Don’t sleep on the high-growth TSX stocks, as the Canadian stock market looks to pull back a bit going into mid-January. Undoubtedly, with the S&P 500 nearly halfway to a correction following Friday’s job number, questions linger as to whether 2025 will be a breather year after two consecutive years’ worth of impressive double-digit returns for the American market.
Though it’s difficult to tell, I still think young investors should look into buying growth stocks on weakness. In this piece, we’ll have a closer look at two high-growth names that are trading at relatively reasonable multiples. As always, if we are looking at a correction to start the year, be ready to buy on the way down incrementally. Indeed, it’s hard to catch a bottom in the market or in any individual name.
That’s why buying partial positions only makes sense. With 2025 starting things off in a volatile fashion, dollar-cost averaging (DCA), I believe, stands out as something that new investors should look to in order to deal with any potential wild swings thrown their way.
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Shopify
First, we have e-commerce titan Shopify (TSX: SHOP), whose shares recently retreated below the $150 per-share level. Now down around 13% from 52-week highs, those who may have missed the autumn post-earnings melt-up may have another shot to get in at a fairly reasonable price of admission while the stock is trading at just north of 74 times forward price to earnings (P/E).
Of course, that’s not a huge bargain by any stretch, but for one of Canada’s growthiest and fast-rising large-cap tech stocks, I’d argue that the stock is very fairly priced given the potential tailwinds that could catapult it over the next five years. Indeed, near-term pain tolerance may be needed to jump into this one, so do be ready to average down should the stock be on a round-trip right back to the $113 level, a level where there seems to be a good level of support.
The $193.5 billion tech innovator has come a long way. And with a recent upgrade from an analyst over at Wedbush Securities over the “dominant” position its platform has, I couldn’t be more bullish on the latest slump.
Descartes Group
Descartes Group (TSX: DSG) is one of the more underrated tech stocks on the TSX Index, but a name that longer-term growth investors should place on their radars this year. The stock, which trades at 50.5 times forward P/E, isn’t exactly a cheap name, but compared to the magnitude of growth on the horizon, I think such a premium is worth paying up for. With a $13.8 billion market cap, Descartes is one of the lesser-known tech players in Canada.
Still, the supply chain and logistics solutions provider has a lengthy runway for growth and perhaps the ability to continue outpacing the TSX Index while exhibiting far less volatility (0.74 beta, which entails lower market risk). Despite falling 7% off recent highs, the stock is still up 46% over the past year. As such, the momentum is still intact, making DSG an opportunistic buy on the dip.
