Stock market corrections always feel awful. Often, the best times to invest are the times it feels the worst. Over time, you can maximize your returns by buying on serious dips. It might feel extremely uncomfortable, but it can pay off in the long run.
If you want to invest and build a significant nest egg, you don’t need a lot of cash. In fact, $15,000 can become a substantial sum if you let it grow and compound for years. If I were starting out with $15,000, here are three technology stocks I’d look to add on any future market corrections.
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A top Canadian tech stock for the decades
Constellation Software (TSX: CSU) has been one of the best-performing tech stocks in Canada for more than a decade. There is nothing flashy about this company, however. It operates over 1,000 niche software companies around the world.
Its software tends to be industry, customer, or geography-specific. Constellation’s companies tend to be relatively low growth. But they generate a lot of spare cash. Likewise, they often tend to be the leading (or the only) provider in their segment. Consequently, switching costs are high, and customer churn is low.
Constellation still has a huge runway for growth. It has around 1,000 companies in its portfolio. Its investable universe is 40,000-60,000 companies globally. Give it time, and this company could continue delivering exceptional returns (like historically).
A tech stock in the growing space industry
MDA Space (TSX: MDA) may not be a software stock, but it is definitely a tech-heavy business. It is a crucial provider of components for the space and satellite industry. It has a huge library of intellectual property.
As the space industry has accelerated, MDA has benefited. Last year, MDA grew revenues by 34%, and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 25%. The space industry is expected to grow by a 5% annual rate for the next decade (or longer).
MDA has a $4.4 billion backlog right now. That should fuel several years of strong growth ahead. MDA just made a high-tech semiconductor acquisition that could provide it with even more capabilities. If you believe space will continue to be a growing industry, MDA is an intriguing growth stock to hold.
A software company for the logistics industry
Another tech stock to help grow your nest egg is Descartes Systems Group (TSX: DSG). This stock has been under pressure ever since President Trump commenced his global trade war.
Descartes offers a global logistics network. It compliments that with a mix of software solutions catered to the logistics, trade, and transport industries. Today, those industries are facing challenges. Fortunately, Descartes’s solutions help customers manage those challenges better.
Descartes has a lot to like in a tech business. It has a great management team. It has a cash-rich balance sheet, and it has been a serial acquirer. If there is an economic downturn, it can be opportunistic to pick up software companies that are priced cheaper. The biggest challenge is that it is a pricey stock. If it were to pull back anymore, it could be an attractive stock purchase.
