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3 days ago
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2 Growth Stocks to Scoop Up Now and Build Wealth for Generations
Written by Joey Frenette at The Motley Fool Canada Despite all the tariff jitters and economic headwinds, the TSX Index is off to a pretty good start to the year, with the index up more than 5% so far, better than the S&P 500, which is just shy of 1% higher year to date. Though it's tough to tell what the second half holds, I do think the odds favour the TSX Index as investors look to pay more attention to the value trade while trimming profits from the recent tech relief run. In this piece, we'll check in on a few growth stocks that could still stand tall over the next two to three years. Though the tech trade is getting hotter again, the following names, I believe, seem to still have valuations that are punching well below their weight class. Without further ado, let's check out two growth stocks that could help TFSA investors build generational wealth. Constellation Software (TSX:CSU) is starting to become a must-watch growth stock for young investors looking to build wealth over the decades. Undoubtedly, the stock looks quite pricey on the surface, now going for more than 100 times trailing price-to-earnings (P/E). That's lofty, even for a firm with a proven track record of growing earnings and sales via smart, strategic M&A. Though a premium is warranted on the name, I'd much rather wait for a steeper pullback before getting aggressive with hitting the buy button. With the stock up a modest 10% year to date, shares are faring quite well, at least compared to some of the choppier high-tech plays south of the border. In the second half, investors should look for Constellation to get a bit more active on the acquisition front, especially as AI becomes a bigger needle-mover for small software companies (prime takeover targets for a firm like Constellation). Perhaps Constellation is wise to be a bit quieter with M&A in the first half, given the recent volatility and tariff hailstorm that could continue to weigh most heavily on the tech sector. Alphabet (NASDAQ:GOOG) stock is another value play for investors looking for a steep discount to intrinsic value. Of course, the major story of the year for Alphabet has to be the disruptive potential of AI search platforms and the potential impact on the Google Search business. In many ways, it seems like Google's best days are in the rear-view. Time will tell if Google's Search moat will be eroded away. In any case, I don't think the search giant is on its way out, especially as it spends a great deal on AI innovations like Veo, Gemini, and more. If Google spends in the right places, perhaps the disrupted could become a disruptor in other markets beyond the search scene. With an 18.5 times forward price-to-earnings (P/E) multiple, I view GOOG as a deep-value stock that's hiding in plain sight this June. In the second half, look for antitrust headwinds and search fears to subside, as more focus shifts to what the firm is doing right on the AI front. Perhaps any losses suffered by the search business could be made up for in other AI-driven areas. The post 2 Growth Stocks to Scoop Up Now and Build Wealth for Generations appeared first on The Motley Fool Canada. Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Alphabet wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Alphabet and Constellation Software. The Motley Fool has a disclosure policy. 2025
Yahoo
27-05-2025
- Business
- Yahoo
Tech Turnaround? 2 Recovering Tech Stocks I'd Buy This Earnings Season
Written by Joey Frenette at The Motley Fool Canada With tech stocks fresh off a somewhat better-than-expected slate of quarterly earnings results, the growth trade may have what it takes to reheat as we head for the second half of the year. Indeed, in the face of tariffs and a potential recession, it's only prudent to resist the temptation to overpromise. For now, there may be more of an incentive to sandbag to lower analyst expectations for future quarters, given it's tough to tell what the next few weeks and months could hold, let alone the year ahead. In any case, I find the following two recovering tech stocks to be worthy buys after posting decent earnings results. While the tech sector is bound to face far more volatility than the rest of the market, I certainly wouldn't bet against them as they look to extend their relief rallies on the back of the generative AI trend. Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) stock has finally gained some ground after tumbling close to 30% from peak to trough. Indeed, many investors are jittery over the potential for antitrust action and the future of Google Search amid the continued rise of search-focused AI products (ChatGPT's new search button?). Indeed, Google's moat is going to be put to the test. Still, with a strong showing at its 2025 I/O event, I'd argue there are enough AI drivers in the pipeline to push the stock back to all-time highs north of the $200 mark. Whether we're talking about the intriguing AI Mode, the latest and greatest text-to-video model Veo 3, or the next frontier for Android, there's no shortage of innovations to get excited about. While investors aren't pounding the table following the I/O showing, I think the recent relief rally (up 17% since the April lows) is worth getting behind. Will the opportunity to snag a few shares of GOOG or GOOGL at less than 20 times trailing price-to-earnings (P/E) last? I have no idea. But I see shares as relatively cheap, even in the face of worrisome headlines that have caused some investors to throw in the towel. Shopify (TSX:SHOP) is another high-tech darling that showed off plenty of promising AI features and concepts to the world in recent weeks. In a prior piece, I praised the firm for its new AI offerings while noting they'd likely give the e-commerce platform the charge it needed to grab more market share from its competitors. While tariffs and the impact on coming quarters will be the talk of the town, I'd be more inclined to focus on how well Shopify can monetize its innovations. If they save a merchant time, money, or drive sales, I'd argue that a recession shouldn't detract from demand for such essential features. As investors forgive (and begin to forget about) the latest quarter, which saw a bit of a slowing in merchant volume growth, perhaps SHOP stock can get revenue growth and margins back in the right spot. At the end of the day, investors should judge firms on how well they can overcome headwinds relative to industry rivals. The $185.8 billion company may boast a sky-high 2.7 beta (that implies far more choppiness than the TSX Index), but if you're looking for a sound, fundamentally strong growth narrative that stands to get more attractive over time, it's hard to overlook the name at current levels. The post Tech Turnaround? 2 Recovering Tech Stocks I'd Buy This Earnings Season appeared first on The Motley Fool Canada. Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Alphabet wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Alphabet. The Motley Fool has a disclosure policy. 2025
