Canadian stocks rebounded strongly in 2023, as the fear of economic slowdown moderated. Further, the decline in the inflation rate and anticipated rate cuts indicate that the rally in equities could be sustained in 2024 and beyond. Moreover, a few fundamentally strong stocks haven’t participated in the rally and have lost value due to short-term headwinds, which presents a compelling buying opportunity.
With this backdrop, let’s look at my five favourite stocks to buy right now.
Shopify
Shopify (TSX:SHOP) stock jumped over 97% over the past year. Despite this growth, shares of this e-commerce platform provider are trading well below their highs, implying substantial room for growth in the coming years. The company’s dominant positioning in the online commerce sector, durable revenue growth rate, and focus on generating sustainable profitability augur well for growth.
Shopify stands to benefit from the ongoing shift in selling models towards omnichannel platforms. Further, its emphasis on innovation and the growing adoption of its products, such as Capital and Markets, bode well for future growth. Additionally, Shopify’s asset-light model, cost-cutting initiatives, and strategies to expand margins position it well to generate sustained earnings, which will drive its share price higher.
goeasy
goeasy (TSX:GSY) is my favourite long-term pick. The company’s ability to consistently grow its revenue and earnings at a double-digit rate and its commitment to return cash to shareholders support my bull case. goeasy provides secured and unsecured lending to subprime borrowers. Thanks to its stellar financial performance, its stock has gained about 51% in one year and has appreciated nearly 374% in value in value over the past five years.
Looking ahead, the momentum in goeasy’s business will likely be sustained due to its ability to drive loans, solid payments and credit performance, and operating efficiency. Additionally, the large subprime lending markets and strategic acquisitions will accelerate its growth rate. goeasy stock is trading cheap, at a forward price-to-earnings multiple of 9.6, presenting a solid opportunity to buy its shares now.
Aritzia
Aritzia (TSX:ATZ) stock lost nearly 50% of its value last year. However, this decline in Aritzia stock provides an opportunity to buy its shares at a discounted valuation and benefit from its recovery. Barring near-term challenges, Aritzia has managed to grow its revenue and earnings at a solid pace. Furthermore, Aritzia’s management remains upbeat and expects to grow its top line at a mid-teens rate through 2027.
It’s worth noting that the fashion house continues to open new boutiques, which will likely accelerate its growth. Further, it is expanding in high-growth markets. Also, the company is focusing on introducing new styles, improving pricing, and controlling costs. All these measures are expected to boost its revenue and profitability and lead to a solid recovery in its share price.
WELL Health
Next up is WELL Health Technologies (TSX:WELL). The digital healthcare company is growing rapidly, while its stock is trading extremely cheap, making it a compelling investment near the current levels. WELL Health’s omnichannel patient visits continue to grow. Moreover, the company is profitable, which is positive.
Looking ahead, its higher patient visits, investments in artificial intelligence, and new product launches will support its solid organic growth. Moreover, its accretive acquisitions will expand its products and solidify its competitive positioning, accelerating its growth rate and driving its share price higher.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) is a low-risk and high-growth stock. The convenience store operator has consistently grown its top and bottom lines rapidly, which has driven its share price higher. ATD stock has risen by 33% and 534% in the past one and 10 years, outperforming the broader markets by a wide margin.
Its extensive store base and value pricing strategy will drive its revenue. Moreover, its cost-reduction measures and focus on expanding high-margin private label offerings will cushion its margins, support higher dividend payments, and drive its share price higher.
