The Canadian stock market does not look like the prettiest place to invest your money right now. The tariffs being thrown from the U.S. and retaliatory tariffs from Canada are leading to plenty of market volatility. There’s no telling how the situation will pan out, but we can expect plenty of uncertainty in the coming weeks. There is even a realistic possibility of a recession here and across the border.
Investing in growth stocks in a time like this does not seem like the wisest move. However, a downturn across the board might just be the perfect opportunity to reposition your self-directed portfolio for significant long-term growth.
Volatile market conditions also cause share prices of many high-quality stocks to decline along with the rest of the market. Companies with solid fundamentals and strong long-term growth stocks with favourable trends on the horizon can bounce back strong when the dust settles. Against this backdrop, here are three growth stocks you should keep an eye on.
Aritzia
Aritzia (TSX:ATZ) is a $5.85 billion market cap Canadian apparel brand with a solid presence in the North American market. The integrated design house of exclusive fashion brands designs accessories and apparel for several brands and sells them under its banner. Retail and e-commerce are the two major contributors to its revenues.
As of this writing, it trades for $51.81 per share, down by almost 30% from its 52-week high due to the tariff situation. Despite the pullback, the company’s fundamentals remain strong. The company has consistently delivered solid top- and bottom-line growth due to its wares, and the stock has outperformed the broader market. The recent dip can be a good buying opportunity.
Bombardier
Bombardier (TSX:BBD.B) is an $8.21 billion market capitalization leader in the global aviation space, known for delivering some of the most exceptional business jets. Bombardier used to have a rail division and was also involved in commercial aviation operations. After a major transformation, the once-struggling aerospace focuses solely on business jets. The shift is paying off for the company, with Bombardier reporting improved profitability and steady revenue.
As of this writing, BBD stock trades for $15.60, down 17.41% from its 52-week high amid the broader market downturn. Despite ongoing uncertainties, the company has ambitious financial targets. It plans to generate $9 billion in revenue this year and expects to bring $900 million in free cash flow. The company’s financials since its transformation suggest that it is in a much stronger position than a few years ago. It can be a good pick to add to your portfolio on the dip.
Dollarama
Dollarama (TSX:DOL) is a $42.18 billion market cap discount retailer that seems to always be doing better than the rest of the market, especially when the chips are down across the board. The company owns and operates a chain of discount retail stores, providing a wide range of everyday products at low and fixed prices. This business model is perfect during harsh economic conditions when people need to save as much as possible.
As of this writing, DOL stock trades for $150.36 per share, down by less than 3% from its 52-week high. It is hovering close to its all-time high. The business is solid, continuing to do well, and plans to expand its presence in Canada. It also plans to increase its presence in Latin America through its majority stake in Dollarcity. It can be a good investment right now.
Foolish takeaway
Provided things go well, Artizia stock and Bombardier stock can post strong recoveries and deliver outsized gains. Meanwhile, you can bank on the strength of a recession-resistant investment like Dollarama stock to offset the losses from your more vulnerable investments in the short term. The best thing about DOL stock is its ability to post gains even in bull markets.
Allocating a portion of your available Tax-Free Savings Account (TFSA) contribution room to these stocks can help you enjoy wealth growth without incurring any income or capital gains taxes.
