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Highlights
- Oddly enough, inflation is not Canada's biggest economic issue, but the recession is.
- The SHOP stock has lost its value significantly this year.
- Constellation Software (TSX:CSU) is a C$ 41.8 billion technology business
The Canadian market has been experiencing mixed sentiments from investors since the start of 2022. Due to various macroeconomic factors, the markets have not remained stable this year, forcing the stock market traders to remain sceptical.
One of the major economic issues faced by the country is rising inflation. Due to a significant increase in the prices of goods and services, people fear that Canada might face a recession.
Oddly enough, inflation is not Canada's biggest economic issue, but the recession is. Some analysts believe that the biggest risk is the government's efforts to curb price increases by rising interest rates, which could negatively impact the economy.
As recession fears prevail in the country, some investors might be looking to diversify their investment portfolios. Therefore, we have selected two stocks for this article, and you might consider exploring them:
Shopify Inc. (TSX:SHOP)
The SHOP stock has undoubtedly lost its value significantly this year. However, it appears to have become a growth stock for investors in Canada. The technology sector has declined by 36.02 per cent year-to-date (YTD), so stocks of companies in the tech sector have fallen massively.
Despite the falling prices, Shopify's continues to expand its business operations by offering its merchants a range of new services. Recently, the company announced the debut of more than 100 new products in collaboration with industry titans like Google and Twitter.
In Q1 2022, the total revenue of Shopify increased by 22 per cent from Q1 2021 to US$ 1.2 billion. Meanwhile, the company also expressed its intent to acquire Deliverr, which provides fulfilment technology to e-commerce companies.
Constellation Software Inc. (TSX:CSU)
Constellation Software is a C$ 41.8 billion technology business that oversees several smaller vertical market software firms. The company focuses on smaller software companies with growth potential and a dominant position in a particular market.
Over the past few years, the strategies of Constellation Software have enabled it to generate a sizable amount of cash flow. In Q1 2022, the company's free cash flow increased by US$ 55 million to US$ 324 million.
The revenue of Constellation Software increased by 22 per cent YoY to US$ 1,431 million in the first quarter. Also, the company's net income was US$ 98 million compared to a net loss of US$ 9 million in Q1 2021.
Please note, the above content constitutes a very preliminary observation or view based on digital trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
