The Canadian stock market has shown signs of strength this year but is struggling to return to all-time highs. The S&P/TSX Composite Index is up close to 5% in 2023, but the index is still down nearly 10% since early 2022.
On the surface, with the market up about 5% year to date, it may seem as if it’s been a somewhat uneventful year. However, as many investors know, 2023 has had no shortage of ups and downs. There are plenty of individual TSX stocks up double digits this year, whereas many others are still working to return to pre-pandemic price levels.
Taking a long-term mindset
Investors looking for short-term gains may want to consider investing in growth stocks, particularly in the high-flying tech sector. After a rough year for the market in 2022, many tech stocks have quickly rebounded in 2023, returning market-crushing returns through the first seven months of the year.
As a growth investor myself, I’ll gladly take the recent gains. I’m also skeptical that this may be followed by another significant pullback. We witnessed a similar story in the second half of 2020 when the market’s surprisingly strong rebound from the COVID-19 market crash was followed by a massive selloff in 2022.
Due to my long-term time horizon, I certainly won’t be selling shares of any of my top tech holdings anytime soon. However, I likely won’t be adding to those positions, either. There are too many good deals on the TSX that I’d prefer to use my capital on right now.
With that in mind, I’ve reviewed two top stocks that are both currently trading at a discount of more than 30%. It very well could take more than the remaining five months of the year to return to all-time highs. Over the long term, though, these are two solid market-beating stocks that Canadian investors can feel good about loading up on today.
TSX stock #1: Brookfield Renewable Partners
Now could be an opportunistic time to invest in the beaten-down renewable energy space. Many leaders across the sector, including Brookfield Renewable Partners (TSX:BEP.UN), are trading at rare discounts today.
Shares of the $25 billion global renewable energy provider are down almost 35% from early 2021. Still, Brookfield Renewable Partners’s 80% return over the past five years is good enough for more than doubling the returns of the broader Canadian stock market.
In addition, while shareholders are waiting for Brookfield Renewable Partners to return to its market-beating ways, there’s a juicy 4.5% dividend yield to enjoy.
TSX stock #1: goeasy
Growth investors with a long-term time horizon should have goeasy (TSX:GSY) at the top of their watch lists.
The consumer-facing financial services provider has taken a short-term hit from the high-interest-rate environment. The stock is down more than 40% since late 2021. Shares are nearing a 20% gain on the year but still have a ways to go before returning to all-time highs.
There’s a good chance that we’ll need to see interest rates cool off before goeasy is back to delivering market-crushing gains. At these prices, Canadian investors able and willing to remain patient should seriously consider loading up on this top growth stock.
