There are different kinds of growth stocks worth considering right now. There are blue-chip names in established sectors with very large moats surrounding their core businesses. I’d argue those stocks are likely to produce meaningful returns and continue to drive the market higher over time.
Then there are more speculative names in higher-growth areas of the market that have the potential to double or triple over the span of just a few years. Picking the quality names from this group is a bit harder to do.
With that in mind, here are two of my top Canadian growth stock ideas right now for investors looking for high upside in the years to come.
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Celestica
One company I haven’t touched on much, but has among the most impressive forward-looking five-year compounded annual growth rate (CAGR) metrics of any Canadian stock is Celestica (TSX:CLS).
Shares of the AI-driven electronics manufacturing company have been on an absolute tear this year, surging from around $100 per share in April to around $400 today. Impressively, this stock is actually down from its recent peak, which presents investors with an intriguing proposition. If this stock can surge as it has over such a short span, does that mean that all the growth is currently baked into its share price, or not?
I think the company’s explosive recent performance potential (in terms of its earnings per share and revenue mix) is intriguing. With solid recent earnings reports (blowing analyst expectations out of the water) signaling analysts may be pricing in lower future growth expectations than the market, I think retail investors could take advantage of this expectations gap for this stock over the course of the next three years.
If AI-driven manufacturing becomes as big a deal as many investors expect, Celestica is a company that could have absolutely massive upside from here.
The Metals Company
Not technically a TSX-listed stock (though this company is based in Vancouver), Canadian deep sea mining firm The Metals Company (NASDAQ:TMC) happens to be a pick I think could actually 10 times over the next five years. Thus, this stock was an easy inclusion on this list.
Shares of the early-stage deep sea mining company have surged as expectations around commercialization and full-fledged revenue and earnings growth have picked up. With demand for critical battery minerals surging thanks to the rise of AI and electrification trends, which appear to be just beginning, TMC could be well-positioned to capture a significant (and portable) piece of this nascent sector.
I think deep sea mining has the potential to be the sector of the future investors aren’t thinking about in the right way currently. With trillions of dollars worth of metals sitting on the sea floor, the companies that first receive the permits to mine for these minerals could be in the pole position to dominate a very large and untapped market.
My 10-year outlook for TMC is that this stock will likely 10 times from here, but that could be conservative given the size of this space. That said, there’s plenty that needs to go right for this thesis to play out. But in terms of speculative growth opportunities, TMC stock is still my top pick for investors right now.
