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Highlights
- Some investors want to earn big at a go. Growth stocks can be a good fit for such investors as these can offer notable capital gains in the near and long term.
- Growth companies typically have high price-to-earnings (P/E) ratios as people expect them to earn more money than their competitors.
- To stay ahead and keep growing in the long run, these companies generally reinvest profits in the businesses.
Some investors want to earn big at a go. Growth stocks can be the best fit for such investors as these can offer notable capital gains in the near and long term.
Growth companies typically have high price-to-earnings (P/E) ratios as people expect them to earn more money than their competitors. To stay ahead and keep growing in the long run, these companies generally reinvest profits in the businesses.
Let us look at five top Canadian growth stocks you should keep in your radar.
1. Pipestone Energy Corp (TSX:PIPE)
Pipestone Energy is among the top energy companies in Canada, and presently has a P/E ratio of 62.50. The Calgary-headquartered oil and gas explorer sold liquids and natural gas worth C$ 100.22 million in Q3 FY2021 compared to C$ 31.7 million a year ago. The energy producer earned a profit of C$ 18.75 million in the latest quarter, up from a net loss of C$ 11.48 million in Q3 2020.
The stocks of Pipestone swelled by nearly 527 per cent in the last 12 months.
The Pipestone stock closed at C$ 4.89 apiece on Monday, January 31, after clocking a day high of C$ 4.96.
Also read: 2 TSX real estate stocks to hold for the long haul
2. Headwater Exploration Inc (TSX:HWX)
Headwater Exploration recorded an adjusted net income of C$ 28.9 million in the third quarter of FY2021 compared to a loss of C$ 1.72 million in Q3 FY2020. The Calgary-based energy company saw its quarterly average production grow to 7,688 barrels of oil equivalent per day in Q3 FY2021, a 17 per cent quarter-over-quarter (QoQ) and by 60 per cent from Q1 FY2021.
The stocks of Headwater shot up by almost 153 per cent in the past one year.
Headwater, which has a P/E ratio of 32.30, saw its scrip close at C$ 7.10 apiece on Monday.
3. Global Atomic Corp (TSX:GLO)
Global Atomic recovers zinc concentrates by processing electric arc furnace dust (EAFD) from steel manufacturers and also operates uranium assets. The metal company, which holds a P/E ratio of 3,270.40, earned a third-quarter net income of C$ 0.54 million in FY2021, substantially up from a loss of C$ 1.88 million a year ago.
The stocks of Global Atomic climbed almost 142 per cent in the last 12 months. The metal stock closed at C$ 3.53 apiece on Monday.
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4. ATS Automation Tooling Systems Inc (TSX:ATA)
ATS Automation saw its second-quarter revenue at C$ 522.1 million in FY2022, up by 55.6 per cent year-over-year (YoY). Its basic and diluted earnings per share were C$ 0.40 in the latest quarter, notably up from C$ 0.13 in Q2 FY2021.
The ATA stock gained by roughly 137 per cent over the last one year. This industrial stock closed at C$ 51.90 apiece on Monday.
Also read: Top 2 Canadian tech stocks to buy as IT sector stages comeback
5. Converge Technology Solutions Corp (TSX:CTS)
Converge Technology Solutions posted a top line of C$ 367.3 million in Q3 FY2021, up by 93 per cent YoY. The software company recorded a profit of C$ 4.59 million in the latest quarter against C$ 0.69 million a year ago.
On January 10, Converge acquired a Delaware-based firm, Paragon Development Systems, to improve its enterprise solutions and managed services in North America.
The CTS stock closed at C$ 9.97 apiece on Monday. The software stock jumped by nearly 85 per cent in the past one year.
Bottom line
Growth stocks with robust operations and solid financial growth can earn capital gains in the long run. However, one should also note the key changes that can affect the growth abilities of such companies to avoid losing their money.
Also read: 3 top dividend stocks to buy in February
