Earlier this month, the Commerce Department reported that consumer spending in January increased by 1.8% against analysts’ expectations of 1.4%. Personal income adjusted for inflation rose by 1.4%, beating analysts’ expectation of 1.2%. These solid economic data have made investors nervous, as they expect the Federal Reserve to continue with its monetary tightening initiatives. So, growth stocks continue to be under pressure.
Amid the weakness, the following two stocks have witnessed substantial selling and offer excellent buying opportunities for long-term investors.
Nuvei (TSX:NVEI), through its modular, flexible, and scalable platform, facilitates businesses to accept next-gen payments, thus boosting their sales. It currently supports 150 currencies and 600 alternative payment methods. Meanwhile, more people are adopting digital payments amid the growing popularity of online shopping. So, this secular shift has created a multi-year growth potential for the company.
Amid the growing demand for digital payments, Nuvei has strengthened its infrastructure to support higher transactions simultaneously. It has also launched “Nuvei for Platforms,” a highly customizable platform developed to meet the needs of e-commerce platforms, marketplaces, banks, and fintech companies. Further, it recently completed the acquisition of Paya Holdings for $1.3 billion, which has expanded its reach in the underpenetrated and non-cyclical verticals.
Nuvei also expanded its footprint in the United States online gaming industry through license wins in Maryland and Kansas. So, given its multiple growth drivers, the company’s outlook looks healthy. However, the selloff in growth stocks amid an uncertain economic outlook has dragged down the company’s stock price, which now trades 77% lower than its all-time high.
Amid the pullback, the company’s NTM (next 12-month) price-to-earnings multiple has declined to 14.5. So, considering its multiple growth drivers and a discounted stock price, I expect Nuvei to deliver multi-fold returns over the next 10 years.
WELL Health Technologies
WELL Health Technologies (TSX:WELL) is a digital healthcare company that facilitates healthcare practitioners to provide omnichannel consultations to their patients. The company’s platform includes end-to-end practice management tools, including virtual care and digital patient engagement capabilities. The pandemic accelerated the adoption of telehealth care services.
However, given the convenience and accessibility, the demand for telehealth services is rising. Also, the growing penetration of internet services and the development of innovative products has supported the growth.
Meanwhile, Grand View Research projects the telehealth market to expand at an annualized rate of 19.5% through 2030. Meanwhile, the company looks to strengthen its footprint across Canada and the United States through strategic acquisitions. Over the last few months, it has acquired INLIV, Grand Canyon Anesthesia, and CloudMD’s cloud practice entity. Supported by these growth initiatives, WELL Health’s management expects its revenue run rate to reach $700 million by the end of the 2023 fiscal.
To drive its growth, the company has not sacrificed its profitability, which is encouraging. Its adjusted net income grew by 51% in the September-ending quarter. Despite its solid financials and high-growth prospects, the company trades at a 57% discount from its all-time high. Its NTM price-to-earnings multiple stands at 17, offering an excellent entry point for long-term investors.