Growth investors didn’t have much to cheer about last year. Many growth stocks on the TSX are currently trading below all-time highs that were set in late 2021. The market has gotten off to a hot start this year, but there’s still ground to make up after the loss-filled year in 2022.
In the short term, there’s a very good chance that we’ll see volatility continue. That could cause investors to be hesitant about buying growth stocks today. Over the long term, though, I truly believe that we are not going to see discounted prices like this for some time.
The TSX is loaded with high-quality growth stocks trading at bargain prices, and I certainly won’t be on the sidelines.
With that, I’ve reviewed two top growth stocks that any long-term investor would be wise to have on their radar. The two stocks may be trading below all-time highs, but after a high-flying start to 2023, that may not be the case for much longer.
Growth stock #1: Shopify
Shopify (TSX:SHOP) shareholders have been on one a heck of a ride since the beginning of 2020. Alongside many other tech stocks, Shopify rebounded from the COVID-19 market crash by delivering monster returns in a very short period of time. But after topping out in late 2021, it was mostly downhill for the stock up until late 2022.
The beaten-down tech stock got off to a torrid start in 2023. Shopify shares surged more than 30% in the month of January alone. The stock has cooled since then, now up about 35% on the year, still easily outpacing the returns of the S&P/TSX Composite Index.
Despite the tech company’s massive market cap value of $85 billion, there’s been no shortage of volatility for Shopify. The growth stock lost more than 70% of its value in 2022. While that’s obviously a huge loss, it wasn’t all that surprising after returning more than 150% in 2020.
Long-term investors that have been able to put up with Shopify’s volatility have been well rewarded. And with the company in a prime position to see growth continue, I’ll gladly add to my position while shares are trading at discounted prices.
Growth stock #2: Kinaxis
Kinaxis (TSX:KXS) has experienced a similar trend to Shopify since 2020. Shares surged in the second half of 2020 but continue to trade below all-time highs set in late 2021.
Due to the niche market that Kinaxis serves, it’s understandable why the company can fly under the radar for investors. Kinaxis provides cloud-based software for supply chain operations to customers across the globe. It’s not the most exciting industry but certainly an important one, especially over the past three years with all of the changes in consumer shopping behaviour.
Since Kinaxis joined the TSX in 2014, it’s been as dependable of a market-beating growth stock around. Volatility has spiked in recent years but shares are still up a market-crushing 120% over the past five years.
With shares up more than 15% this year and close to 30% over the past 12 months, Kinaxis is well on its way to returning to all-time highs. Investors may need to act fast if they’re looking to take advantage of this rare discount.
