Often, we keep stock investments on hold, thinking we will buy at the right time. And when the time is right, the money we set aside for investments is spent. Are you stuck in this circle? While it is true that you can’t time the market, it is also true that buying the dip and selling the rally of fundamentally strong stocks gives the best results. Instead of waiting for the stock in your watchlist to come to the right price, you could identify value stocks when you have the money to invest.
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Two TSX stocks to buy right now with $1,000
Invest only the money you don’t need immediately, as stocks are volatile in the short term. They might reduce your invested amount instead of growing it initially. But with time, they can grow your investment severalfold.
I have identified two growth stocks trading closer to their 52-week low. They are currently oversold amid economic uncertainty. However, they have the financial flexibility to thrive and a secular demand that could trigger high growth.
BlackBerry stock
BlackBerry (TSX: BB) stock has slipped below the $4 price, losing more than 40% of its market value in the last 12 months. Investors have been selling the stocks while its major shareholder, Prem Watsa, continued adding more BlackBerry shares to its portfolio through Fairfax Holdings. The short term is difficult for the cybersecurity management company as the uncertain business environment has kept governments and companies cautious with their IT spending. Hence, BlackBerry expects its cybersecurity revenue to fall in 2024 as well.
However, the company has a bright side of growth in the form of QNX software and IVY vehicle communications that fall under its Internet of Things (IoT) segment. BlackBerry expects revenue growth in IoT as it realizes the royalty backlog from the last two years from the pent-up design wins. Its QNX royalty backlog stands at US$815 million in fiscal 2024.
Moreover, BlackBerry operates in two high-growth segments: the IoT, with a total addressable market (TAM) of US$32 billion in 2025, and endpoint cybersecurity, with a US$52 billion TAM in 2026. This secular growth shows the long-term outlook is bright. The company is undergoing restructuring to tap this growth efficiently and with positive cash flow.
You could consider buying this stock as it trades closer to its 20-year low because of the short-term headwinds. If the growth catalysts trigger, the stock could even cross $40 in the long term. A $500 investment could become $5,000. Even if BlackBerry doesn’t thrive, its rich intellectual property (IP) could fetch a premium from any acquirer interested in buying the company or its IP. In either case, you could get more than your invested amount.
Hive Digital Technologies
Hive Digital Technologies (TSX: HIVE) is another stock worth buying right now. This blockchain technology company has turned into a digital solutions company. It has a dual growth opportunity of Bitcoin and artificial intelligence (AI). Since April 26, the stock has slipped 22% below its low-end range of around $4. The stock price is influenced by Bitcoin price momentum, which depends on economic growth and investor confidence.
While the stock market surged in May on hopes of a June interest rate cut, Hive stock continued to fall. The market has not yet priced in the optimism. If the Bank of Canada does announce a rate cut in June, Hive stock could jump significantly and even grow your money by more than 50% in a few months.
While the Bitcoin angle brings capital appreciation and volatility, the AI component could bring stability to the cash flow. Hive realized that it needed to diversify its revenue streams. It is renting out its graphic processing data centres for AI and high-performance computing. This could bring stable revenue over time and reduce the stock’s downside.
Hence, buying the stock at the dip will reduce your downside and increase your upside.
Investor takeaway
The above stocks are highly volatile and can give market-beating returns in a recovery rally. However, they are best purchased at the dip, which is right now. Once they rally, the risk will increase.
