Investing over a longer term is an excellent strategy as it shields your investments from short-term fluctuations while benefiting from the power of compounding. However, investors need to be careful while choosing stocks. They should invest in stocks with solid financials and healthy growth prospects. Meanwhile, I am bullish on the following three growth stocks, which can deliver multi-fold returns in the long run.
Docebo
Doocebo (TSX: DCBO) offers a cloud-based learning platform to businesses worldwide. Last month, the company posted impressive second-quarter earnings, with its top line and adjusted EPS (earnings per share) growing by 22% and 85.7%, respectively. The expansion of its customer base by adding 307 customers over the last four quarters and an increase of 9.7% in its average contract value drove its financials.
Meanwhile, the global LMS (learning management system) market is growing amid increased adoption of digital learning tools, growing accessibility of internet services, and the development of innovative products. Moreover, Docebo has taken several initiatives, such as strategic partnerships and acquisitions, to develop and introduce artificial intelligence (AI)-power features on its platform to enhance its customer experience. Besides, around 81% of its customers have opted for long-term agreements, thus providing stability to its financials. Given its healthy growth prospects and solid underlying business, Docebo would be an excellent long-term buy, even in this volatile environment.
WELL Health Technologies
WELL Health Technologies (TSX: WELL) develops technology and services to empower healthcare professionals to deliver positive patient outcomes. The digitization of patient records, increased usage of software solutions in the healthcare industry, and growing adoption of telehealthcare services have created a multi-year growth potential for the company.
Meanwhile, WELL Health has partnered with Microsoft to expand the reach of digital healthcare services in North America. Besides, it recently acquired 10 clinics operated by Shoppers Drug Mart, thus continuing its expansion. The digital healthcare company is also investing strategically in AI to develop innovative products, which could strengthen its position in expanding virtual healthcare services. Moreover, its cost-cutting program continues to improve its operational efficiency and deliver substantial cost savings.
Despite its healthy growth prospects, WELL Health trades at a cheaper NTM (next-12-month) price-to-sales multiple of one. Considering all these factors, I believe WELL Health could deliver multi-fold returns in the long run.
Savaria
Savaria (TSX: SIS), which designs, manufactures, and markets accessibility equipment, has grown its financials at a healthier rate for the last 10 years. Its top line and adjusted EPS have increased at an annualized rate of 27% and 11%, respectively. The uptrend in the company financials has continued this year, with its revenue and adjusted EPS growing by 5.1% and 57.1% in the first six months. Supported by these solid financials, the company has returned 648% over the last 10 years at an annualized rate of 22.3%.
Meanwhile, I expect the uptrend in Savaria’s financials to continue amid rising demand for accessibility solutions due to the growing aging population and increasing income levels. The company is investing in product development and strengthening its production capabilities to drive growth. It has also adopted Savaria One, a multi-year initiative, which could increase its production capacity and throughput and improve procurement and supply chain efficiencies. Amid these growth initiatives, Savaria’s management expects its topline to reach $1 billion next year while expanding its adjusted earnings before interest, tax, depreciation, and amortization margin to 20%.
Further, Savaria pays a monthly dividend, with its forward yield at 2.59%. It trades at 1.5 times analysts projected sales for the next four quarters, making it an excellent long-term buy.
