Smart growth picks vary from market to market. Some markets have a higher concentration of such picks, while others have a relatively limited number of options. However, choosing the right growth stock requires more than just understanding market dynamics and stock fundamentals.
It also requires a healthy risk tolerance. You must be willing to take on a healthy amount of risk to leverage some of the most promising opportunities.
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A real estate company
FirstService (TSX: FSV) can be considered a tried-and-tested growth stock. It has been around for less than a decade and has already risen well over 660%.
It has been through one major correction phase, which pushed it down nearly 40%, but the stock recovered relatively swiftly and is growing again at its characteristic pace. It has risen over 24% this year alone.
However, its business model is an even more compelling reason to consider this stock. It’s the largest property manager in North America, managing millions of housing units (mostly in the U.S.). And that’s just half of its business. The rest is essentially property services, and the company has leadership status there as well.
This powerful combination of leadership status in the industry and rapid growth pace make it one of the best growth stocks you can buy right now and hold long term.
It also pays dividends and has been growing them long enough to be considered an Aristocrat, but the yield is too low for that to be a deciding factor. It can also be a great way to diversify your portfolio from real estate investment trusts (REITs) that are aplenty in TSX and cherished for their dividends.
A security and surveillance company
If you are looking for a solid bullish pick that is rapidly growing and aren’t against buying an overvalued stock then Zedcor (TSXV: ZDC) should be on your radar.
It’s a Calgary-based company that offers business surveillance solutions to multiple industries. The company offers live monitoring, mobile surveillance, and are ideal for projects and temporary set ups.
The business model itself may be just part of the reason the stock shot up, but it has been going up at a robust rate — over 390% just in 2024. That might seem like an unsustainable growth pace.
It’s overvaluation certainly endorses that perspective, but if the stock manages to maintain even half of that growth pace for the next 12 months, you might see more growth in a year with this stock than you may see with a tried and tested stock in half or even an entire decade.
A crypto stock
Galaxy Digital Holdings (TSX: GLXY) is a potentially strong growth stock you can buy at a discounted price. The stock rose by about 56% in 2024, but the current trajectory is downward. Considering its choppy performance, it may simply be a small bearish phase, but waiting for the momentum to reverse might be a good idea before you buy.
This differs from most other crypto stocks trading on the TSX since it’s not purely a crypto mining business. It’s more of a financial services business with a strong crypto focus.
That doesn’t mean it’s not vulnerable to fluctuations in the crypto market, but its business model and its undervaluation are reasons enough to consider this stock right now.
Foolish takeaway
The three growth stocks can be great picks for your $6,000 capital, regardless of whether you are placing them in a Tax-Free Savings Account or Registered Retirement Savings Plan. However, not all stocks are worth holding long term.
Zedcor is particularly worth tracking, even after you buy it, because a timely exit from stocks that are bullish to this extent can be critical in generating a desirable level of returns.
