After remaining within the correction territory for several months, the TSX Composite benchmark registered a handsome recovery toward the end of 2023. Even as the Canadian market index inched up by 7.3% in the fourth quarter of the year, many TSX stocks still appear cheap based on their long-term fundamental outlook. This presents a great opportunity for long-term investors to invest in these promising TSX stocks now, which hold the potential to deliver outstanding returns, possibly even doubling their investment within the next five years.
In this article, I’ll highlight two such hot TSX stocks with the prospect of yielding exceptional returns over the next five years.
A top TSX fintech stock to buy now
Nuvei (TSX:NVEI) is a Canadian fintech firm headquartered in Montréal that primarily focuses on providing payment technology solutions to businesses across the globe. The company operates through diverse channels and regions, which should help its business remain stable in the long run.
This top TSX stock currently has a market cap of $4.5 billion, as it trades at $32.19 per share. After witnessing more than 65% value erosion in the previous couple of quarters, NVEI stock surged 71% in the fourth quarter of 2023 as expectations of improving economic outlook and interest rate cuts drove a spectacular broader market rally, especially in growth stocks.
In the first three quarters of 2023, Nuvei’s sales rose 39.4% YoY (year over year) to US$868.4 million with the help of strong momentum across all its key channels. Although factors such as foreign currency headwinds and an increase in its net finance cost due to the reduction of the revolving credit facility affected its bottom line in these quarters on a YoY basis, consistent strengthening demand for its payment solutions encouraged the management to raise total volume and revenue guidance for the full year 2023.
Moreover, Nuvei’s strong financial growth trends, consistently rising volume, and expanding business presence make it a hot TSX stock to invest in for the long term.
And a mobility tech and cybersecurity-focused TSX stock to buy
BlackBerry (TSX:BB) could be another attractive TSX stock to consider right now, which hasn’t seen much appreciation of late, despite its consistently improving long-term fundamental outlook. This Waterloo-based software company currently has a market cap of $2.6 billion as its stock trades at $4.48 after witnessing 39% value erosion in the last six months.
The company primarily focuses on providing enterprise cybersecurity solutions to private and public organizations across the globe, with its client base growing year by year. Although the challenging macroeconomic environment has affected its cybersecurity segment growth in recent quarters, the segment’s long-term growth outlook remains strong, with more businesses building their online presence and looking to spend more on quality tech solutions to protect their data.
Besides its well-established enterprise cybersecurity business, BlackBerry has increased its efforts to expand its presence in the Internet of Things segment by developing advanced technological solutions for futuristic mobility. These efforts make this TSX stock even more attractive to buy now and hold for at least the next five years.
