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In 2023, the stock market faced challenges that made it a tough year for investors seeking multi-bagger, market-beating returns from TSX growth stocks. Factors such as high inflation, rising interest rates, and general uncertainty contributed to market volatility, making high-growth and high-risk stocks less attractive. However, by the end of the year, there were signs of improvement. The S&P/TSX Composite Index was up 11.92% from its October 2023 low, thanks to easing inflation, a pause in interest rate hikes, and the anticipation of future rate cuts.
As the market environment evolves, 2024 may offer opportunities for growth stock investors. Here are two growth stocks with attractive valuations that could be poised for growth in the coming year:
Nuvei (TSX:NVEI):
Nuvei, a Montreal-based payments processing company with a market capitalization of $4.60 billion, specializes in providing payment technology and solutions. Despite being a relatively new entrant to the TSX, Nuvei experienced significant growth, with shares soaring by over 270% from its debut in 2020 until September 2020. The stock faced a decline after the tech bubble burst but currently trades at $33.01 per share, down 78.80% from its all-time high. A potential recovery in the global economy could trigger a rally, offering multi-bagger returns for Nuvei shareholders.
goeasy (TSX:GSY):
goeasy, a Mississauga-based alternative financial services company with a market capitalization of $2.65 billion, provides financial services to subprime lenders. Over the last 20 years, goeasy stock has delivered over 2,600% in returns through capital gains, with a 20% decline from its 2021 all-time highs. The company's September 30, 2023, quarterly earnings report revealed a 13% YoY increase in loan originations, and its loan portfolio grew to $3.4 billion. With improving macroeconomic conditions, goeasy's share prices could see further growth in 2024, currently trading at $159.45 per share.
Key Takeaway:
The evolving macroeconomic environment, marked by improving sentiment, presents opportunities for growth stock investors in 2024. While not without risks, considering stocks like Nuvei and goeasy with attractive valuations could be a strategic move to capture significant wealth growth through capital gains. Investors should carefully assess the risks and potential rewards associated with these growth stocks.
