro-cap stocks sold off this year as risks in the market surged, First Hydrogen has gained over 120% year to date.
So if you’re looking for a high-potential TSX Venture stock to add to your watchlist, First Hydrogen is one you’ll certainly want to keep an eye on.