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2 Explosive Stocks You Need to Know About

Christopher Liew, CFA
A colourful firework display

Aside from e-commerce company Shopify, Lightspeed (TSX:LSPD) and Village Farms (TSX:VFF)(NASDAQ:VFF) have exploded this year, too. Although their explosions are not as astonishing as Shopify’s, the stocks are not expensive and offer better potential for capital growth.

Right technology

Lightspeed is a business builder like Shopify, because entrepreneurs in the restaurant and retail sectors can realize their dreams of starting a business. The company provides these restaurateurs and retailers a simple way to operate their businesses at full potential.

The tech company’s restaurant POS software and omni-channel retail solution is a springboard to success. Over 36,000 businesses processing over $13 billion in annual transactions are using Lightspeed’s software.

Entrepreneurs can manage inventories, customer preferences, sales, and reporting from one centralized platform only. Customers in bars and restaurants are better served with an all-in-one point of sale, table management, and analytics platform.

Lightspeed eCom, the company’s e-commerce platform, is flexible, scalable, and ready to use within minutes. It comes with a built-in suite of marketing tools. Retailers can focus more on marketing than the technical maintenance of their websites. The platform helps drive site traffic and sales.

Since the successful IPO of Lightspeed on March 8, 2019, the stock has risen by 112.16% to $40.10 at the present. With more retailers around the world choosing Lightspeed’s retail POS software, business will absolutely boom. Investors can expect the stock’s upward trajectory to continue.

New weed darling

Weed upstart Village Farms is taking the cannabis industry by storm. The stock rocketed by 257.9% to $15.82 year to date with more upside on the way. It’s not impossible for VFF to hit the 52-week high of $24.25.

Momentum is on the side of Village Farms, as more investors realize that the company’s vegetable growing business is well suited for cannabis cultivation. More so, Village Farms can generate consistent revenue because it’s low margin.

Pure Sunfarms, Village Farms’s joint venture with Emerald Therapeutics, is the tailwind. Both companies worked together to retrofit Village Farms’s existing vegetable-growing greenhouses for marijuana production.

When Delta 2 and Delta 3 greenhouse facilities become fully operational, the combined yield will be 150,000 kilograms. Village Farms could regain the value the company lost. Even with a smaller production capacity compared with the bigger growers, VFF can gain substantial market share.

Village Farms is also preparing to enter the lucrative U.S. hemp market. The company can aggressively pursue the goal. The joint venture projects have planted nearly 600 acres and 120 acres of hemp, respectively. By August, VFF will harvest the larger crop and the smaller crop will follow during the fourth quarter.

The greenhouses in western Texas would be retrofitted next for hemp production. Hemp is a cheaper crop and easier to grow compared to cannabis. Hemp is an abundant source of high-margin cannabidiol (CBD). CBD is the compound with non-psychoactive effects and is known for its medical benefits.

Bottom line

Lightspeed and Village Farms deserve a closer look. With remarkable performances and strong upsides, investors can add two more winning stocks in their portfolios.

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Fool contributor Christopher Liew has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of Lightspeed POS Inc, Shopify, Shopify, and Village Farms International, Inc. Shopify is a recommendation of Stock Advisor Canada. Village Farms is a recommendation of Hidden Gems Canada.

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