The Canadian stock market recovered by 8.1% in 2023 after witnessing 8.7% value erosion in the previous year as early signs of easing inflationary pressures in the United States and Canada raised investors’ expectations that central banks will soon start easing their monetary stance. This is one of the key reasons technology stocks performed exceptionally well last year.
In this article, I’ll talk about three top-performing TSX Composite components of 2023 and discuss whether they can continue rallying in 2024.
Celestica stock
Celestica (TSX: CLS), with its eye-popping 154.3% gains in 2023, topped the list of rallying stocks on the Toronto Stock Exchange. It’s a Toronto-headquartered manufacturing and supply chain solutions company mainly focused on the technology sector. CLS currently has a market cap of $4.4 billion, as its stock trades at $37.33 per share.
Last year’s big rally in CLS stock could be a result of its solid financial performance, despite macroeconomic challenges. In the first three quarters of 2023, Celestica’s total revenue rose 11.8% YoY (year over year) to US$5.8 billion, helping it increase adjusted net earnings by 23.7% to US$1.67 per share. With this, the company seemed on track to surpass its full-year 2023 financial outlook.
As Celestica remains confident in its long-term strategy, along with an expectation of continued earnings growth in 2024, I wouldn’t be surprised if it continues to be among the top-performing TSX stocks this year as well.
Shopify stock
The Canadian e-commerce platform giant Shopify (TSX: SHOP) stock also more than doubled in value in 2023. With outstanding 119.4% gains, SHOP claimed the second spot in the list of top-performing TSX stocks of 2023. The stock currently trades at $99.58 per share and a market cap of $127.9 billion after declining by 3.5% in the first week of January 2024.
Shopify’s spectacular financial performance in the last few quarters could be one of the main reasons responsible for the big rally in its share prices last year. The Ottawa-headquartered firm’s sales grew positively by 27.2% YoY in the first three quarters of 2023 to US$4.9 billion. More importantly, it posted adjusted earnings of US$0.39 per share in these three quarters combined, compared to its adjusted net loss of US$0.03 per share in the corresponding period of the previous year.
Even as macroeconomic uncertainties might keep Shopify stock volatile in the short term, its continued focus on expanding its portfolio of innovative e-commerce services with its consistently growing subscription solutions customer base could drive this top TSX performer even higher in 2024.
Cameco stock
With its solid 86.2% gains, Cameco (TSX: CCO) was also among the top TSX gainers of 2023. This Saskatoon-based uranium company currently has a market cap of $24.5 billion, as its stock trades at $56.48 per share after correcting by 1.1% in the first week of January.
Soaring uranium prices and a transition back to a tier-one production cost structure strengthened Cameco’s financial performance in recent quarters with improved gross profit. This was the key reason why the company’s adjusted earnings of $0.32 per share in the third quarter of 2023 crushed Street analysts’ expectation of $0.12 per share. Cameco is experiencing strong industry demand, with heightened security of supply concerns and a decade-high volume of industry contracting, which can help its share prices trade on a firm note in 2024 as well.
