What’s up guys, it’s wiz.
Welcome back to the channel. If you are new, I am a Canadian investor. I cover a whole lot of information about investing in Canada and do research into our Canadian market. I dive into growth investing, dividend investing and Canadian small caps / penny stocks. Today, I will be going over three cheap growth stocks that could deliver solid returns in the short, medium and long term. These are Canadian stocks that are mostly known if you do follow the Canadian market, they had their ups and downs, hit some highs and hit some lows, but with overall market correction that happened, it really brings stocks like these ones down to their VALID value price, which creates a big opportunity in the long run with these Canadian stocks. For new investors, you need to join Wealthsimple Trade if you are looking to start investing and live in Canada. If you use my link in the description to join Wealthsimple, you get 2 free stocks worth up to 4500$ so do not miss out. Do not forget to follow the channel and leave a like on this video since I am one of the main channels that is dedicated to talking about Canadian stocks.
As most of you know, the Bank of Canada increased its benchmark interest rate by 100 basis points earlier this month to 2.5%. The central bank has announced that it could further raise interest rates in the coming month amid the inflation environment. Higher interest rates could increase borrowing costs, thus lowering the profits of growth stocks, which require higher capital to fund their growth initiatives. So, growth stocks have witnessed substantial selling over the last few months. However, I believe the selloff in the following three tech stocks is overdone, thus providing an excellent entry point for long-term Canadian investors.
The first stock is WELL Health Technologies (ticker symbol WELL). Amid the recent weakness, WELL Health is trading at a discount of 59% from its 52-week highs. The steep correction has dragged its NTM price-to-sales ratio and NTM price-to-earnings ratio down to 1.4 and 15.8, respectively. However, the company’s financials continue to grow at a healthier rate. Recently, the company announced its second-quarter performance, with its revenue projected to cross $130 million. During the second quarter, the company recorded omnichannel patient visits of around 840,000, representing year-over-year growth of 50% and sequential growth of 7%. The strong performance from its U.S.-focused virtual patient services drove the company’s financials. Along with top-line growth, the company’s adjusted EBITDA also came in at an impressive $23 million while generating a free cash flow of $15 million. Additionally, I expect the uptrend to continue amid the increased adoption of telehealthcare services and WELL Health’s aggressive acquisition strategy. So, I believe long-term investors should utilize the selloff to accumulate the stock to earn superior returns in the long run.
The second stock is BlackBerry (ticker symbol BB). BlackBerry offers a wide range of cybersecurity solutions. Amid digitization and increased adoption of a hybrid working model, the spending on cybersecurity solutions is rising. Despite the rising competition, the company continues to resonate with blue-chip companies, given its range of innovative product offerings. BlackBerry has substantial exposure to the automotive sector, with its QNX platform installed in 215 million vehicles. The demand for advanced driver-assistance systems and digital cockpits is rising, thus expanding the addressable market for the company. Its IVY platform, which standardizes data access across vehicles and aids software developers in building apps that run across vehicles, could be a significant growth driver. Meanwhile, BlackBerry has already received several requests from OEMs to develop proof of concept. Despite its healthy growth prospects, the company is trading at a 49% discount compared to its 52-week high. So, given its multiple growth drivers and discounted stock price, it’s a great time to start a position for the long run.
The third and final stock is Goodfood Market (ticker symbol FOOD). Recently, Goodfood Market reported its third-quarter performance, with its revenue falling by 8.2% from its previous quarter to $67 million. However, its gross margin improved by 2.2% to 26%, while its SG&A expenses declined by 11.4% to $29.4 million. The introduction of Project Blue Ocean in the last quarter has helped the improvement of its gross margin and expenses. Meanwhile, the company’s management expects further improvements in the coming quarters amid improvement in operational efficiency. With the expansion of its on-demand delivery service to Toronto, Montreal, and Ottawa, the company has around 38,000 active subscribers at the end of the third quarter, representing a 41% quarter-over-quarter growth. Goodfood Markets has built nine micro-fulfillment centres to expand its on-demand service further. Despite improving profits, Goodfood Market trades around 88% lower than its 52-week highs, with its NTM price-to-sales multiple standing at 0.4. So, I believe Goodfood Market is a good buy at these levels.
Hope you guys enjoyed these 3 Canadian tech picks, these have a good amount of potential ahead so if interested make sure to always do your own due diligence before investing into any of the mentioned companies. If interested in more Canadian tools for your investing, check out the kofi link in the description to get access to my custom excel of my stock portfolio and my holdings. I also have a free Canadian investing blog for investors if you prefer reading over videos, head over to unwiz.com if interested. Please watch my previous videos on Canadian stock recommendations and let me know of any Canadian stocks you want me to look into and give my opinion on. Let me know in the comments, since I really want to expand my knowledge in the Canadian market, and you also expand your own knowledge by asking questions. It is a win-win situation. If you did enjoy this video, leaving a like really helps grow the channel! Thanks for watching, I’ll see you guys in the next video!