It is a new month, and it is an opportune time to invest some fresh cash in the market. Stocks are starting to pullback from recent highs, and it could be a great chance to pick up some long-term winners.
Sometimes the best investment opportunities are when stocks in great businesses hit a short-term roadblock and you can buy them at better valuations. If you had $5,000 to deploy today, here are five stocks I’d plow it into.
A transport compounder
TFI International (TSX: TFII) stock has already created lasting wealth for long-term shareholders. This stock is up 315% in the past five years. However, it is down around 10% in the past month. The global freight environment has been very challenged and that has impacted early 2024 results.
Yet, TFI has a lot of levers to pull. It has a solid balance sheet so it can make bargain-priced acquisitions. It has a lot of room to improve and streamline current operations.
Likewise, a cheaper stock likely means it will start buying stock back again (especially given its strong excess cash generation). TFI is one company that could emerge triumphant out of a recession, so that is why it is a top pick.
A software stock operating in Europe
Topicus.com (TSXV: TOI) is another stock that could do well for decades ahead. It operates and acquires niche software businesses across Europe. The European economy has weakened in the past few years, so Topicus is likely to get some bargain buying opportunities.
Topicus’ portfolio of software is diversified across country, niche, and industry. As a result, its income is economically resilient.
It just announced strong first quarter results revenues grew by the mid-teens and cash flows increased 30%-plus. It continues to deploy its spare cash effectively. If it can continue to generate strong returns on its investment strategy, shareholders will be very happy in years to come.
A fintech growth stock
Propel Holdings (TSX: PRL) is not well-known in the Canadian market. But that presents attractive prospects for early investors. Propel has a unique lending platform that caters to the non-prime consumer market in the United States and Canada.
Propel offers loans directly to consumers, but it also offers lending-as-a-service to other financial providers. The company has been growing earnings per share by an annual compounded rate of 30%-plus. This stock is riskier, but it also has a substantial chance to soar.
An engineering firm with global growth
Another long-term stock is WSP Global (TSX: WSP). This stock is up 200% in the past five years. WSP has grown to become one of the largest consulting, engineering, and project management firms around the world.
The company has done a solid job adding expertise and geographic reach to its portfolio. This has translated into expanded margins and solid 20% earnings per share growth in the past few years.
With a significant backlog, WSP has more work than it can handle right now and that bodes well for shareholders.
A real estate services stock with long-term returns
A final stock to buy for lasting wealth is FirstService Corp. (TSX: FSV). This stock is up 515% over the past 10 years. That is impressive returns for a company that provides residential property management and home renovation/restoration services.
FirstService property management business generates stable income and strong cash flows. That has helped fuel its property service acquisition strategy.
It just added a major roofing platform to its portfolio. Ithe acquisition demonstrates that FirstService is still in the very early stages of its capital deployment strategy. Shareholders should be due to benefit if they are patient with this quality stock.
