Canada’s primary stock market rose almost 250 points on August 23, 2024, in reaction to the impending U.S. interest rate cut in September. Besides a new record close of 23,286.10, only communications services, among 11 primary sectors, are in negative territory.
Each performing sector has noteworthy picks, although three TSX growth stocks stand out. If you have the appetite to invest, buy Celestica (TSX: CLS), Capstone Copper (TSX: CS), or Adentra (TSX: ADEN) without hesitation.
Winning AI stock
Celestica is the cheaper alternative to artificial intelligence (AI) king NVIDIA. This Canadian tech stock is equally potent as its American counterpart. At $71.83 per share, the year-to-date gain is 85.08%, while the trailing one-year price return is 146.75%. NVDA trades at US$129.37 per share.
The $8.52 billion multinational company designs and manufactures hardware platforms and provides supply chain electronics manufacturing services (EMS). Celestica benefits from favourable demand dynamics, especially in the AI space. It caters to customers in various sectors, including Aerospace & Defense, Communications, and Health Tech.
In the first half of 2024, revenue increased 21.8% year over year to US$3.78 billion, while net earnings ballooned 151% to US$201.3 million from a year ago. Rob Mionis, president and chief executive officer (CEO) of Celestica, said management raised its financial guidance and expects to end 2024 with a 19% (US$9.45 billion) and 49% (US$3.62) revenue and earnings-per-share growth, respectively.
Long-life copper operations
The materials sector (+24.25%), including metals and mining, is the top performer thus far in 2024, but Capstone Copper beats its sector by a mile. At $9.72 per share, current investors enjoy a 50.7% year-to-date gain. The $7.32 billion copper company explores for copper, silver, zinc, and other metals in the U.S., Chile, and Mexico.
Capstone’s strong operational and financial results in the second quarter (Q2) and the first half of 2024 show in the stock’s performance. In the three months ending June 30, 2024, net income reached US$27.5 million compared to the US$33.9 million net loss in Q2 2023. For the first six months this year, net income was US$21.7 million versus US$62.9 million net loss a year ago.
Management expects to create a world-class district in Atacama, Chile, following the release of the updated feasibility for the Santo Domingo copper-iron-gold project. After construction and integration, the goal is to make Capstone a long-life and low-cost critical metals producer to help global decarbonization efforts.
Flying high
Adentra has risen from obscurity and is flying high in 2024. The industrial stock is up 31.09% year to date ($41.43 per share), but the gain should be slightly higher to include the 1.35% dividend. Market analysts’ 12-month average price target is $53.71, a 29.6% upside potential.
This $1.04 billion company from Langley distributes architectural products for the building envelope, as well as interior working, living, and playing environments. In Q2 2024, net income climbed 81.6% to US$17 million versus Q2 2023. Also, operating cash flow increased 51.8% year over year to US$37.5 million during the quarter.
According to its president and CEO, Rob Brown, the North American industry is back to a more balanced supply and demand environment while product pricing has been gradually adjusting and normalizing. He added that the second-quarter results indicate a resilient business model.
Growth investing
Celestica, Capstone Copper, and Adentra are ripe for growth investing. The harvest should be bountiful in 2024 and beyond.
