After rising over 6.2% last month, the S&P/TSX Composite Index is up 0.2% this month. Year to date, the benchmark index is up 22.6%. Easing inflation, falling interest rates, and optimism about Donald Trump’s pro-growth policies have boosted equity markets. Amid improving optimism, you can buy the following three high-growth stocks to earn superior returns over the next three years.
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Celestica
Celestica (TSX: CLS), an electronics manufacturing services provider, has delivered impressive returns of over 790% in the last two years. Solid quarterly performance, new product launches, and favourable market conditions have increased the company’s stock price. Meanwhile, the demand for high-performance computing solutions and storage controllers is rising as hyperscalers continue investing in building artificial intelligence (AI)-ready data centres to meet growth in AI, machine learning (ML), and cloud computing.
Amid rising demand, Celestica continues to innovate and launch new products to expand its footprint. It also focuses on strategic acquisitions and partnerships to drive growth. Recently, it partnered with Groq, helping it manufacture AI/ML servers and full-stack solutions. The company has solid exposure to the aerospace and defence sectors. It could benefit from the rising defence budgets due to geo-political tensions and a rebound in commercial air travel. Considering all these factors, I believe the rally in Celestica’s stock price will continue.
Shopify
Another growth stock that offers excellent buying opportunities is Shopify (TSX: SHOP), which supports businesses by providing essential internet infrastructure for commerce. The company posted an excellent third-quarter performance last month, with its top line growing by 26.1% to $2.16 billion. Its operating income rose 132% to $283 million, while its operating income margin improved from 7.1% to 13.1%. Also, it generated free cash flows of $421 million, representing 19.5% of its revenue — a 330-basis-point improvement from the previous year.
Meanwhile, Shopify continues to expand its product offerings by launching new and innovative products to strengthen its position in the e-commerce sector. Its payment products continue to witness traction, with the penetration of Shopify Payments growing to 62%. Shop Pay facilitated $17 billion in gross merchandise value, representing a 42% year-over-year increase. The company’s B2B (business-to-business) segment is also witnessing solid growth. Considering all these factors, I believe the uptrend in Shofity’s financials and stock price will continue.
WELL Health Technologies
My final pick is WELL Health Technologies (TSX: WELL), which develops technologies and services to aid healthcare professionals in delivering positive outcomes. Given its convenience, accessibility, cost-effectiveness, and innovative product development, more people are opting for virtual healthcare services, thus expanding the addressable market for WEL Health. The digitization of patient records and increased usage of software solutions in healthcare services have created a long-term growth potential for the company.
Meanwhile, WELL Health continues to develop innovative products and AI-powered tools to enhance its customers’ user experience and expand its customer base. It also continues with its strategic acquisitions and has 17 letters of intent and definitive agreements. Along with these growth initiatives, the company has adopted certain cost-cutting initiatives, which could improve its profitability in the coming quarters. Also, WELL Health trades at an attractive valuation, with its next-12-month price-to-sales multiple at 1.5.
