Yahoo Finance $10,000 Invested in These Growth Stocks Could Make You a Fortune Over the Next 10 Years
Written by Adam Othman at The Motley Fool Canada
Time, a decent amount of capital, and suitable investments — these are the three ingredients for a healthy nest egg. So, if you have $10,000 and 10 years at your disposal, all you need is the right growth stocks to maximize the return potential of your capital.
Keep in mind that a stock’s past performance is not an accurate predictor of the future, but that’s typically the first choice for assessing a stock’s potential, especially if there isn’t strong evidence to suggest that a stock is derailing from its long-term bullish phase.
A private lending company
goeasy (TSX:GSY) has been servicing people needing a loan that can’t approach a bank for over three decades. It has grown substantially in that time, and with over 400 locations, it’s comparable to many credit unions in scale. It has a portfolio of three brands covering personal, home, and merchant loans. It’s also a promising growth stock.
The most significant growth phase in the stock’s history was after the pandemic. The stock rose over 600% in less than two years. But the pre-pandemic growth makes it an excellent pick for a $10,000 investment.
In the 10 years between Feb. 2011 and Feb. 2020, the stock grew about 700% or roughly 70% yearly. Even if it underperforms and grows about 50% a year from now on, you can still experience five-fold growth. That’s better than what most bank stocks offer to Canadian investors.
A real estate service company
The real estate sector in Canada is going through a powerful deflation and correction, but FirstService (TSX:FSV) is relatively immune to local market dynamics for two reasons.
The first is its business model — essential real estate services and property management, in which it’s a clear leader in North America. The second reason is its U.S.-based market. Regionally, only a small portion of its revenues comes from Canada.
The stock experienced exceptional growth since inception but hit a bump after the supercharged bullish phase in the post-pandemic market. It has brutally corrected and has started to go up again. It hasn’t been around for a decade, so if we consider four years before the 2020 crash, the stock rose about 190% quite consistently (between Feb. 2016 and Feb. 2020).
That’s 47.5% growth on average a year, and if we assume the stock underperforms slightly in the next decade, you can still expect roughly four-fold returns.
A cargo airline
Cargojet (TSX:CJT) is Canada’s premier cargo airline, with over 70 routes and a fleet of 38 aircraft. The airline handles time-sensitive cargo and has a stellar history of on-time arrivals (98.5%). This competitive edge and a good relationship with e-commerce companies endorse its potential as a financially sound and growing business.
It is still in the correction phase after it peaked during the pandemic and has fallen so much that it’s trading at just 7% above its pre-pandemic peak, and that’s after the recovery it experienced in the last few weeks.
Its growth before the pandemic far outstrips both other stocks, and it rose by over 1,200% between Feb. 2011 and Feb. 2020. So, even if it underperforms, there is a chance that it may offer 10-fold growth in the next bullish phase (assuming it continues for a decade).
Foolish takeaway
Assuming you equally divide your capital and invest in these three top stocks, which offer the projected growth in the next decade, you can grow the $10,000 seed to over $63,000. Since all three stocks are from entirely different industries, they are also a good set from a diversification perspective.
The post $10,000 Invested in These Growth Stocks Could Make You a Fortune Over the Next 10 Years appeared first on The Motley Fool Canada.
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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cargojet. The Motley Fool recommends FirstService. The Motley Fool has a disclosure policy.
2023