My Top TSX Growth Stock for February 2023

Nuvei (TSX:NVEI) stock looks like a great bargain for Canadian growth investors this February.

| More on:
A stock price graph showing growth over time

Image source: Getty Images.

Growth is coming off one of its worst years in a while. Since the page turned on 2022, though, tech plays have been in recovery mode. Still, it’s hard to tell just how long this rotation back into the battered growth names will last. There’s still a recession looming, with high rates that are hurting the value of firms that don’t expect to rake in big profits anytime in the near future.

Indeed, we’ve been talking about and preparing for a recession for well over a year now. At this juncture, there have been mixed economic signals.

Though employment still looks sound, it’s clear that white-collar jobs seem to be feeling the most pain, while blue-collar positions still look plentiful. Given how hard it’s been to secure workers in the service sector following the pandemic, I’d argue it’s unlikely that the economic pressures will spread from tech and other higher-paying white-collar industries.

Recession or not, growth stocks were overdue for relief

Undoubtedly, a 2023 recession will be very different from past economic downturns. With the rise of rates, profitability is a top priority for firms and investors. January has been a hot start to 2023 for markets, questions linger as to what happens next, as the recession gets closer. I think the rally in growth can last, as investors look for names that have fallen well below their intrinsic value. After steep selloffs, there tends to be an opportunity to pay two or three quarters to get a full dollar, so to speak.

Though investors are feeling more bullish, with certain pockets of euphoria hitting the tech stocks with strong artificial intelligence capabilities (thanks, ChatGPT), I’d argue that now is not the time to get “excited” again. Rather, it’s time to be selective and look to the stocks that can help you score decent gains in a bull- or bear-case scenario.

Without further ado, consider Nuvei (TSX:NVEI), a growth play that looks intriguing this February.

Nuvei: My top Canadian growth stock for the month

Nuvei is a Montreal-based payments firm that saw its stock crumble like a paper bag last year. Shares shed around 80% from peak to trough, giving back the gains that lasted between its initial public offering (IPO) and its eventual 2021 peak. These days, Nuvei is hovering closer to its IPO price, which makes for a very intriguing pick-up for investors who believe in the firm’s ability to make a dent in the global payments space.

Did Nuvei stock get ahead of itself in 2021? Sure, but most tech firms and hot IPOs did.

Amid the carnage, Nuvei flexed its financial muscle, picking up Paya in an all-cash deal for US$1.3 billion. The all-cash nature of the deal will allow Nuvei to score a great value in a target that could bolster its capabilities.

Nuvei has also quietly been winning clients of late. Recently, Colombian firm Redeban chose Nuvei for its embedded payments. Indeed, Nuvei’s getting recognition at the international level. Though a recession will weigh on prospects, the ensuing recovery could be very kind to the hard-hit financial innovator.

With a 2.94 beta, though, Nuvei is way more volatile than almost any other stock on the TSX. So, do be ready for massive up-and-down swings.

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nuvei. The Motley Fool has a disclosure policy.

More on Investing

ETF chart stocks

2 Canadian ETFs to Buy and Hold Forever in Your TFSA

I personally own both of these S&P 500 Index ETFs. Here's why.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

How Much Cash Do You Need to Quit Work and Live Off Dividend Income

Toronto-Dominion Bank (TSX:TD) pays a lot of dividend income. Can you live off of it in retirement?

Read more »

Retirees sip their morning coffee outside.

Retirees: 2 TSX Dividend Stocks That Have Raised Payouts for Decades

These top TSX dividend stocks now have 7% yields.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Tuesday, June 25

Besides Canada’s consumer inflation report, the latest U.S. consumer confidence data will remain on TSX investors’ radar today.

Read more »

An analyst uses a computer and dashboard for data business analysis and Data Management System with KPI and metrics connected to the database for technology finance, operations, sales, marketing, and artificial intelligence.
Dividend Stocks

Invest $10,000 in This Dividend Stock for $1,398.40 in Passive Income 

This dividend stock offers a whopping 11.9% dividend yield right now, with returns that should fly high for this cyclical…

Read more »

top TSX stocks to buy
Top TSX Stocks

Could This Undervalued Stock Make You a Millionaire One Day?

Looking for an undervalued stock you can buy today and hold for decades? Here's a great pick with a generous…

Read more »

An airplace on a runway
Stock Market

With Revenue Rising, Is Air Canada’s Sputtering Stock Finally Cleared for Takeoff?

Down 58% from all-time highs, Air Canada stock trades at a discount to consensus price target estimates in June 2024.

Read more »

Person holds banknotes of Canadian dollars
Dividend Stocks

This 6.1 Percent Dividend Stock Is My Pick for Instant Income

Here’s what makes Transcontinental one of my top dividend stock picks right now for instant income.

Read more »