Growth stocks can feel like a conundrum when they’re hitting new highs. Are these worth it, or is it all downhill from here? The answer often lies in understanding why they’re thriving and the unique opportunities they offer for long-term investors. Let’s dive into why growth stocks, particularly Shopify (TSX:SHOP), Cameco (TSX:CCO), and TFI International (TSX:TFII), remain stellar “forever holds.”
The stocks
First, growth stocks represent companies that are leaders in innovation, efficiency, or demand for their products, together with high valuations that often reflect potential rather than just their current earnings. Shopify is a great example. Despite its high price-to-earnings ratio (P/E) of 104.9 hi, the growth stock has consistently posted double-digit revenue growth, with the most recent quarter showing a 26.1% year-over-year increase. Shopify’s dominance in e-commerce platforms and its expanding suite of services position it for long-term success, making it a worthy buy even at highs.
Cameco, a leader in uranium mining, benefits from a renewed global interest in nuclear energy. While its earnings might seem volatile, its revenue grew by an impressive 25.3% in the most recent quarter. The world’s shift towards clean energy solutions is a long-term growth driver for uranium, giving Cameco a secure footing for the future. Its historical resilience and market leadership make the growth stock a solid long-term hold.
Meanwhile, TFI International, a North American logistics giant, continues to deliver solid performance even in challenging economic conditions. Although quarterly earnings dipped by 4% year-over-year, TFI has been making strategic acquisitions and optimizing its operations, maintaining strong profit margins. Its forward P/E of 18.9 reflects optimism for continued growth, and with a solid dividend yield of 1.2%, the growth stock offers a bit of income on the side.
Still long-term holds
Why should you consider holding these stocks forever? Companies like Shopify, Cameco, and TFI are not just reactive to market trends. The growth stocks are shaping the industries they operate in. Shopify’s constant innovation in e-commerce, Cameco’s pivotal role in global energy security, and TFI’s operational prowess in logistics ensure they remain indispensable in each respective field. The ability to adapt to challenges while pursuing new opportunities underscores the longevity.
Investing in growth stocks at peaks might feel risky, but history has shown that buying quality at any price often pays off. Shopify’s stock, for instance, has skyrocketed from its 2023 lows of $72.36 to over $158 today, rewarding patient investors who believed in its vision. The same can be said for Cameco, which has climbed steadily amid the nuclear renaissance, and TFI, which has grown both organically and through savvy acquisitions.
Looking ahead, these companies are well-poised for further gains. Shopify’s forward P/E of 77.5 may seem steep, but its low debt-to-equity ratio of 11.3% and strong cash reserves of $4.9 billion provide ample room to fund growth. Cameco’s focus on long-term uranium contracts and a cleaner energy future bodes well for its revenue stability. TFI’s ability to generate significant free cash flow ensures it can weather economic downturns while pursuing expansion.
Bottom line
In short, growth stocks at highs aren’t just about chasing the trend. These are about buying into a future of innovation and market leadership. Shopify, Cameco, and TFI International exemplify this potential, blending strong fundamentals, visionary leadership, and market dominance to ensure they remain investor favourites for years to come. Hold them with confidence, and you just might thank yourself in the decades ahead.
