Written by Daniel Da Costa at The Motley Fool Canada
With so many stocks trading undervalued in the current environment, it can be difficult to decide which stocks to buy, especially if you only have a limited amount of cash. In these environments, though, some of the best stocks to buy while they are undervalued are growth stocks, especially ones with years of growth potential.
Growth stocks are ideal to buy in this environment because not only do they offer capital gains potential over the coming years as the market environment recovers and valuations rise, but they also offer years of growth potential as they continue to expand their operations.
So if you’ve got cash you’re looking to invest to take advantage of this highly opportune market environment, here are three of the best growth stocks to buy right now.
A top transportation stock
One of the best long-term growth stocks in Canada, and one that’s trading unbelievably cheap today, is Cargojet (TSX:CJT).
Cargojet has a tonne of potential to continue growing, especially as the popularity of e-commerce continues to increase over the coming years as technology consistently improves.
Not only are more retailers adopting an online approach, but with shipping times constantly improving, thanks in large part to companies like Cargojet, consumers are increasingly shopping online, buying anything from clothes and discretionary items to staples and other household essentials.
Therefore, considering that Cargojet is a leading provider of time-sensitive overnight air cargo services in Canada, it’s well-positioned to capitalize on the consistent growth in the space and associated demand for faster shipping solutions.
With a proven track record and longstanding relationships with major players in the e-commerce space, Cargojet is an ideal growth stock to buy and hold for the long term.
And although it’s being temporarily impacted as e-commerce sales slow in the current economic environment, analysts estimate its sales will fall just 8% this year and earnings before interest, taxes, depreciation and amortization (EBITDA) will fall just 6%.
Therefore, while the stock trades more than 60% off its all-time highs, it’s one of the best growth stocks to buy now.
An impressive growth-by-acquisition stock to buy right now
Another top growth stock to buy that’s also highly defensive yet trades ultra-cheap in this environment is Neighbourly Pharmacy (TSX:NBLY).
Neighbourly operates a network of almost 300 community pharmacies in seven provinces and one territory across Canada. The company’s strategy is to acquire small, independent pharmacies, which it then rebrands as its own. This helps to improve customer loyalty, as well as scale costs for the growth company, helping it to consistently increase its profitability.
Furthermore, the health and wellness sector typically exhibits resilience against economic downturns, giving Neighbourly an attractive mix of defensive qualities as well as long-term growth potential.
So although the stock has been struggling lately, analysts actually expect its sales will grow by over 22% this year and another 15% next year. In addition, its earnings per share are expected to grow by 17% this year and another 39% next year.
Therefore, while Neighbourly trades at the bottom of its 52-week range, it’s one of the best growth stocks to buy now.
A rapidly growing real estate stock with years of growth potential
Lastly, another unbelievable growth stock trading well off its highs that you can buy now and hold for years is StorageVault Canada (TSX:SVI).
The self-storage industry has seen steady growth in demand for years, thanks to factors like urbanization, smaller living spaces, and periodic life events like moving or downsizing. And StorageVault Canada is the largest owner/operator of storage locations in the country.
Much like Neighbourly, the stock has employed a growth-by-acquisition strategy over the years enabling it to expand rapidly.
In fact, over the last five years, its revenue has grown from just $62 million in 2017 to over $261 million in 2022. This year, analysts anticipate its growth will slow down, which is part of the reason the stock is so cheap today.
However, even with slowing growth, StorageVault Canada is still expected to increase its sales by 8.3% this year and its funds from operations (FFO) per share by over 12%.
Therefore, while StorageVault Canada trades roughly 33% off its 52-week high, it’s certainly one of the best growth stocks to buy now.
Before you consider Cargojet, you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2023... and Cargojet wasn't on the list.
The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 26 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 8/16/23
Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cargojet. The Motley Fool has a disclosure policy.