2023 was not the best year for stock market investors seeking multi-bagger, market-beating returns by investing in growth stocks.
The broader market jitters caused by uncertainties due to high inflation, growing key interest rates, and a litany of other issues made the markets too volatile to be conducive to investing in growth stocks. Even for thrill-seeking investors, allocating money to high-growth and high-risk stocks did not seem like a reasonable bet.
However, the end of 2023 saw the situation seemingly improve. As of this writing, the S&P/TSX Composite Index is up by 11.92% from its October 2023 low.
The development can be attributed to inflation cooling, interest rate hikes halting, and the anticipation of rate cuts later this year. While the economy might not be completely out of the woods yet, the stage might be set for a strong bull market in 2024.
Given the changing landscape, it might be more reasonable to consider investing in growth stocks again. To this end, I will discuss my top picks from growth stocks trading at attractive valuations that could be considered primed for growth in 2024.
Nuvei
Nuvei (TSX: NVEI) is a Montreal-based payments processing company with a market capitalization of $4.60 billion. The Canadian tech company specializes in providing payment technology and solutions to its customers.
It offers several services, including payment gateways, security and risk management, recurring and subscription billing, dynamic currency conversion, multi-currency pricing, and much more.
It is a relatively new stock on the TSX, having debuted in 2020 at the peak of the TSX tech bubble. From when it began trading on the TSX till September 2020, Nuvei stock share prices grew by over 270%. When the tech bubble popped, it saw a significant decline.
As of this writing, it trades for $33.01 per share, down by 78.80% from its all-time high. A recovery in the global economy can spark another rally of multi-bagger returns for Nuvei shareholders.
goeasy
goeasy (TSX: GSY) is a Mississauga-based $2.65 billion market capitalization alternative financial services company. The company provides financial services to subprime lenders, helping them secure loans they cannot qualify for from traditional lenders for various purposes, from furniture and electronics to unsecured home loans.
In the last 20 years of trading on the TSX, goeasy stock has delivered over 2,600% in returns through capital gains. This comes after an over 20% decline from its 2021 all-time highs.
In its September 30, 2023 ending quarterly earnings report, the company saw a 13% year-over-year uptick in loan originations and saw its loan portfolio grow to $3.4 billion. Improving macroeconomic conditions can drive further growth in its share prices in 2024 and beyond. As of this writing, it trades for $159.45 per share.
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Foolish takeaway
The improvement in the macro environment is driving equity markets higher this year. As investor sentiment improves, investing in growth stocks sooner rather than later might be better to capture significant wealth growth through capital gains. While not without its risks, adding Nuvei stock and goeasy stock to your holdings can be an excellent move for this purpose.
