Over the last few years, investors have gotten used to lengthy bull markets during which the market was consistently rallying. And many of these growth stocks earned investors significant returns.
Aside from the sell-off in the pandemic in 2020 and shock to energy markets in the mid-2010s, there hasn’t been a major pullback in stocks or the economy since the 2008 financial crisis.
However, while we’ve enjoyed years of impressive gains from growth stocks, stock market sell-offs are a normal part of the economic cycle.
That’s why, rather than worry about how your investments are being impacted in the current environment, it’s crucial to continue thinking about the future and use these opportunities to your advantage.
It’s very difficult to predict when exactly we’ll get the next bull market. What we do know, though, is that at some point, the market has to recover.
Therefore, while high-potential growth stocks are trading undervalued, now is the ideal time for investors to buy shares.
So if you’re looking for growth stocks to add to your portfolio while they’re still cheap, here are three I’ve bought to get ready for the next bull market.
A top Canadian tech stock with massive growth potential
There are tonnes of impressive Canadian growth stocks to buy ahead of a bull market, especially in the tech sector. However, while investors may have many choices, one stock with massive growth potential is AcuityAds Holdings (TSX:AT), a micro-cap adtech stock.
Acuity has had a tough last few years, experiencing growing pains and being impacted by the current market environment. In late 2020, AcuityAds launched its proprietary self-serve platform that allows advertisers to plan, buy, and assess their ad campaigns in a single platform.
AcuityAds knew it would take some time to grow sales after the platform’s launch due to the learning curve for advertisers. However, during that time, the economic environment shifted, and advertising revenue fell significantly, as it typically does before a recession.
As the economy will eventually recover, though, and as its platform becomes more popular, AcuityAds has significant upside potential.
Right now, the stock has a market cap of $110 million and trades at a forward price-to-sales ratio of just 0.85 times. Meanwhile, only a few years ago, it traded at more than 10 times sales.
Therefore, with AcuityAds trading ultra-cheap and considering its growth potential, it’s one of the best growth stocks to buy ahead of the next bull market.
An incredible Canadian growth stock with significant upside potential in the next bull market
Another ultra-cheap growth stock to buy before the next bull market is goeasy (TSX: GSY), the rapidly growing financial stock.
goeasy offers lending and leasing services to consumers across Canada with below-prime credit ratings. Therefore, as the economic environment has worsened over the last year, naturally, the risk to goeasy’s business has picked up as well.
However, with that being said, time and again, goeasy has proven it can manage its portfolio risk well. Notably, charged-off loans remain well within their expected range of 8.5% to 10.5%.
So the fact that you can buy goeasy while it’s trading more than 45% off its all-time high reached in late 2021 is a massive opportunity. This lower value is why goeasy is one of the best growth stocks to buy before the next bull market.
A top Canadian retailer that continues to perform well
Last on the list is the impressive retail company Aritzia (TSX: ATZ). The women’s apparel retailer has been rapidly expanding its business across North America.
Many discretionary retail stocks have been impacted over the last year, as the market expects a recession and slower consumer spending to impact these companies’ operations.
However, Aritzia has continued to perform well and post impressive growth numbers. For years it expanded across Canada. Now it’s seeing growth both in e-commerce and as it rapidly expands its store count across the United States.
Plus, over the last three years, Aritzia has had an average forward price-to-earnings ratio of more than 31 times. Today, it trades at below 20 times its forward earnings, essentially the cheapest it has been since the pandemic.
So while Aritzia is trading at such a considerable discount, it’s another top Canadian growth stocks to buy ahead of a bull market.
