Finding great stocks to add to your portfolio can be tough. There are several ways investors can find new companies to invest in. The first would be to think of the products and services you use. This is often a great place to start since you know first-hand that those products and services are used by consumers. Another way of finding new stocks is by looking at ETFs that focus on your interests and doing a deep dive on some of the bigger holdings. Finally, investors can look at recent additions to other portfolios.
In this article, I discuss three stocks that I’ve recently added to my portfolio. It should be noted that I tend to gravitate toward growth stocks with the intent of holding these positions for the long term. However, the diversity of the portfolio may allow investors with other strategies to find companies that are suitable for them.
The most recent addition to my portfolio There’s one company that I’ve been bullishly writing about for months, if not longer. Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is a company with a leading position in one of Canada’s most dominant industries. Like its peers in the Big Five, Bank of Nova Scotia possesses a large moat atop the Canadian banking industry. The highly regulated nature of its industry makes it difficult for newer companies to surpass the Big Five.
What differentiates Bank of Nova Scotia from its peers is its large focus on markets outside North America. The company is growing its presence within the Pacific Alliance, a region that covers Chile, Columbia, Mexico, and Peru. Due to the rapidly growing middle-class economy, analysts are forecasting that the Pacific Alliance should grow at a more rapid rate than Canada and the United States in the coming years. That could be an excellent source of growth for the Bank of Nova Scotia.
A small-cap stock with big aspirations Topicus.com (TSXV:TOI) isn’t like many other small-cap stocks. While the average small-cap should be seen as an underdog in the market, Topicus shouldn’t be seen in the same light. Until its Initial public offering (IPO) this past February, Topicus was a subsidiary of Constellation Software. Today, its former parent company still influences Topicus a great deal. Six members of Topicus’ board of directors are executives from Constellation Software.
Since its IPO, Topicus stock has already managed to gain 101%. Despite these returns, Topicus is still only valued at a market cap of $5 billion. If Topicus takes advantage of the wealth of leadership that Constellation Software provides, it isn’t outside the realm of possibility to see it grow to the size of Constellation today.
This company is still one of Canada’s greatest growth stocks Despite having already gained more than 4,800% since its May 2015 IPO, Shopify (TSX:SHOP)(NYSE:SHOP) remains one of the best performers on the TSX. Shopify has been a standout in the last two editions of the TSX30, a list that features the 30 best-performing companies on the TSX over a running three-year period. In the 2020 list, Shopify ranked in the first place, gaining 1043% over the past three years. In 2021, the company fell to second place after an 846% gain.
Investors are starting to think that Shopify’s potential gains will end up being lackluster in the coming years. That said, e-commerce is continuing to increase its penetration in the global retail industry. Therefore, investors should continue to see market-beating gains in the long term. Shopify is a stock I’ll continue to add to in the future.
The post 3 Stocks I’ve Recently Added to My Portfolio appeared first on The Motley Fool Canada.
Fool contributor Jed Lloren owns shares of BANK OF NOVA SCOTIA, Shopify, and Topicus.Com Inc. The Motley Fool owns shares of and recommends Constellation Software, Shopify, and Topicus.Com Inc. The Motley Fool recommends BANK OF NOVA SCOTIA 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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