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2 TSX Growth Stocks Set Up for Outsized Gains in 2024

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Source: Getty Images

Written by Adam Othman at The Motley Fool Canada

Canadian growth stocks have the potential to grow their financials at a faster pace than the broader stock market can offer, offering a greater potential for returns compared to the rest. That said, the higher growth potential comes with a greater degree of capital risk.

To deliver growth faster than others, these companies also require more capital to fund their initiatives to achieve those goals. Thus, they also trade at higher-than-normal valuations.

If you are an investor with a higher risk tolerance, you might be better suited to investing in these companies. For conservative investors, the risk of losing a lot of the money invested in the stock market is not a promising picture.

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Suppose you have a well-balanced portfolio and are willing to take a few risks in the stock market to capture the potential for significant wealth growth. In that case, I will discuss two TSX growth stocks you should keep on your radar.

Nuvei

Nuvei Corp. (TSX:NVEI) is a $4.9 billion market capitalization payments processing company headquartered in Montreal. The company offers a valuable service to businesses worldwide through its payment solutions.

Besides its secure payment gateway services, Nuvei also offers security and risk management, recurring and subscription billing, multicurrency pricing, dynamic currency conversion, and ACH payment processing services.

As digital payment solutions keep increasing in popularity, Nuvei remains in pole position to grow along with the demand. The fintech is also expanding its addressable market by forging partnerships and launching new products and futures that can boost its earnings for years to come.

As of this writing, Nuvei stock trades for $34.96 per share. While up by 54.4% from its August 2023 levels, it still trades for a massive 80% discount from its September 2021 all-time high.

WELL Health Technologies

WELL Health Technologies Corp. (TSX:WELL) is a $948.5 million market capitalization telehealth company headquartered in Vancouver.

The multichannel digital health technology company is also the largest owner and operator of outpatient health clinics in Canada. The company owns and operates several primary healthcare facilities in Canada and the US, while offering EMR services to clinics and doctors throughout Canada.

The pandemic saw a massive surge in demand for telehealth services. Being the only tech company in the healthcare sector in Canada, WELL Health saw a massive boost in its share prices. After the rapid growth, the tech sector meltdown and move into a post-pandemic era saw it fall out of favour with investors.

The company is currently undertaking cost-optimization initiatives to improve its financials. It has also signed agreements to acquire several clinics through mergers and acquisitions and absorption program deals. These initiatives make the management confident about a significant improvement in its revenue in 2024 and beyond.

As of this writing, WELL Health stock trades for $3.95 per share. Down by 55% from its February 2021 all-time highs, it could be an astute move to add this stock to your portfolio before a potential recovery.

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Foolish takeaway

Amid the boom in the industry after the stock market began recovering from the pandemic-induced sell-off frenzy, Canadian tech stocks became synonymous with growth stocks. For many, tech stocks became almost infallible assets to consider for multi-bagger returns. However, the meltdown due to several factors and bubble bursting put things into perspective.

While investors are no longer as afraid of indulging in Canadian tech stock investing, most know better than to go all-in with these risky investments. Despite the risk associated with these growth stocks, it is clear that Canadian tech stocks offer substantial wealth growth potential.

If you have the investment capital to spare and are willing to take the risk, adding Nuvei stock and WELL Health stock to your self-directed portfolio might turn out to be a bet well worth your dime in the long run.

The post 2 TSX Growth Stocks Set Up for Outsized Gains in 2024 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 Nuvei. The Motley Fool has a disclosure policy.

2024