The Best Stocks to Invest $50,000 in Right Now

You can create a portfolio of undervalued stocks with $50,000 right now. Here are three such stocks you can add to your watchlist.

| More on:
edit Colleagues chat over ketchup chips

Image credit: Photo by CIRA/.CA.

Albert Einstein once said the power of compounding is the eighth wonder of the world. For instance, you can turn a $50,000 investment into $500,000 over 20 years if you generate returns of 12.2% each year.

The bull run in the past decade enabled the S&P 500 to deliver annual returns of 15.5% between March 2009 and March 2020. While index investing is a good strategy to beat long-term inflation rates, you can also derive outsized gains by gaining exposure to quality stocks.

Since the start of 2022, rising interest rates and inflation have driven the valuations of companies across sectors significantly lower, allowing you to gain exposure to undervalued gems trading at a discount. Here, we’ll look at three such beaten-down stocks that are bargain buys for those with a long investment horizon.

Snowflake stock

One of the fastest-growing tech stocks in the world, Snowflake (NYSE:SNOW) enables enterprises to easily integrate data sets and execute analytic workloads, providing a robust experience across public clouds.

Snowflake ended fiscal 2023 with remaining performance obligations of over US$3.6 billion and more than 7,800 customers. Around 330 customers have spent more than US$1 million on the Snowflake platform in the last four quarters. Its dollar-based net retention rate stood at 158%, which indicates existing customers increased spending by 58% in fiscal 2023.

Snowflake forecast its total addressable market to touch US$248 billion by 2026, providing the company with enough room to accelerate top-line growth, given its revenue stood at US$2.07 billion in fiscal 2023.

Toronto-Dominion Bank stock

A Canadian giant, Toronto-Dominion Bank (TSX:TD) is wrestling with multiple macro headwinds right now. The collapse of several banks south of the border in recent days and a sluggish lending environment has driven shares of TD Bank lower by 25% from all-time highs, allowing you to benefit from a tasty dividend yield of 4.5% today.

Moreover, TD Bank is armed with a strong balance sheet and has the second-best tier-one capital ratio in North America. This ratio measures how well a bank is capitalized to handle an economic downturn.

Priced at 10 times forward earnings, TD Bank stock is also trading at a discount of 25% compared to consensus price target estimates.

Docebo stock

The final stock on my list is Docebo (TSX:DCBO), an enterprise-facing e-learning company. Valued at a market cap of $1.6 billion, Docebo stock is down 60% from all-time highs.

Docebo transitioned towards a subscription-based business model, allowing it to generate consistent revenue across market cycles. Additionally, the global shift towards the work-from-home trend is bound to increase demand for Docebo’s portfolio of learning products and solutions in the next decade.

In the last seven years, Docebo has increased its average contract values by 300%, which suggests it has successfully raised customer spending on its platform. It has also allowed Docebo to increase sales from US$41.4 million in 2019 to US$133.7 million in the last 12 months.

The Canadian company continues to reinvest in growth, thereby sacrificing the bottom line. While DCBO stock is priced at 250 times forward earnings, its widening base of customers, revenue expansion rates, and higher customer spending make it a top bet right now.

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Docebo and Snowflake. The Motley Fool has a disclosure policy.

More on Tech Stocks

grow money, wealth build
Tech Stocks

$10,000 Invested in These Growth Stocks Could Make You a Fortune Over the Next 10 Years

Growth stocks such as Dollarama and Chewy are well poised to deliver outsized gains to long-term investors.

Read more »

online shopping
Tech Stocks

Is Shopify Stock a Buy in March?

Shopify stock has had a volatile run, but fundamentals are strong, and valuations are much lower after its 71% decline.

Read more »

data analyze research
Tech Stocks

2 Top Stocks to Buy in March 2023

Given their solid financials and high-growth prospects, these two stocks are excellent buys right now.

Read more »

Male IT Specialist Holds Laptop and Discusses Work with Female Server Technician. They're Standing in Data Center, Rack Server Cabinet with Cloud Server Icon and Visualization
Tech Stocks

Is Kinaxis Stock a Buy at 52-Week Highs?

Kinaxis stock is up 31% in the last six months, though 5% in the last year. So as the stock…

Read more »

healthcare pharma
Tech Stocks

Should You Buy WELL Health Stock After Q4 Earnings?

Given its solid financials, healthy growth prospects, and attractive valuation, I am bullish on WELL Health.

Read more »

A data center engineer works on a laptop at a server farm.
Tech Stocks

2 Tech Stocks That Could Set You Up for Life

Canadian investors can set themselves up for the future with top tech stocks like Descartes Systems Group Inc. (TSX:DSG).

Read more »

dividends grow over time
Tech Stocks

Got $1,000? Buy These Hot Growth Stocks Before They Take Off

Investors won’t want to miss these buying opportunities. Here are three discounted growth stocks to load up on today.

Read more »

Woman has an idea
Tech Stocks

2 No-Brainer Stocks to Buy With $500 Right Now

Given their solid financials, healthy growth prospects, and attractive valuation, I am bullish on these two TSX stocks.

Read more »