Canada's Top Performers: 2 Soaring Stocks That Are Still Buys

Canada’s Top Performers: 2 Soaring Stocks That Are Still Buys

Sure, buying light isn’t ideal. But when the stock continues to climb, it’s far worse to leave it by the wayside.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published September 5, 2024 4:10 pm EDT

Soaring stocks on the TSX can still be a great buy. Even at high prices! That’s because these often reflect companies with strong growth momentum, solid fundamentals, and positive market sentiment. When a stock is on the rise, it’s usually because the company is performing well, whether through increased earnings, strong future prospects, or successful expansion strategies.

While it might seem counterintuitive to buy when prices are high, investing in a stock that’s gaining traction can be rewarding as it may continue to climb if the underlying factors driving the growth remain strong. Plus, in a robust market, these stocks often attract further investor interest, potentially pushing prices even higher. So let’s look at some that may do just that.

todder holds a gold bar — Source: Getty Images

CES Energy Solutions

CES Energy Solutions (TSX: CEU) looks like a fantastic buy for a few compelling reasons. Especially considering its recent strong performance. The company reported record second-quarter revenue of $553.2 million, which is a 7% increase year-over-year. This growth is a clear indicator of CES’s ability to thrive even in a challenging market, driven by its unique business model that focuses on providing critical chemical solutions to the energy sector.

This performance is further highlighted by a 29% increase in Adjusted earnings before interest, taxes, depreciation and amortization (EBTIDA), reaching $95.4 million with a solid 17.3% margin. These numbers show that CES is not just surviving but excelling. This makes it a strong contender in the energy solutions market.

What’s more, CES’s financial health is impressive, showing a strong focus on reducing debt and improving financial flexibility. The company also declared a quarterly dividend of $0.03 per share, reflecting a forward annual dividend yield of 1.5% This, while modest, is supported by a low payout ratio of just 14.1%. The combination of strong earnings growth, disciplined financial management, and shareholder returns makes CES stock an attractive option for investors looking for a well-rounded, growth-oriented investment in the energy sector.

Finally, CES’s stock performance has been remarkable, with a 52-week change of 113.3% – far outpacing the S&P 500’s 25.6% change over the same period. This momentum, combined with a reasonable forward Price/Earnings (P/E) ratio of 9.6, suggests that the stock is still attractively priced despite its significant gains. With a robust balance sheet, strong cash flow generation, and a business model that continues to deliver results, CES Energy Solutions appears to be a great buy for investors seeking both growth and stability in the energy sector.

Torex Gold

Torex Gold (TSX:TXG) is shaping up to be a compelling buy for investors, thanks to its strong financial performance and promising future prospects. The company reported robust 27.9% year-over-year growth in quarterly revenue, reaching $949.3 million. This solid revenue stream is backed by their cost discipline and a remarkable all-in sustaining cost margin of 44%, driven by high gold prices. With gold production at 229,316 ounces in the first half of the year, Torex is on track to meet its production guidance for the sixth consecutive year. This reflects the company’s operational consistency and reliability.

Furthermore, Torex’s financial health is also noteworthy, with a healthy balance sheet featuring $108.7 million in cash and a low debt-to-equity ratio of 7.3%. The company’s forward P/E ratio of 9.7 suggests that it’s currently undervalued relative to its earnings potential. This makes it an attractive opportunity for investors looking for growth at a reasonable price. Plus, Torex’s ongoing Media Luna project provides a clear pathway to future growth and diversification beyond gold. It is expected to deliver its first copper concentrate by year-end and achieve commercial production in Q1 2025.

Finally, Torex’s stock performance has been impressive, with a 52-week change of 77.5%, significantly outpacing the broader market. The stock’s current price of $26 is close to its 52-week high of $26.85, reflecting strong investor confidence. With a book value per share of $17.92 and a price-to-book ratio of just 1.1, Torex Gold offers a solid investment with both value and growth potential. And that makes it a great buy for those looking to capitalize on the thriving gold market and Torex’s strategic projects