Buying and holding TSX stocks with secular tailwinds and high growth potential can significantly enhance your portfolio’s return. Canadian stocks behind fundamentally strong companies are most likely to generate above-average growth and beat the benchmark index by a notable margin. Against this backdrop, here are my top four TSX stocks to buy right now.
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Top TSX stock #1
Shopify (TSX: SHOP) is a top TSX stock to capitalize on the e-commerce and omnichannel shift. The technology giant consistently generates strong financials, reflecting solid growth in its gross merchandise volume (GMV) growth. Its ability to grow its GMV in all market conditions supports its revenues and drives operating income.
Shopify’s integrated platform and innovative products resonate strongly with merchants. Notably, its payment solutions have witnessed solid adoption, with a growing portion of its GMV processed through its payment products. Moreover, strategic expansions in sales channels and partnerships with key social media and payment platforms further enhance its market position, attracting a broader merchant base.
Looking forward, Shopify’s diversified solutions, expanding market presence, and artificial intelligence (AI)-driven efficiencies position it well to deliver solid growth. Moreover, its focus on delivering profitable growth and lowering costs will support its share price.
Top TSX stock #2
Celestica (TSX: CLS) is one of the top TSX stocks to buy and hold. The company, which provides electronic manufacturing services and supply chain solutions, is seeing significant tailwinds from increased investments in AI infrastructure. The spending on AI infrastructure, including servers, storage, and networking, will likely sustain, providing a solid foundation for growth.
Celestica’s Hardware Platform Solutions (HPS) business will continue to benefit from strong demand for its networking switches. Moreover, its investments in modular AI/ML (machine learning) systems and customizable AI silicon position it well to capitalize on AI demand. Additionally, steady growth in its aerospace and defence businesses and a rebound in industrial markets will likely support its financials and push its stock higher.
Top TSX stock #3
Hammond Power Solutions (TSX: HPS.A) is a compelling long-term bet to capitalize on the growing electrification trend and high power demand. The company manufactures dry-type transformers and power quality products. It is witnessing solid demand for its custom solutions.
Hammond Power is well-positioned to benefit from increased activity in high-growth sectors like data centres, infrastructure, and healthcare. Moreover, its focus on expanding production capacity further enhances its ability to meet rising demand.
The company’s steadily growing backlog highlights robust booking momentum, providing a solid foundation for sustained revenue growth. Further, its acquisition of Micron Industries will enable it to generate incremental growth in power quality and related products. This growth potential positions Hammond Power to deliver above-average returns over the long term.
Top TSX stock #4
TerraVest Industries (TSX: TVK) is a top TSX stock to generate solid long-term capital gains. This diversified industrial company manufactures home heating products, energy processing equipment, anhydrous ammonia, propane, and natural gas liquids transport vehicles and storage vessels. The company is witnessing solid demand and delivering strong financials, which has driven its share price higher.
Despite significant growth, TerraVest stock has substantial upside potential. The momentum in its sales, accretive acquisitions, focus on international markets, expansion of its product offerings, and manufacturing efficiency will likely boost its earnings and support its share price. Further, its solid balance sheet positions it well to capitalize on growth opportunities and generate strong free cash flows.
