Canadian Growth Stocks to Watch in October: goeasy and Shopify
September was a challenging month for Canadian investors, as the S&P/TSX Composite Index dropped nearly 5%. This marked yet another significant decline in a year that has seen several similar drops. Despite experiencing three 5% surges in 2023, the Canadian stock market as a whole has remained relatively stagnant.
While short-term investors may be hesitant to enter the volatile market, those with a long-term perspective have the opportunity to take advantage of discounted growth stocks on the TSX. In this article, we will review two Canadian stocks that growth investors should watch in October. These picks offer different opportunities, making them a great addition to any portfolio.
First, let’s take a look at goeasy (TSX:GSY), a financial services provider that may not be familiar to all Canadian growth investors. However, its returns over the past decade have been exceptional. The stock has surged close to 600% in the last ten years and over 100% in the last five years. While growth has slowed in recent years, goeasy’s stock price has also pulled back significantly from its all-time highs in late 2021. Like many other growth stocks, goeasy experienced a substantial decline following the market crash caused by the COVID-19 pandemic. The company’s shares have also been negatively affected by high interest rates. However, these rates are expected to be temporary, which is an encouraging sign for long-term investors. With goeasy’s share price currently down 50% from its all-time highs, there may not be another buying opportunity like this for some time.
Next, we turn our attention to Shopify (TSX:SHOP), a Canadian tech stock that was, at one point, the largest company on the TSX. In late 2022, Shopify’s shares were down a staggering 80% from their all-time highs set in 2021. Although the stock has rebounded 50% year to date, it still trades more than 60% below its peak. Like many high-growth tech stocks, Shopify’s stock price reached unsustainable levels in 2021. When the tech sector experienced a downturn in 2022, it was not entirely surprising. However, Shopify remains a dominant player in the global e-commerce space, which offers numerous long-term growth opportunities. Despite the volatility, Shopify shows no signs of slowing down, making it an attractive option for investors who can endure the market’s ups and downs.
Investing in today’s volatile market conditions is not easy, but these difficult times often present can’t-miss buying opportunities. Instead of solely focusing on the share price, it’s essential to evaluate a company’s long-term growth potential. If you believe in a company’s ability to continue growing for many years to come, a 50% discount on its stock price should catch your attention.
In conclusion, goeasy and Shopify are two Canadian growth stocks worth watching in October. goeasy, despite being lesser-known, offers impressive returns over the past decade and a discounted price from its all-time highs. Shopify, on the other hand, has experienced significant volatility but remains a strong contender in the e-commerce industry. By carefully evaluating these stocks and their long-term growth prospects, investors can capitalize on the current market conditions.
