TOI:CC - 3 Tech Stocks to Buy as They Bounce Back
2023-11-13 21:30:00 ET
Tech stocks have been some of the hardest hit during this bear market. And what’s more, it’s been going on for years. All those gains that many of us enjoyed are now in the toilet, and it’s incredibly distressing. However, there is a way to get back into tech stocks . In fact, now might be the best time.
There has been a slight turnaround in share prices as governments continue to come out with numbers showing the economy is improving. Several countries, Canada included, announced that there shouldn’t be any more interest rate hikes. This is excellent news, and means the future should show some signs of settling in once more. Thus, it’s the perfect time to look for growth once more.
So let’s look at three tech stocks that should bounce back in a bull market, and have actually already started.
Shopify
It’s no secret that Shopify ( TSX:SHOP ) stock has been bouncing back among tech stocks for a while now. Granted, it’s nowhere near the $228 share price it once enjoyed back in 2021. However, it has still climbed up a whopping 65% in the last year alone.
This comes after the company made several moves that had investors back on board. This included massive lay offs among tech stocks, Shopify stock included. Shopify stock then went on to also sell off its logistics business to Flexport for a 13% stake in the company. Now that’s done, the company has far more cash to focus back on ecommerce. Something that’s already begun, with artificial intelligence (AI) also helping to lead the charge.
Now, Shopify stock has been reporting a massive improvement in earnings. The company saw revenue climb by 25% and gross profit up 36% year over year. What’s more, it reported positive free cash flow for the fourth consecutive quarter. And all this before we’ve even hit the company’s best sales period of Black Friday to Cyber Monday weekend. So I’d say Shopify stock is only going up from here in a bull market.
Lightspeed
Lightspeed Commerce ( TSX:LSPD ) is in a similar position to Shopify stock, but has remained down among other tech stocks. This comes from the company’s massive spending over the last few years, with Lightspeed stock investing US$2 billion in acquisitions around 2020.
Short sellers hurt the stock as well as a report came out claiming its gross transaction volume (GTV) was all “smoke and mirrors.” Shares plummeted from all-time highs, and it has yet to really make a recovery. That’s despite also seeing layoffs and renewed focus on its point-of-sale services. This too has included investment in AI and using the acquisitions to further expand its business.
During its latest quarter, Lightspeed stock reported total revenue of $230.3 million, which was up 25% year over year. The company has also improved its net loss by 47%, now reporting positive earnings before interest, taxes, depreciation and amortization (EBITDA) for the last quarter. GTV came in at $23.5 million, with gross payment volume (GPV) up 59% to $5.9 billion. So, overall, with shares still down by just 5%, it could be a great time to get in on the stock before a Black Friday recovery.
Topicus
Another great option for investors to consider is Topicus.com ( TSXV:TOI ), which is quite different from the other two covered here. Topicus stock is one of the newer tech stocks out there, but with backing from Constellation Software ( TSX:CSU ). In fact, Constellation stock created Topicus stock as a spinoff. The companies are virtually the same, though Constellation is in North America, with Topicus stock focusing on Europe.
The idea is to acquire essential software companies and rebrand them under Topicus stock and Constellation. This has been wildly successful for Constellation stock. Topicus is now offering the same potential growth over the next few years, with shares under $100 per share as of writing. That’s a fraction of the four-digit share price you’d pay for Constellation stock.
Topicus stock is now up 36% in the last year, but it’s practically guaranteed to surge even more. Especially as more investors look for defensive tech stocks these days. So consider Topicus stock as well among your tech stocks when investing during a bull market.
The post 3 Tech Stocks to Buy as They Bounce Back appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has positions in Lightspeed Commerce and Shopify. The Motley Fool has positions in and recommends Shopify and Topicus.com. The Motley Fool recommends Constellation Software and Lightspeed Commerce. The Motley Fool has a disclosure policy .
2023