BYD:CC - 1 Growth Stock With Legit Potential to Outperform the Market
2024-07-26 17:00:00 ET
For investors seeking a top growth stock with the potential to provide market-beating gains, the search is on. Indeed, there are hundreds of companies to choose from, with so many options on U.S.-based exchanges to pick. However, one TSX-based company I think is worth considering in this regard is Boyd Group ( TSX:BYD ).
Boyd is a relatively overlooked automotive services company that’s seen incredible growth in recent years. Of course, at its current valuation, the question is just how much future growth is already baked into its stock price. But if the company can continue to execute, there are reasons why many investors continue to believe this is a stock that can outperform.
With that said, let’s dive into the bull case behind why Boyd Group could be one of the best picks for investors to consider right now.
What does the company do?
As mentioned, Boyd Group is a top automotive services company, operating various chains of autobody service shops in Canada and the U.S. In the Canadian market, the company operates primarily under the Boyd Autobody & Glass banner, with the company operating under the Gerber Collision & Glass banner in the U.S. market.
This company has become among the most prominent retail car glass operators in these markets, also offering claims servicing for third-party administration of various accidental claims. In essence, as we drive more and our cars are on the road longer, Boyd stands to benefit from these long-term trends.
Consolidation trends continue
Notably, Boyd has continued to grow over the years using a growth-via-acquisition model, in which the company scoops up smaller chains of autobody repair shops, rolling them under its banners. This model has worked extremely well, as the company’s brand continues to resonate with its users and its footprint grows.
So long as the company continues to consolidate this fragmented space and move into new high-growth markets, there’s a lot to like about its growth trajectory. Trading around 53 times earnings , it’s clear many in the market continue to believe that the company’s long-term growth trajectory is intact.
Is Boyd a growth stock to buy?
In my view, Boyd’s business model and growth trajectory are attractive. And while the company’s overall sales growth of 10% is certainly strong (maybe not compared to its current multiple), future margin expansion should propel this stock higher over time. I’m of the view that this is a company with room for fundamental improvement, and when investors see this improvement, its multiple should expand. Of course, by the time the market realizes this stock is relatively cheap at current levels, it’s probably going to be too late.
So, for those who believe in the long-term trajectory of this company, now may be a good time to start building a position . That’s my view, for what it’s worth.
The post 1 Growth Stock With Legit Potential to Outperform the Market appeared first on The Motley Fool Canada .
Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Boyd Group Services. The Motley Fool has a disclosure policy .
2024