Stocks across the TSX came roaring back last year after a disappointing performance in 2022. Growth stocks, many of which are from the tech sector, drove the market’s strong rebound in 2023. But even after such a strong push last year, many of those high-flying tech stocks continue to trade below all-time highs.
While the tech sector may make a lot of the headlines in the media, it’s not the only place for growth investors to be on the hunt for their next purchase.
I’ve reviewed two discounted stocks that growth investors will want to have on their watch lists right now. Both companies have proven that they’ve been able to outperform the market but have found themselves struggling as of late.
If you’re looking to add some growth potential to your portfolio this year, these two Canadian stocks should be on your radar.
Growth stock #1: Air Canada
Canada’s largest airline has struggled to return anywhere near its pre-pandemic highs. The stock is currently down more than 60% since the beginning of 2020, putting Air Canada (TSX: AC) at a staggering loss of 45% over the past five years.
There’s no question that Air Canada has largely trailed the returns of the S&P/TSX Composite Index in recent years. However, the airline industry is certainly no stranger to cyclicality. In addition, Air Canada is one of the few North American airline stocks that has had success outperforming the market over the past decade.
I’d be prepared for a slow grind back to all-time highs. But if you’ve got time on your side, it could be a long time before we see Air Canada trading at a discount like this again.
Growth stock #2: WELL Health Technologies
The pandemic also had a major impact on WELL Health Technologies (TSX: WELL). The difference from Air Canada is that WELL Health saw demand for its telehealth services surge, which led to market-crushing gains in a very short period of time.
WELL Health managed to end 2020 up a whopping 400%. Shares have understandably cooled off since then and are now trading 50% below all-time highs from 2021. Still, the growth stock is up more than 600% over the past five years.
A huge amount of growth was pulled for companies in the virtual healthcare space during the pandemic, which explains the pullback over the past couple of years. But short-term tailwinds aside, the long-term market opportunity for virtual healthcare providers is a massive one.
Similar to Air Canada, if you can afford to be patient, this is a growth stock that remains loaded with multi-bagger growth potential.
Foolish bottom line
Investing in a stock that’s down more than 50% from all-time highs is not always easy to do. There’s usually a reason why shares are down that much. But in the case of Air Canada and WELL Health, I’d argue that it’s not surprising to see where both stocks are currently trading.
As long as you’re willing to be patient, now could be an incredibly opportunistic time to load up on these two discounted growth stocks.
