As market volatility rocks Bay Street in the second quarter, investors should be ready to buy something on weakness. Indeed, there are many distressed stocks out there with considerable negative momentum. Still, I’d much rather look to the robust growth plays to buy on subtle dips off their all-time highs. Undoubtedly, as the market sells off a bit, even the top performers stand to take a bit of a hit, even if it’s not at all justified.
In this piece, we’ll check in with two TSX growth stocks whose growth profile could help power many years of growth. Undoubtedly, as we move toward the midpoint of the second quarter, markets may wobble further, and valuations of many of the top growers stand to contract further. I’d look to pick up shares of such companies on weakness.
Without further ado, Badger Infrastructure Solutions (TSX: BDGI) and Cameco (TSX: CCO) are intriguing growth plays I’d watch very closely as recent dips open up a potential entry point for investors who missed the past-year rallies. The recent pullback in each stock has more to do with broader market weakness than anything specific to the companies.
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Badger Infrastructure Solutions
Badger Infrastructure Solutions (formerly Badger Daylighting, a name that I preferred personally) stock has been starting to give back some of the incredible gains it had enjoyed since the start of 2023. Shares are officially down just north of 12% from the recent peak.
At $44 and change per share, the provider of non-destructive soil excavation solutions goes for 27.2 times trailing price to earnings, which isn’t too bad when considering the massive growth runway to be had. Indeed, Badger serves various industries, from energy firms to utilities. And with a mere $1.5 billion market cap, I’d argue that cyclical demand can pave the way for even more significant gains, all while management continues to improve upon operating margins.
All considered, BDGI stock is a top mid-cap to keep on your radar. The 1.6% dividend yield is just a bonus.
Cameco
Cameco is perhaps the more exciting stock to own for the long haul. The impressive uranium miner isn’t just a great Canadian firm; it’s one of the world’s leading uranium producers. Indeed, the miner recently clocked in some fairly mixed results, with a $7 million loss in the first quarter alongside revenues ($634 million) that were down more than $50 million year over year.
Sure, quarter-to-quarter volatility is to be expected from any commodity miner. And while shares have shed a bit of ground off their highs, I view the dip as more of a buying opportunity for investors who are bullish on the future of nuclear power. Indeed, there are plenty of nuclear plants coming online over the next decade. With that, there will be a need for more uranium, and few firms, I believe, are better equipped to meet said demand than Cameco.
With shares down 6.5%, I’d not be afraid to initiate a fairly small partial position right here. However, I acknowledge that the easiest gains may have already been made.
