The road has been bumpy this year for the Canadian stock market. As the first half ends, the TSX’s year-to-date gain is 4% or only 49% of last year’s 8.1% overall return. However, some growth stocks continue to beat the broader market and show no signs of slowing down.
AtkinsRéalis Group (TSX:ATRL), Hammond Power Solutions (TSX:HPS.A), and 5N Plus (TSX:VNP) are winning investments thus far in 2024. Despite the elevated market volatility, these high-flying stocks have delivered handsome returns the past year. All three are strong buys now that the interest rate-cutting cycle by the Bank of Canada has begun.
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Powerful organic growth engine
AtkinsRéalis benefits from increased infrastructure spending and has been securing multiple contracts non-stop. The $10.3 billion integrated professional services and project management company focuses more on engineering and nuclear projects than legacy contracts. At $58.55 per share, the one-year price return is 80.8%.
Management said the rebranding of SNC-Lavalin to AtkinsRéalis in 2023 is a transformational change and marked the beginning of a new era. Also, the growth strategy is deliberate, disciplined, and focuses on clearly defined end markets. AtkinsRéalis has a strong presence in Canada, the US, the UK and Ireland and operates in Australia, the Middle East, and the Asia-Pacific region.
According to its President and CEO, Ian L. Edwards, AtkinsRéalis has constructed a powerful, organic growth engine, which should deliver significant positive net cash from operations and drive long-term shareholder value. In Q1 2024, total revenues increased 11.9% year-over-year to $2.3 billion, while net income jumped 60.2% to $45.5 million compared to Q1 2023.
Industry leader
At $108 per share, Hammond Power is up 32.7% year-to-date, while the trailing one-year price return is 122.1%. Current investors also partake in the modest 1.04% dividend. The $1.3 billion company manufactures and sells dry-type transformers for the utility needs of various sectors, including industrial, infrastructure, and renewable energy.
In Q1 2024, sales increased 11.4% year-over-year to a record $190.7 million. However, net earnings fell 49.4% to $8 million due to higher selling, distribution, and general and administrative expenses. Notably, cash generated by operations reached $6.3 million compared to -$10.5 million in Q1 2023.
Its CEO, Adrian Thomas, notes strong project demand, particularly from emerging market segments. He expects sales volumes to grow further in the ensuing quarters.
High-growth markets
5N Plus is an excellent option for price-conscious investors. At $6.17 per share (+62.2% year-to-date), the basic materials stock is up 102.3% from a year ago. This $547.8 million company produces specialty semiconductors and performance materials and is a leading supplier to critical industries.
The business thrives amid a challenging environment. In the three months ending March 31, 2024, revenue and net earnings climbed 17.6% and 72.4% to US$65 million and US$2.5 million, respectively, compared to Q1 2023. Besides the record US$135 million in multi-year contracts for AZUR SPACE Solar Power GmbH in a single quarter, 5N Plus expects to sign more contracts in the near term.
Potential multi-baggers
AtkinsRéalis, Hammond Power Solutions, and 5N Plus are potential multi-baggers in 2024. Depending on your investment budget, all three are buying opportunities.
