If you believe yourself to be a growth investor, then it’s imperative that you also find ways to cut tax implications in your portfolio. That way, you can see your positions snowball as fast as possible. One way to do that would be to use tax-advantaged investment accounts. For example, a Tax-Free Savings Account (TFSA) would be a great one to use for the everyday Canadian. This year, we were given an additional $6,500 of contribution room for TFSAs.
If you haven’t used up your contribution room yet, here are three growth stocks to invest in right now.
This is one of my favourite growth stocks
As far as Canadian growth stocks go, Constellation Software (TSX:CSU) is one of my favourite. This company isn’t very well known by those that aren’t familiar with the stock market. That’s because Constellation Software doesn’t operate a consumer-facing business. Instead, it operates in the background, acquiring vertical market software businesses. Upon acquisition, the company provides the coaching and resources necessary to turn those acquirees into exceptional business units.
Despite not being very well known by the general public, Constellation Software stock has had no issues growing over the years. This company held its initial public offering (IPO) in 2006. Since then, the stock has skyrocketed, gaining more than 15,000%. If you had invested $10,000 at the time of its IPO, you’d be a millionaire today. Over the past year, Constellation Software stock has gained 44%. To put this into perspective, the TSX has gained 5% over the same period.
Many may not consider this a growth stock, but its performance suggests otherwise
goeasy (TSX:GSY) is another stock that I’m very excited about. I first covered this stock on The Motley Fool in 2020, citing a massive opportunity for the company. Thus far, that’s proven to be the case. Since that initial article was published, goeasy stock has gained about 100%. That’s not bad for a company that many don’t deem to be a growth stock.
Why do people not consider this a growth stock? Well, many inadvertently associate growth stocks with the term tech stock. Unfortunately, that kind of thinking could be hindering your portfolio’s performance. There’s no denying that goeasy’s business isn’t as exciting as the hot tech stocks of today. However, you can’t dispute its stock performance over the past three years.
Another dark horse growth stock
Keeping with the theme of underappreciated growth stocks, I would suggest that growth investors consider buying shares of Alimentation Couche-Tard (TSX:ATD) in their TFSA today. This company operates more than 14,000 convenience stores across 24 countries and territories. If you didn’t know, Alimentation Couche-Tard also operates under different banners such as Mac’s, On the Run, Circle K, Daisy Mart, and more.
Like goeasy, the growth of this stock cannot be disputed. Over the past five years, Alimentation Couche-Tard stock has gained about 119%. That outpaces the TSX by a massive margin (22% over the same period). In addition, Alimentation Couche-Tard is an outstanding dividend distributor. A Canadian Dividend Aristocrat, this company belongs in every growth investor’s portfolio.
