The stock of Canadian cryptocurrency miners, including Bitfarms (TSX:BITF), retained a performance lead on the top-performing TSX stock rankings going into the fourth quarter of 2023. Growing demand powered up Hammond Power Solutions (TSX: HPS.A) stock to new heights, while Cameco (TSX: CCO) stock could sustain gains into 2024. Lets take a closer look at the top-performing TSX growth stocks to see which ones cold keep gaining.
Bitfarms stock retains leading gains
Cryptocurrency miner Bitfarms was one of the best-performing TSX stocks during the first nine months of 2023. Up 151.7% year to date, Bitfarms stock still leads, even as it endured negative momentum during the past few months.
Why has Bitfarms stock rallied in 2023? The company’s growing productive capacity, debt reduction strategy, and a general recovery in cryptocurrency prices in 2023 propelled Bitfarms stock price early this year.
The crypto miner has expanded its operating capacity to 233 megawatts (MW) so far in 2023, up 24% year to date. It produced 411 Bitcoin in September, up from 383 coins in August despite higher mining difficulty.
Can BITF stock keep rising? The small-cap stock has been consolidating over the past three months, down 24.7% during the period. Shares traded 20.7% lower during the past month, and the ongoing consolidation could last longer, more so if a new round of rate hikes takes effect over the next few months to tame stubborn inflation.
Other crypto mining stocks that have rallied in 2023 include HUT 8 Mining stock, which is up 128% year to date and has experienced negative momentum with a 40% drop during the past three months, and Hive Digital Technologies which is up 108% so far in 2023 but lost 34% of its value during the past three months. The two may suffer a similar fate to Bitfarms stock if another crypto winter visits the market.
Hammond Power Solutions
Hammond Power Solutions is a $466 million small-cap power transformer and magnetics manufacturer that’s having a great year in 2023 as demand for its products soars. Its stock price is up 150% year to date and latest quarterly dividend is up 50% from 2022 levels, and investors are smiling.
Why is Hammond Power Solutions stock surging in 2023? The company reported 29.5% revenue growth for the first half of 2023, and net income nearly doubled (up 92.8% year over year). What’s more, the company’s order backlog increased by 44.1% year over year by mid-year.
The business is booming and Hammond Power Solutions’ ongoing $40 million capital investment program is underway to expand production capacity and grow sales even further.
Can Hammond Power Solutions stock keep gaining? Steady revenue and earnings growth are specially qualities that may sustain positive growth momentum on the company’s stock price. The company’s above average Return on Equity (ROE) of 29.3% remains attractive for new money, and its operating margins around 12.3% remain far above industry average of 7.6%. Shares remain fairly priced given a low forward price-to-earnings (P/E) multiple of 9.7.
Most noteworthy, Hammond Power Solutions has raised its quarterly dividend by 20% for September, and the current payout is 50% higher year over year. Although the dividend yield is low at 1.2% after a fine run in the stock price.
Cameco stock
Leading North American nuclear fuel giant Cameco stock has rallied by 74% so far this year. The $22.8 billion green energy stock is rising from a decade-long uranium downturn, and should allow investors to ride the current nuclear market boom for longer as nuclear demand grows.
Cameco has restarted production on previously idled low-cost uranium production assets in Canada. Post a uranium downmarket that lasted for more than a decade, it is retaining key customers. Meanwhile, growing production and supply into long-term contracts could sustain higher operating cash flows and returns to shareholders for longer.
Uranium contract prices averaged US$59 in August, and prices breached the US$65 a pound level in September. If market projections for a $80 uranium pound come to pass by December, Cameco could capture record contract prices this year to secure its long-term success.
Most noteworthy, higher uranium prices and growing cash flows may enable Cameco to raise its annual dividend over the next few years. The company currently pays a token dividend of $0.12 per share per annum yielding 0.2%.
Cameco stock may keep steadily rising into the next year if the uranium market sustains its currently strong recovery for longer.
