The Canadian stock market has been jittery lately. There are a lot of risks that could unhinge the market. Stock valuations remain elevated. It may not take much to create a selloff.
The good news is that a substantial correction could create opportunities to add high-quality growth stocks to your portfolio. Now is the time to do your research and make your list of what to add on the declines. If you are looking for the ultimate growth stocks to add on a correction, here are three to buy with $5,000.
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A small-cap growth stock
VitalHub (TSX:VHI) has a market cap of $605 million. The company had an exceptional run in 2024. Its stock rose over 170%!
It provides specialized software solutions for the healthcare industry. These solutions help better manage healthcare settings and improve patient outcomes. Healthcare software is very outdated, so it is a sector primed for disruption. That should provide attractive organic growth for VitalHub over the long term.
After a recent equity financing, it is sitting flush with cash and no debt. It should be able to make further acquisitions that could expand it by product and geography.
This is not the cheapest stock today. However, it has a long growth runway ahead. If it sees a pullback in 2025, it would be a great time to add.
A mid-cap growth stock
MDA Space (TSX:MDA) is a little larger, with a $2.9 billion market cap. MDA designs and manufactures specialized space technologies. It focuses on satellites, space robotics, and geo-intelligence.
Over the past five years, revenues and adjusted net income have risen by 25% and 52% compound annual growth rates, respectively. For fiscal 2024, it expects to grow revenues by 30%.
MDA has a massive backlog worth $4.6 billion. That should provide over four years of revenues, even if it never adds a new project (which, of course, it will).
The space market is expected to grow rapidly in the coming years. This should support a strong tailwind of growth in the coming years ahead.
A large-cap growth company
Constellation Software (TSX:CSU) is a top large-cap stock to pick up if the market corrects. Yesterday, its stock price eclipsed the $5,000 mark for a short period. That put its market cap close to $105 billion.
Despite being a large company, this company is still one of the best growth companies in Canada. Its stock has compounded by over 34% per annum over the past ~19 years.
While those returns will be hard to replicate, the company still has ample room to grow. It has about 1,000 decentralized vertical market software (VMS) businesses operating under its banner. There are more than 50,000 VMS businesses around the globe. This means it still has plenty of room to consolidate the market.
Constellation has spun off a couple of companies in recent years. Further spinouts are likely to happen in the future. It is likely to continue to be creative about unmasking shareholder returns. The company is economically resilient and diversified. It is a strong bet for safety and growth in 2025 and beyond.
