Stocks from rate-sensitive sectors were battered last year by the rate hike campaign by the Bank of Canada. Before the fourth quarter of 2022, the TSX was down 13.1% and eventually posted a negative return of 8.7% for the year. At the start of October 2023, Canada’s primary stock market was up by only 0.81%.
As year-end draws near, the fear of more rate hikes has unsettled rate-sensitive sectors again. Communication services, utilities, and real estate are on the downtrend. However, two companies in the energy sector and one industrial stock seem least affected by the strong headwinds.
Shawcor Ltd. (TSX: MATR), Total Energy Services Inc. (TSX: TOT), and Black Diamond Group (TSX: BDI) should be on your watchlist. These growth stocks have delivered more than 300% in three years and are poised for massive growth beyond 2023.
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New name and brand image
Shawcor rebranded in early June 2023 from an energy services organization into a materials technology company. The $1 billion firm, through its diverse portfolio of brands offering, provides engineered solutions to support infrastructure projects. Mattr Infratech is the rebranded name, but Shawcor Ltd. remains the legal name.
Its President and CEO, Mike Reeves, said the rebranding marks a new chapter for the organization. The new name and brand image reflect the nimble, modern, energetic workforce and align with the transformed portfolio.
Reeves adds, “As we look to the future, we will leverage our new image, our differentiated offerings and our underlying core competencies in materials technology to deliver high-value, reliable, environmentally responsible products into critical infrastructure markets around the world.”
Shawcor boasts a 532.8% return in 3 years. At $14.87 per share, the year-to-date gain is 8.2%. Based on market analysts’ 12-month average price forecasts, MATR’s return potential is 54.3% ($22.94).
Highly profitable business lines
Current investors of Total Energy Services enjoy a 6.5% positive return year to date ($8.92 per share) on top of the 3.59% dividend yield. The business lines of this $357.4 million diversified energy services supplier include drilling, completion, production, transportation, oil and gas process equipment, and natural gas compression.
The energy stock rose from obscurity and is now among the standout growth stocks. TOT ranks 24th in the flagship TSX30 program, showcasing the top performers. Its overall return in 3 years is a fantastic 331%. In the first half of 2023, revenue increased 31% year over year to $446.6 million, while net income soared 253% to $30.2 million from a year ago.
Niche player
Black Diamond is also a TSX30 winner (rank 30) in 2023. At $6.61 per share, the industrial stock is up 38.2%. Market analysts recommend a strong buy rating, with a 12-month average price target of $9.08 (+37.37%). The $398 million company is a niche player and operates in the rental and leasing services industry.
Two core segments are growth drivers and revenue generators. The Modular Space Solutions segment provides modular space rentals to customers in various sectors. BDI’s Workforce Solutions provides workforce housing solutions, turnkey lodging provision, and travel management logistics services.
Winning investments
The growth trajectories of Shawcor (now MATR), Total Energy Services, and Black Diamond are unstoppable. The businesses of these winning investments thrive, notwithstanding the challenging environment.
