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Canadian investors often focus heavily on U.S. tech giants, but with the current CAD-to-USD conversion rate and the value proposition in the U.S. market, it might be a good time to consider investing in TSX growth stocks for the next big purchase. While the TSX Index may not be as hot as the Nasdaq 100, it offers momentum and value that could appeal to value-conscious investors seeking long-term growth.
Here are three Canadian stocks that have quietly outperformed the TSX in recent years:
- Fairfax Financial Holdings (TSX:FFH): This insurer and investment holding company has seen remarkable growth, with shares up more than 142% over the past two years. Despite trading at around $1,350, FFH stock still appears relatively cheap at 6.2 times trailing price-to-earnings (P/E). Led by Prem Watsa, often dubbed the Warren Buffett of Canada, Fairfax is expected to continue outpacing the TSX Index despite recent short-seller comments.
- Alimentation Couche-Tard (TSX:ATD): As one of the top retail stocks for long-term investors, ATD shares have recently surged to new highs, boasting impressive earnings growth. With a trailing P/E of 19.9 times, the stock still seems undervalued considering its quality and management's strategic acquisitions. Investors may want to stick with ATD stock as it continues to outshine the TSX Index.
- Dollarama (TSX:DOL): This discount retailer has seen significant growth, surging over 33% in the past year as consumers seek better deals amidst inflation. With a trailing P/E multiple of 31.4 times, the stock may appear stretched, but the potential for further expansion amid economic uncertainties makes it worth considering.
These TSX stocks offer strong growth potential and may rival gains from America's mega-cap tech titans. Investors looking for value and long-term performance may find these Canadian stocks appealing additions to their portfolios.
