Here’s my #1 Canadian Growth Stock Pick to Buy for April 2023

Up 69% year to date, this growth stock is my top choice on the TSX today, but also for investors seeking out a long-term hold.

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If you want a growth stock that’s going to make you look back on 2023 with fondness, there aren’t that many to consider at this point. But they do exist, and there is one that remains a favourite for me. The growth stock I’d consider is one that’s going to do well now, sure. But if you’re here at the Motley Fool looking for long-term wealth, that’s where things should really take off.

The growth stock to consider

The growth stock I would consider perhaps the best buy in April 2023 is WELL Health Technologies (TSX:WELL). There are many reasons, but first let’s get into basics.

Those basics include some compelling financial and share performance. Now granted, WELL stock hasn’t been around for very long. The company was founded in 2010, but began trading on the TSX today in April 2016. Even so, we can still look at movement to see whether this is a valuable stock.

In terms of the numbers, it definitely is about seven years on. While its price-to-earnings ratio is through the roof at 765 as of writing, its price-to-book ratio is far more reasonable at 1.5 times book value.

Then, there’s share performance itself. In the last year, WELL stock is back to where it was in April 2021. Shares have also increased 69% year to date, hence why it can be called a growth stock. Yet, this is still nowhere near its all-time highs.

Look to the past for future performance

WELL stock is one of those companies that absolutely crushed it during the pandemic. This showing came down to two factors. The first, of course, was the pandemic. As a virtual healthcare company, it provided a solution to the stay-at-home orders across Canada and indeed the world. However, it was also a tech stock. This put the company in a unique position, as two growth categories propelled the stock higher and higher.

The problem is, these same pressures eventually pushed the stock down as well. Pandemic stocks quickly began falling as restrictions eased. With a recession looming, tech stocks also dropped as investors decided to take their returns.

Nonetheless, it’s worth asking: Did WELL stock deserve the drop? In fact, not at all. The company continued to expand, becoming the largest outpatient clinic in Canada. It has since expanded into the United States as well, offering virtual healthcare and digital hospital services wherever it goes.

So what now?

After climbing 5,616% from its initial public offering (IPO) to all-time highs, there has certainly been a drop. Shares are still up 2,984% since its IPO on the TSX today, but of course that’s far lower than former highs.

That being said, it’s likely that WELL stock will hit those highs again. It continues to report quarter after quarter of record performance. That performance comes from contracts that bring in annual recurring revenue. In fact, WELL stock stated that it’s looking forward to strong growth through 2023 and beyond.

So after increasing its annual revenue to a record high, up 88% from the year before, with guidance even higher at up to $685 million, WELL stock looks like a strong option. Especially while shares remain at about half of all-time highs.

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 Amy Legate-Wolfe has positions in Well Health Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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