Stock market investing isn’t all about finding the most exciting, trending, and high-growth stock and putting all your money in it. Jumping on the bandwagon to invest in trending stocks at the right time can be a terrific way to enjoy significant short-term gains. However, the key to sustained success as a stock market investor is parking your money in stocks that can deliver excellent returns on your investment for years down the line.
The tech industry is a rapidly growing sector in the Canadian economy as technological innovations become increasingly integral in every aspect of our lives. There are plenty of Canadian tech stocks to pick from, but not all are made the same. Due to the harsh overall economic environment, it is important to identify those with strong fundamentals and the ability to deliver solid returns in the long run.
Against this backdrop, here is a brilliant small-cap and a large-cap tech stock that you can consider investing in.
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VitalHub
VitalHub Corp. (TSX: VHI) is a $445.24 million market capitalization software firm that’s still in its early stages of growth. The Toronto-headquartered company develops technology solutions for health and human services providers in the mental health, long-term care, home health, social service, acute care, and community health service sectors.
The company is building a strong portfolio of software solutions for the healthcare industry – something that the sector really needs right now to address understaffing, underfunding, and the overall stress that comes with it. The company is performing well, with its third quarter for fiscal 2024 seeing the company report a 25% year-over-year increase in revenue and a 25% increase in its annual recurring revenue in the same period.
As of this writing, it trades for $8.73 per share, down by 27% from its 52-week high. The recent downturn due to the broader market’s decline can be a good opportunity to add its shares to your portfolio on the dip.
Topicus.com
Topicus.com (TSXV: TOI) is an $11.49 billion market capitalization tech stock. Despite being a large-cap stock, Topicus is one of the lesser-known names in the Canadian tech space. The company provides vertical market software and vertical market platforms to clients across the private and public sectors. The company acquires leading software businesses that provide high-impact software solutions. It then uses its capital to build and manage those companies, leading them to greater heights under its umbrella.
Topicus primarily focuses on the European market, which is an attractive market for a company with the capital to invest in and acquire well-established companies. TOI stock has been publicly listed for just a few years, but it is already making great strides. As of this writing, Topicus stock trades for $138.57 per share, up by 120.83% from its IPO. With a large addressable market and plenty of growth opportunities ahead, it can be a solid long-term holding to consider.
Foolish takeaway
Buying and holding high-quality stocks with strong long-term growth potential in a Tax-Free Savings Account (TFSA) can help you reap the benefits even further. The tax-sheltered status of the TFSA lets the value of your holdings in the account grow without incurring income or capital gains tax. This means, you can withdraw funds from the account without worrying about paying taxes on all the gains your investments made in it.
VitalHub stock and Topicus.com stock can be strong long-term winners in the Canadian tech space, each for its own reasons. If you have contribution room available in your TFSA, you can consider allocating some of it to shares of these Canadian tech stocks.
