Making investments in companies, the products or services of which can have high demand in future, is a great way to ensure long-term returns. By assessing the future growth potential of certain companies, investors can gain substantial returns if they invest before anyone else, when the market sentiments are still bearish.
In this regard, here are two promising stocks that investors can consider adding to their Tax-Free Savings Accounts (TFSAs).
Curaleaf
Curaleaf (CNSX:CURA) is a global provider of cannabis and its associated products. In the U.S., this operates in 15 states, with around 150 dispensaries. Moreover, in Europe, this organization is the biggest vertically integrated cannabis company.
As per reports dated April 10, 2023, Curaleaf has completed the acquisition of Deseret Wellness, Utah’s largest cannabis operator. The company’s executive chairman Boris Jordan states that this acquisition will help the company expand its presence in the key emerging markets.
Moreover, Curaleaf also reported in late March that the company has expanded its brand portfolio with the release of JAMS. It features flavour-forward cannabis edibles that target new cannabis consumers along with those who are new to trying edibles. The product line-up includes jellies, starts, chocos, and fast-acting jellies, with a variety of dosage options.
These high-margin products should bode well for the company’s margins over the long term. So long as the company can continue to differentiate itself in this commoditized space, there’s a lot for investors to like.
This has bled through to the company’s fourth-quarter (Q4) 2022 results, which showed record revenue (growing 12% year over year), reaching US$1.34 billion. Adjusted earnings before interest, taxes, depreciation, and amortization also improved to US$305 million, growing 17% over the prior year.
So long as Curaleaf can continue this momentum, there’s lots to like. And with more states coming aboard the legalization train, Curaleaf is well positioned for (eventual) federal legalization in the U.S.
The Metals Company
The Metals Company (NASDAQ:TMC) is a Canadian startup company that deals in deep-sea mineral exploration. Its activities include collecting, processing, and refining polymetallic nodules (PMN). The main exploration area of this organization is the Clarion Clipperton Zone (CCZ) in the southwestern part of San Diego. This organization primarily targets manganese, copper, nickel and cobalt products that can be used in electric vehicles, manganese alloy production, and more.
As per reports dated February 22, 2023, the Metals Company has entered a strategic partnership with Low Carbon Royalties. The latter is an organization that provides funding to entities involved in low-carbon emitting energy technologies, production, energy storage, and more.
TMC has paid a future revenue royalty for its NORI project to Low Carbon Royalties. The NORI, or Nauru Ocean Resources Inc., Project is sponsored by the government of the Republic of Nauru. It is a comprehensive seabed-to-surface research program in collaboration with the country of Nauru, researchers and mining explorers.
In exchange, TMC received US$5 billion, along with a 35% stake in the latter. The Metal Company’s chief executive officer and chairman Gerard Barron has also joined Low Carbon Royalty’s board of directors as a result of the partnership.
Additionally, TMC has entered a memorandum of understanding with PAMCO. This will help the exploration company assess the profitability of processing 1.3 million tons of PMN yearly from 2025, which is a part of its NORI-D Project Zero.
Bottom line
Both companies operate in sectors that have high growth potential in the long term. While Curaleaf is on its own to become an established entity in the cannabis-products sector, the Metal Company’s entrepreneurial ventures will surely help the startup reach new heights. Thus, investors should consider adding these stocks to their portfolios before others do.
