Who says you need to invest in the hottest of high-tech growth stocks to have a shot at impressive gains? Indeed, it’s hard to avoid all of the hype surrounding various technology titans, especially as the tech-heavy Nasdaq 100 exchange adds to its strength. Indeed, the U.S. market (both the S&P 500 and Nasdaq 100) is at new highs, thanks in major part to the tech scene and the rise of the artificial intelligence trend.
Understandably, many value investors and contrarians may be holding off on the tech scene, with some pointing to mild overvaluation as a concern. Though markets may be overdue for some sort of correction over the coming weeks, I’d argue that markets may proceed forward without tumbling by 10% from peak to trough, given the potential for AI technologies to be additive to sales and earnings.
Of course, it’s hard to tell just how much of a shot in the arm AI can give our favourite firms. Regardless, you don’t need to chase them here if you’re not comfortable paying valuation multiples at the high end of the range. You can wait for them to come in or scoop up one of the low-tech darlings, which clearly don’t need the latest and greatest technologies to deliver respectable gains for investors over time.
Jamieson Wellness
Jamieson Wellness (TSX: JWEL) is a magnificent company that’s capable of delivering high growth for low-tech investors. The stock blasted off more than 40% from its lows in October 2023, and though the pace of gains has tapered, I believe the vitamin maker’s next move is higher.
Why? The stock’s still cheap at 29.4 times trailing price to earnings, given its impressive growth profile. The Asian region could be key to levelling up its growth prospects. And though the stock has been in a multi-year slump since peaking way back in late 2020, I’d argue that decent recent quarters suggest a turning of the tides.
As a $1.3 billion mid-cap firm with a brand that resonates with many consumers, I’d argue Jamieson is a value and growth play for those looking to build wealth over the long run.
Aritzia
Aritzia (TSX: ATZ) is a women’s clothing company that’s also in the midst of a massive comeback. Following an impressive quarterly report, the stock is now trading just shy of $35 per share after spending half a year fluctuating in the mid-$20 levels. Of course, the consumer still has a weight on its shoulders. However, the recent quarter suggests the Aritzia brand is more powerful than many gave it credit for.
Fashionable wears, like those produced by the Vancouver-based apparel firm, are discretionary goods that fare better when economic times are good, but don’t sleep on the firm as we move into the latter innings of this inflation-fuelled consumer slowdown. I think 2024 could see the consumer strengthen in a big way as inflation dies down and confidence picks up by enough to justify picking up those nice-to-have goods.
Given the resilience in the other discretionary consumer segments (think athleisure and trendy drinkware like the Stanley cup), I believe there are already signs that the consumer is coming back.