Yahoo
20-05-2025
- Business
- Yahoo
These Stocks Simply Look Too Cheap to Ignore Any Longer
Written by Joey Frenette at The Motley Fool Canada If you sold in May and went away, you missed out on a more than 4% gain in the TSX Index and S&P 500, a striking return in around two weeks. And while Trump's tariff talks may be far from over, it seems like the bargain hunters are ready and willing to step in despite recession risks, which Jamie Dimon, CEO of JPMorgan Chase, still believes is on the table for the American economy. Undoubtedly, a recession has proved quite elusive in recent years. While we'll eventually get one (whether it's tariffs, a crisis, or some other event that weighs heavily on economic growth), investors shouldn't forego the low-cost stocks that they're tempted to pick up just because someone smart on Wall Street thinks that the economy could be in for a bit of a doozy. At the end of the day, long-term investors must steer through all sorts of environments. And riding through the rocky terrain is just a part of what's to be expected. The market road to retirement isn't always freshly paved. Many beginning investors find this out the hard way as they sell into a sell-off, missing the sharp rebound and being forced to buy back their shares at higher prices. Of course, it was hard to buy the April dip in stocks. But if you went on a month-long vacation the day after Liberation Day tariffs sank global financial markets, you would have done just fine. In any case, changing your investing game plan based on a single event or pundit prediction is a dangerous game that may lead to returns that trail those of the market averages. In this piece, we'll consider two stocks that I find to be great bargains right now as the TSX Index looks to add to its recent breakout gains. CN Rail (TSX:CNR) stock is in recovery mode again after steadily descending for the past year. While most stocks tend to take the elevator down and the stairs back up again, some names tend to do the opposite. With CNR shares soaring over 14% so far in May, the railway giant seems to be taking the elevator back up after steadily rolling down the stairs for just north of a year. Indeed, the dividend-growth stock is buying back its own shares, as they look severely undervalued and oversold. With promising growth drivers and a lower bar to pass for future quarters, I think the latest rally is worth getting behind. The stock still yields a generous 2.4%, with a modest 20.8 times trailing price-to-earnings (P/E) multiple. For a wide-moat firm that stands to gain if a potential new North American trade deal gets announced (soon, hopefully), I'd not dare bet against the dividend grower, as it makes a run past $150 per share. Bank of Montreal (TSX:BMO) has also been heating up of late alongside the TSX Index, now up over 11% in the past month. At 13.5 times trailing P/E, with a 4.44% dividend yield, BMO stands out as a great deal of the big Canadian bank stocks. With new highs in sight and respectable exposure to businesses south of the border, I'd be inclined to be a buyer rather than a seller of the $104.5 billion financial at these levels. Sure, the ride could be bumpier, with a 1.20 beta, which entails more correction with the broad market, but for the impressive dividend, the name certainly seems like a great way to ride the economy higher once we're given more clarity with trade. The post These Stocks Simply Look Too Cheap to Ignore Any Longer appeared first on The Motley Fool Canada. Before you buy stock in Bank of Montreal, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Bank of Montreal wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Joey Frenette has positions in Bank Of Montreal and Canadian National Railway. The Motley Fool recommends Canadian National Railway. The Motley Fool has a disclosure policy. 2025
Yahoo
30-04-2025
- Business
- Yahoo
CN Rail vs. CP Rail: Where I'd Put $10,000 in Canadian Railway Stocks
Written by Joey Frenette at The Motley Fool Canada The Canadian railway stocks have been lagging behind the TSX Index and S&P 500 in recent years. Undoubtedly, as Trump's tariff war intensifies and fewer shipments circulate across the continent, the top rail players could stand to be weighed down further. Indeed, wide-sweeping tariffs and their impact may already be partially baked into today's share price. And while only time will tell just how bad the first round of tariffs will hurt, I think there's a pretty strong case for value hunters to start nibbling into a position in a top rail play today, as investors throw in the towel amid tariffs and their potential to cause a bit of a trade drought of sorts. At the end of the day, the top Canadian rail stocks are stellar firms with some of the widest moats around. And while they may be a tad too economically sensitive for most amid a tariff war, those with an investment horizon of at least 10 years ought to be viewing the latest correction in the top transports as more of a buying opportunity. Though I'm not against putting $10,000 in a single name at one time, I do think building a position through the year could be the most prudent move, given it's not at all certain how hard tariffs will hit earnings. With that in mind, I'd start with a $2,000 position and add to it on any further dips, perhaps those that follow underwhelming quarterly showings. But