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Value for Money: 2 TSX30 Winners to Own for Less Than $7

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·4 min read
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Value for money
Value for money

Written by Christopher Liew, CFA at The Motley Fool Canada

The highly anticipated TSX30 list for 2021 is out. Growth investors have a wide selection of investment prospects entering the fourth quarter of this year. It’s the third edition of TMX Group’s flagship program that showcases Canada’s top-performing growth stocks.

Shopify, number one in 2020, slid to second place, although it remains a solid choice, because it could dominate the e-commerce space soon. However, the tech stock is expensive at $1,828.89. Capstone Mining (TSX:CS) and EcoSynthetix (TSX:ECO) are viable choices for frugal investors. You can own them for less than $7 per share.

Transformational growth

Capstone Mining is in the top five due to its 433% return in the last three years. Also, the current share price is only $5.04. The $2.87 billion company prides itself as an innovative copper producer positioned for transformational growth. It has two producing copper mines (U.S. and Mexico) and owns a large-scale, fully-permitted copper-iron-gold project (Santo Domingo) in Chile.

Management impressed investors with Capstone’s production and financial results after two quarters in 2021. Total revenue jumped 136.2% in the first half of this year versus the same period in 2020. From a net loss of 417.6 million, the company posted $176.4 million in net income.

In Q2 2021, Capstone generated a record $110 million in operating cash flow. Year to date, the total operating cash flow was $205 million, according to its SVP & CFO, Raman Randhawa. The net cash balance increased to $172 million. Notably, Capstone had $225 million in the undrawn corporate revolving credit line.

Regarding the year-to-date copper production and sales, Capstone reported increases of 23.1% and 35.1%, respectively. Randhawa added, “Cashing up at the forefront of our transformational growth phase will allow Capstone to execute on Santo Domingo and many other robust, high-impact projects.”

Capstone’s current share price is 238.3% higher than a year ago, and the mining stock is up 111.8% year to date. Market analysts recommend a strong buy rating and forecast a potential upside of between 22% and 57% in the next 12 months.

Investing for growth

EcoSynthetix in the basic materials sector flies under the radar. This stock made it to the TSX30 list (rank no. 14) owing to its +243% three-year performance. The current share price is $6.16, which is good for a 66.9% gain thus far in 2021. However, had you invested $10,000 a year ago, your money would be worth $28,127.85 today.

The $353.05 million renewables energy company specializes in bio-based materials. EcoSynthetix’s flagship commercial products reduce their customers’ use of harmful materials like formaldehyde and styrene-based chemicals.

Ecosphere biolatex is widely used globally in the paper and paperboard packaging industries. The product is a suitable replacement for petroleum-based Styrene Butadiene latex binders. EcoSynthetix customers use DuraBind biopolymer, a no-added formaldehyde binder system to produce wood composite panels.

Jeff McDonald, EcoSynthetix’s CEO, said, “Our primary focus is delivering meaningful growth in the wood composites end market as part of our multiple shots on goal product strategy.” The company is investing for growth and hopes its green technology platforms help customers reduce their carbon footprints significantly.

Value for money

Capstone Mining and EcoSynthetix deserve to be on the TSX30 list. The stocks’ performances in 2021 reflect their business growth. You get value for money when you invest in one or both. Also, the potential returns could be better than Shopify’s.

The post Value for Money: 2 TSX30 Winners to Own for Less Than $7 appeared first on The Motley Fool Canada.

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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends TMX GROUP INC. / GROUPE TMX INC. and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.


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