3 Growth Stocks Set to Skyrocket as the Market Snaps Back

Three growth stocks are poised to skyrocket, as the resilient TSX prepares to snap back in 2023.

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Portfolio managers and strategists surveyed by Reuters in February 2023 believe the TSX will rally and post a 6.2% gain for the year. The chances of a rebound are high, given the remarkable resilience of Canada’s primary stock exchange and decelerating inflation.

Meanwhile, three growth stocks will likely skyrocket, as the market snaps back. Why not scoop them now before they become expensive?

Positive long-term outlook

Market analysts recommend a buy rating for Methanex (TSX:MX), and they have price targets between $77 (average) and $88 (high) in one year. At $57.13 per share (+11.9% year to date), the basic materials stock pays a modest 1.79% dividend.

The $3.98 billion company is the world’s largest producer of methanol, an organic chemical used industrially and essential for everyday life. In the first quarter (Q1) of 2023, the net income of $60 million was 46.3% higher than in Q4 2022 ($41 million) but 49.6% lower ($119 million) compared to Q1 2022.

Still, there should be confidence in investing in Methanex, because it’s a leader in an industry with a positive long-term outlook. Furthermore, its newest methanol plant, Geismar 3, will begin commercial operations by Q4 2023. Management expects the highly advantaged project to enhance Methanex’s cash flow capability significantly.

Consistent performance

Torex Gold Resources (TSX:TXG) is up nearly 34% year to date, but a breakout still looms. Market analysts are bullish on this mining stock and have a high price target of $32.67 in 12 months, or a 57.5% increase from its current share price of $20.74. The $2.16 billion Toronto-based mining firm is the second-largest gold producer in Mexico.

In Q1 2023, total gold production increased by 9.3% to 122,918 ounces versus Q1 2022. On the financial side, revenue and net income rose 10.2% and 70.5% year over year to US$228.8 million and US$68.2 million. Company president and chief executive officer (CEO) Jody Kuzenko said, “2023 is an important year for Torex, and we are off to an excellent start.”

Kuzenko added, “The consistent operational and cost performance that investors have come to expect of Torex continued in the first quarter of 2023, placing the company in an excellent position to deliver on full-year operational guidance for a fifth year in a row.”

Bright outlook in a niche market

MDA (TSX:MDA) is an exciting prospect that operates in the rapidly growing space economy. The $864.45 million leading provider of advanced space technologies and management believes now is the best time to invest in a high-growth technology.

At $7.26, current investors are up 13.44% year to date and market analysts have a 12-month average price target of $10 (+37.7%). Mike Greenley, MDA’s CEO, said, “We continue to see healthy market demand and interest in space technology with both government and commercial customers increasingly recognizing and funding civil and defence programs.”

In Q1 2023, revenue and net income jumped 57.2% and 91.7% to $201.9 million and $16.1 million. Besides the backlog at a healthy level and substantial contract awards in 2022, Greenley said MDA is well positioned to capitalize on strong customer demand and robust market activity.

Competitive advantages

Growth investing is back in 2023, as more companies exhibit resiliency and leverage their competitive advantages. Torex, Methanex, and MDA are potential multi-baggers, notwithstanding the challenging environment.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Methanex. The Motley Fool has a disclosure policy.

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