There is no crystal ball that can tell the future performances of stocks, but the price usually reflects the company’s performance. As of this writing, some stocks attract investors, despite the elevated market volatility.
Computer Modelling Group (TSX: CMG) and Ag Growth International (TSX: AFN) keep surging, while the bull case for high-growth stock NuVista Energy (TSX: NVA) remains strong. These three stocks have plenty of room to run and soar higher in the coming years.
Rare dividend payer
Information technology is the hottest sector thus far in 2023, and Computer Modelling is one of its top-performing constituents. The $818.6 million computer software company produces reservoir simulation software for the oil and gas industry.
CMG boasts the most advanced recovery processes, and its superior technology is well known in the industry for breaking new grounds for capabilities. In the first quarter (Q1) of fiscal 2024 (three months that ended June 30, 2023), total revenue and net income grew 29% and 81% to $20.75 million and $6.9 million versus Q1 fiscal 2023.
Notably, CMG’s perpetual software licenses climbed 349% year over year to $1.85 million. According to its chief executive officer (CEO), Pramod Jain, strong market dynamics in energy transition and the core business drove profitability. He expects technology to add scale, intelligence, and efficiency to CMG’s current operating model.
Jain added that CMG commits to delivering science-based, fit-for-purpose workflows and solutions to receptive end users as the industry races to digitization. Performance-wise, the tech stock’s 77.22% year-to-date gain ($10.13 per share) dwarfs the sector’s +31.62% positive return. CMG also pays a 2.2% dividend.
Food security
Ag Growth International, or AGI, engages in planning, project management, engineering, and manufacturing of solutions and systems for fertilizer, seed, grain, feed, and food (the five platforms). The $1.01 billion company is synonymous with global food infrastructure. Its two core segments, Farm and Commercial, bring in sales and income.
The Q2 2023 sales revenue was flat, but profit reached $18 million compared to the $2.26 million net loss in Q2 2022 due to strong margin performance.
“A clear focus on manufacturing efficiency, centralized procurement, structured pricing programs, workforce optimization and many other operational excellence initiatives are yielding clear benefits in terms of margin expansion,” said AGI’s president and CEO, Paul Householder.
Mr. Householder anticipates the benefits of management’s efforts to sustain through the rest of 2023 and into 2024. At $53.25 per share (+23.88% year to date), AFN pays a modest 1.13% dividend.
High-growth stock
NuVista Energy is on my buy list for its inclusion in the 2023 TSX30 List (rank number two). The gains it has delivered are also astronomical. At $12.90 per share, the year-to-date gain is only 3.37%, but the overall return in 3.01 years is 1,553.85%. Market analysts see a return potential between 21% and 59% in one year.
The $2.79 billion oil & natural gas company operates primarily on scalable and repeatable condensate-rich Montney formation at Alberta Deep Basin (Pipestone and Wapiti areas). The high-value condensate volumes associated with natural gas production and the vast scope of NuVista’s resource play are competitive advantages.
Business success
CMG, AGI, and NuVista Energy stand out in 2023 because of their market-beating returns. The share prices today could rise much higher if business success continues.
