Investors Are Warming Up to Stocks Again: Here Are 3 to Get Excited About

Given their discounted stock prices and improving market conditions, these three TSX stocks could deliver superior returns in the long run.

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Amid easing inflationary pressure and the optimism that the Federal Reserve could ease its monetary tightening initiatives, the Canadian equity markets are witnessing healthy buying. The S&P/TSX Composite index has increased by over 2.4% compared to last month’s lows. So, amid improving investors’ sentiments, here are three overlooked growth stocks you could add to your account to earn superior returns in the long run.

Cargojet

After losing close to 30% of its stock value last year, Cargojet (TSX:CJT) also continues to be under pressure this year. It is trading over 17% lower for this year. The weak quarterly performances and economic outlook have lowered the company’s stock price. The company has blamed the shift in consumers’ focus from buying goods to spending on services in the post-COVID period for its weak performance in the March-ending quarter.

Amid the steep correction, the company trades at 1.7 times its projected sales for the next four quarters, making it an attractive buy. The company’s long-term growth prospects look healthy, given the growing adoption of online shopping and increased transition towards narrow-body aircraft by passenger airlines. Also, the company’s long-term strategic partnerships with top logistics companies, unique overnight delivery service, and revenue diversification have well-positioned the company for long-term growth.

So, I believe investors with three or more years of investment horizon can start accumulating the stock to earn superior returns.

BlackBerry

Second on my list is BlackBerry (TSX:BB), which has a strong presence in high-growth markets, such as IoT (Internet of Things) and cybersecurity. Amid the renewed interest in tech stocks, the company trades around 48% higher for the year. Despite the recent surge, it still trades at a discount of 88% compared to its 2021 highs.

Meanwhile, the demand for the company’s products and services is growing amid the growing popularity of connected and autonomous cars. Notably, the company has released its new scalable and high-performance QNX operating system, which could boost software development efforts for next-gen vehicles and IoT systems.

Further, its artificial intelligence-powered cybersecurity solutions could strengthen its position in the growing cybersecurity space. So, BlackBerry’s long-term growth prospects look optimistic, thus making it an attractive buy at these levels.

Lightspeed Commerce

My final pick is Lightspeed Commerce (TSX:LSPD), which offers point-of-sale and e-commerce solutions to small- and medium-scale businesses. After a challenging 2022, the company has witnessed a healthy buying this year, with its stock price rising by 21.4%. However, the company is still down around 88% compared to its 2021 highs. It trades at an attractive price-to-book multiple of 1.1.

Notably, Lightspeed Commerce is growing its revenue amid expanding customer locations and increasing average revenue per user. Supported by its new product features, the company’s customer base is moving towards higher gross transaction value locations, which is encouraging. Meanwhile, the company has also planned to make its Lightspeed Capital available with around 80% of its customer locations by the end of fiscal 2024. These initiatives could boost its financials in the coming quarters.

Further, Lightspeed Commerce is improving its operational efficiency and is confident of achieving adjusted earnings before interest, tax, depreciation, and amortization breakeven or better in fiscal 2024. So, I believe Lightspeed Commerce could deliver higher returns over the next three years.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cargojet. The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy.

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