which rail stock is the better bet as they roll into a tariff summer? CN Rail (TSX:CNR) stock seems to have a lot of tariff risk priced in, with shares off close to 26% from their all-time highs. Indeed, this is one of the worst bear markets for CN in a long time. And while another 'lost year' could be in the cards for the stock that's fallen off the tracks, I am a fan of the fast-growing dividend. At the time of this writing, shares yield just shy of 2.7%. That's the most swollen I've seen the yield outside of crisis-level conditions. With a solid dividend-growth history and sudden upside if a trade deal were to be inked sooner rather than later, I'd be inclined to be a net buyer of the dip steadily accumulating through the year. Indeed, catching a bottom in a name that's steadily declining will not be easy. That's why I'd aim to take timing out of the game with a dollar-cost averaging (DCA) approach. CP Rail (TSX:CP) or CPKC is the growthier of the two rail stocks, but it's one that I believe also carries more risks as Trump's tariff war heats up for the summer season. Indeed, management seems to be playing the long game, but many investors may not be willing to ride out the rough patch, especially given its heightened tariff risk. With lots of cross-border freight and a heftier valuation, I think CP stock could be subject to more downside going into year's end. Indeed, higher rewards (and growth) potential often accompany more risk. Now down 19.4%, shares of CP are just below $100 per share. And while there's a robust support level up ahead at the $95–98 level, I wouldn't be so quick to pounce on shares. Not at 24.9 times trailing P/E. That's too rich a multiple for a mere 0.8%-yielder. For now, I find CNR stock to be a better bet, given its lower multiple and much higher yield. The post CN Rail vs. CP Rail: Where I'd Put $10,000 in Canadian Railway Stocks appeared first on The Motley Fool Canada. Before you buy stock in Canadian National Railway, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Canadian National Railway wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Joey Frenette has positions in Canadian National Railway. The Motley Fool recommends Canadian National Railway and Canadian Pacific Kansas City. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
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23-04-2025
- Business
- Yahoo
Netflix Breaks $1,000: Should Canadians Add it to Their Portfolios?
Written by Joey Frenette at The Motley Fool Canada Shares of streaming giant Netflix (NASDAQ:NFLX) recently surged past $1,000 per share for the second time this year after a very respectable earnings beat. Undoubtedly, the incredible surge in the streaming juggernaut may have caught everyone by surprise. Indeed, the tech stock, which was not part of the Magnificent Seven group of tech stocks, is now among the most impressive performers in recent months. And while it's too soon to crown Netflix, the streaming king, as the Magnificent One (the Mag Seven stocks are in a painful bear market right now, as NFLX comes off recent highs), I think that investors looking for a steady ship to sail through a harsh rainy spring and summer may wish to check out the video streamer as it has its way with its industry competitors. Undoubtedly, Netflix stock's moment in four-figure territory did not last long, as shares retreated on a turbulent Monday of trade. While NFLX shares were still up around 1.5% on the day, I'd argue that the bearish day of trade took away from a quarter that should have seen the name rewarded with more significant pop. Either way, being spared from a really bad down day for markets seems good enough, given the indiscriminate selling activity we've witnessed of late in response to Trump's tariff threats and fears that the economy is just months away from falling into some sort of recession. Indeed, the risk of recession seems to be climbing higher. And while it's not too late to avoid such a fall, I do think it's wise for Canadian investors to position their portfolios with an economic downturn in mind. Sure, the dips in the high-multiple stocks are tempting to nibble away at. But it's these types of names that could continue leading the way lower. And if you're looking for a fast bounce-back gain, you may be in for substantial near-term pain instead. Personally, I think Netflix is a surprising defensive way to ride out a recession. Undoubtedly, Netflix is a discretionary subscription that some people ought to cancel if their budget is up against it. However, I'd argue that a Netflix subscription has already demonstrated its immense value proposition. Indeed, even a more cost-conscious consumer may wish to stay subscribed to be more affordably entertained as a recession approaches. Does this make NFLX stock recession-proof, as some on Wall Street believe? That's the big question on the minds of investors right now. Indeed, Netflix's ad-based tier, which goes for around $8 per month, offers unmatched value. Arguably, the ad-based tier may allow Netflix to gain share from rivals, as some hard-hit consumers resort to 'cord-cutting.' In any case, Netflix is the platform that has all the content that everyone's raving about. And, relatively speaking, Netflix is one of the most affordable ways to be entertained. It's not just about the binge-worthy shows, either. The deep library of films and a now bustling library of mobile games (some of which have ties to Netflix's original hit shows) can keep cost-conscious subscribers entertained for hours on end on the cheap. While competition is still fierce, I've yet to see a streamer really thrive at the international level the way Netflix has. As it turns out, the Netflix formula isn't all too easy to replicate. And for that reason, Netflix is a wide-moat firm that may just outperform the rest of the tech in 2025. The latest quarter of standout profits and hot sales, I believe, could be just the start. The post Netflix Breaks $1,000: Should Canadians Add it to Their Portfolios? appeared first on The Motley Fool Canada. Before you buy stock in Netflix, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Netflix wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Netflix. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
