Investors seeking high-growth stocks may consider small-cap companies. These are companies that are still in the early stages of expansion, which means they often grow faster than their larger peers, and that growth could translate into impressive returns.
However, note that small-cap stocks are more volatile. Their share prices tend to react sharply to changes in the market or economic environment. That’s why high-growth investors should look for companies with solid fundamentals, significant growth potential, and strong management, as these stocks are likely to deliver considerable returns over time.
With this background, here are three must-own small-cap stocks for high-growth investors.
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Small-cap stocks #1: goeasy
The recent slide in goeasy (TSX: GSY) stock, about a 41% drop from its 52-week high, has pushed the subprime lender back into small-cap territory. The decline followed a short-seller report questioning the company’s accounting practices. Further, its latest quarterly numbers added to concerns as higher credit-loss provisions and financing costs weighed on performance.
Nonetheless, the company’s fundamentals remain solid and far more resilient than its current share price suggests. As a leading subprime lender in Canada, goeasy benefits from robust loan demand driven by a large portion of the population that remains underserved by traditional banks. Moreover, its diversified funding sources, proven omnichannel strategy, and stable credit performance position it well to continue expanding its customer base while managing risk. Also, its focus on driving operating efficiency will cushion its margins and bottom line.
Thanks to the recent decline, goeasy stock now trades at just 6.5 times forward earnings, a steep discount to its historical valuation, despite expected margin improvement and double-digit earnings growth in the years ahead. Further, goeasy also offers a dividend yield of about 4.5%.
Overall, goeasy is a solid small-cap stock offering value, growth, and income.
Small-cap stocks #2: CES Energy Solutions
CES Energy Solutions (TSX: CEU) is another small-cap stock to consider now. The company specializes in advanced chemical solutions used throughout the oil and gas value chain. With upstream activity likely to remain strong in the years ahead, the demand for its products is expected to grow.
CES Energy’s high-performance chemical technologies help producers enhance efficiency and maximize output. This supports the demand for its offerings. Moreover, its asset-light business model and capital-efficient structure enable it to generate reliable free cash flow even in volatile market conditions, giving it financial resilience that many small-cap peers lack.
Recurring revenue from production chemicals continues to drive stability, while the company’s diversified footprint across Canada and the U.S. enhances operational flexibility. Importantly, the majority of revenue now comes from the U.S., positioning it well to capitalize on active basins and navigate trade uncertainties.
As drilling intensifies and producers demand more innovative chemical solutions, CES Energy Solutions appears poised for sustained expansion. For high-growth investors seeking quality small-cap stocks, CES Energy is one worth considering.
Small-cap stocks #3: Bird Construction
Bird Construction (TSX: BDT) is a compelling small-cap TSX stock to consider now. The leading construction and maintenance company benefits from strong exposure across key domestic markets. That reach has helped the company deliver consistent financial performance and driven a meaningful rise in its share price.
Bird Construction’s collaborative contracting approach, designed to balance risk between the company and its clients, adds stability to its operations. Moreover, its focus on low- to medium-risk projects across essential sectors such as power, transportation infrastructure, and defence enables the company to generate steady revenue and resilient earnings.
Bird’s expanding geographic footprint, diversified operations, and a healthy project backlog provide a solid foundation for continued growth. A solid balance sheet gives the company further flexibility to pursue strategic opportunities and strengthen profitability. In summary, Bird Construction is a compelling small-cap stock for high-growth investors.
