The volatility from 2022 hasn’t slowed all that much in 2023 but at least the S&P/TSX Composite Index is positive year to date. It’s been a slow grind attempting to return to all-time highs, but the Canadian stock market has been making progress over the past 12 months.
There’s no denying the uncertainty that investors are faced with today. Inflation and interest rates both remain far higher than pre-pandemic levels. In addition, a recession occurring in 2023 is still not out of the question.
Despite the short-term uncertainty, though, now is not the time for investors to be on the sidelines — at least not those with long-term time horizons.
The recent volatility has created plenty of great buying opportunities for Canadian investors.
I’ve put together a list of three top TSX stocks to add to your watch list this month.
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TSX stock #1: goeasy
The high-interest-rate environment has taken a massive blow on what has been an incredibly dependable growth stock over the past decade.
Shares of goeasy (TSX: GSY), the consumer-facing financial services provider, have been cut in half from all-time highs set in late 2021. Still, the growth stock is up a market-crushing 160% over the past five years.
It’s only a matter of time before goeasy sees demand return. Interest rates will normalize, as will inflation, ultimately leading to an increase in discretionary spending. It may take time, but there’s no reason to believe that goeasy won’t eventually be back to its market-beating ways.
Patient investors looking to add some growth to their portfolios should seriously consider taking advantage of this bargain price.
TSX stock #2: Northland Power
goeasy isn’t the only stock that’s had a rough past couple of years. The renewable energy sector as a whole has been on the decline since early 2021.
Shares of Northland Power (TSX: NPI) are down more than 30% since the beginning of 2021. Excluding dividends, the renewable energy stock has returned just about the same amount of growth as the S&P/TSX Composite Index over the past five years.
As a huge bull on the renewable energy space, I’ve got a few discounted stocks on my watch list, including Northland Power.
Similar to with goeasy, it may take time for Northland Power to return to delivering market-beating gains. But at least in the meantime, shareholders can benefit from a high-yielding 4% dividend at today’s stock price.
TSX stock #3: Descartes Systems
The last pick on my list isn’t trading at a discount like the first two companies. Instead, shares of Descartes Systems (TSX: DSG) are trading close to all-time highs today.
The tech stock has been on a steady rise over the past year. Shares are up close to 30% over the past 12 months and more than 150% over the past five years.
As a logistics and supply chain solutions provider, it’s understandable why Descartes Systems may not be a household name for all investors. But when you zoom out and look at the growth stock’s performance over the past two decades, not many TSX stocks can compete with Descartes Systems’s track record.
If you’re willing to hold for the long term, there’s absolutely nothing wrong with buying a top-quality business while it’s trading at all-time highs. Descartes Systems is in a prime position to continue delivering market-beating gains for many more years.
