High-growth stocks saw a massive crash in 2022 due to growing macroeconomic concerns led initially by high inflation and geopolitical tensions. No matter how pessimistically you think at the moment, today’s bear market will eventually turn into a bull market in the future. Given that, it could be the right time you add some fundamentally strong high-growth stocks to your portfolio.
In this article, I’ll highlight three of the best Canadian high-growth stocks that could have a combined value of nearly $1 trillion or more in the next decade or sooner.
BlackBerry stock
BlackBerry (TSX:BB) has seen slightly less than 60% value erosion in 2022 so far to trade at $5.10 per share. The Waterloo-based tech firm currently has a market cap of nearly $3 billion and generates most of its revenue from its cybersecurity software segment.
As businesses globally have cut their costs to deal with the economic environment this year, the sales growth trend of BlackBerry’s cybersecurity segment has declined. Nonetheless, consistently growing demand for its QNX operating system from the auto industry continued to strengthen its IoT (Internet of Things) segment performance. The growth in its IoT segment is likely to improve massively in the coming years due mainly to its efforts to develop advanced technological solutions for autonomous vehicles. Given that, a sharp crash in BB stock this year could be an opportunity for long-term investors to buy it at a bargain.
Shopify stock
Slightly more than a year ago, the Canadian e-commerce giant Shopify (TSX:SHOP) was trading close to its record highs. Since then, the stock has tanked by nearly 78% to currently trade at $49.26 per share, partly due to the broader market selloff. Despite these losses, the stock currently has a market cap of $62 billion. And based on its future growth potential, I wouldn’t be surprised if this value multiplies fast in the coming years.
During Black Friday and Cyber Monday weakened, the total sales of Shopify merchants reached a new record of US$7.5 billion, showcasing the consistent strength of its platform. In the last year, Shopify’s financial growth rate has significantly declined on a year-over-year basis amid reopening economies in the post-pandemic era. Nonetheless, the demand for its easy-to-use e-commerce services remains solid and is expected to rise further in the coming years with more business trying to build their online presence. This should boost SHOP’s sales and earnings growth in the coming years and help its stock rally.
Constellation Software stock
Constellation Software (TSX:CSU) is another fundamentally strong high-growth stock in Canada that has the potential to grow significantly in value in the long term. This Toronto-headquartered tech firm has a market cap of $45.4 billion at the moment, as its stock trades at $2,144.50 per share with 10.2% year-to-date value erosion.
Interestingly, despite its sharp losses in 2022, CSU stock has delivered more than 1,700% positive returns to investors in the last 10 years, even after excluding dividends. Despite industry-wide challenges, Constellation Software continued to post strong growth in the first three quarters of 2022 with the help of its continued strategic acquisitions. Moreover, its strong financial position, robust cash flows, and ability to perform well, even in the difficult economic environment, make CSU stand out from most other high-growth stocks, making it worth considering for the long term.
