It’s been a year of redemption for many growth stocks on the TSX. Following the COVID-19 market crash in 2020, stocks across the TSX surged in the second half of 2020 and through most of 2021. But since then, there has been no shortage of companies that have been riding a gradual decline.
The market may only be up slightly this year, but plenty of individual stocks are well into double-digit growth territory.
As a long-term investor myself, I remain bullish as ever over the long term. In the short term, though, I’m still prepared for more volatility.
Having a long-term time horizon allows an investor to take advantage of volatile market periods. And with lots of high-quality stocks still trading at massive discounts today, now could be an incredibly opportunistic time to load up.
Here are three picks for long-term growth investors looking to put some cash to work in the Canadian stock market.
Shopify
In late 2021, shares of Shopify (TSX: SHOP) were up more than 200% from its lows of the COVID-19 market crash. Today, the tech stock is trading at close to pre-pandemic prices.
It’s been a wild ride for Shopify shareholders over the past few years. But now, with shares up close to 50% over the past year, the tech stock is making a strong case that it bottomed out in 2022 and is ready to run to new all-time highs.
Expectations remain high for Shopify, but the company continues to gain market share in the growing e-commerce space.
For a company with a track record like Shopify, I’ll gladly add to my position while prices continue to trade at a discount.
goeasy
In comparison to Shopify, goeasy (TSX: GSY) often flies under the radar when it comes to growth stocks. But when looking at returns over the past decade, not many TSX stocks can match what goeasy has delivered.
The consumer-facing financial service provider has unsurprisingly taken a hit in this high-interest rate environment. Shares are now down close to 40% from all-time highs that were set in late 2021. That’s even with the stock up more than 50% since the beginning of May.
Those betting that interest rates have peaked may want to consider adding some shares of this proven market beater.
Descartes Systems
Not many tech stocks are trading near all-time highs right now, but that list does not include Descartes Systems (TSX: DSG). With shares up 30% from their 2022 lows, Descartes Systems is now just 10% shy of setting new all-time highs.
The $8 billion company may operate in a niche industry, but it sure is a growing one. Descartes Systems provides its global customers with cloud-based supply chain solutions, which many companies have been more dependent than ever on since the beginning of the pandemic.
The tech stock has quietly crushed the market’s returns over the past five years, growing more than 120%. In comparison, the S&P/TSX Composite Index has returned less than 30%.
For growth investors looking for market-beating returns but not willing to endure Shopify-level volatility, Descartes Systems is an excellent option.
