2022. 9. 7. 00:43ㆍ■ 국제/CANADA
This 1 Canadian Growth Stock Could Double by Next Labour Day (msn.com)
This 1 Canadian Growth Stock Could Double by Next Labour Day
This beaten-down Canadian growth stock could help you get outstanding returns on your investments.
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This 1 Canadian Growth Stock Could Double by Next Labour Day
Jitendra Parashar - Yesterday 11:30 a.m.
The Canadian stock market has been highly volatile lately, as macroeconomic uncertainties continue to keep investors on their toes. These uncertainties have triggered a sharp selloff in high-growth stocks, making some fundamentally strong stocks look really cheap, especially in the tech sector. On this Labour Day, Iâll talk about one of the best growth stocks from the tech sector investors can buy in Canada right now. It has the potential to double in value by the next Labour Day after its recent price correction. Let me explain why.
Dye & Durham stock
Dye & Durham (TSX: DND) is a Toronto-headquartered tech company with a market cap of $957 million. After consistently falling for the last three consecutive months, this Canadian growth stock currently trades with 69.2% year-to-date losses at $13.84 per share. This tech company primarily focuses on providing cloud-based software solutions to legal and business professionals across the globe. Its real estate platform simplifies the mortgage process by integrating various aspects like payments, payout and discharge, and instruction.
Last year, Dye & Durham generated nearly 61% of its total revenue from its home market, while the remaining 28% and 11% came from the United Kingdom and Australia, respectively.
Why has DND stock fallen in 2022?
DND stockâs recent losses could be attributed to multiple external factors, including the recent tech sector-wide crash and the challenging real estate market. As high inflation has forced central banks in Canada and the United States to rapidly increase interest rates, investors continue to flee riskier assets, including high-growth tech stocks.
Recommended video: Canada's inflation rate dips for the first time in a year
Nonetheless, Dye & Durhamâs top-line growth trend has been impressive, despite growing real estate market challenges in the last few quarters. After rising by about 339% (year over year) YoY in the previous three quarters combined, its total revenue rose by 78.3% YoY in the third quarter of its fiscal year 2022 (ended in March) to $122.9 million.
Its recent acquisitions have played a big role in helping the company maintain its strong sales growth trend in the last year. This was also one of the key factors why its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped by 77.6% YoY to $66.8 million in the March quarter.
Strong fundamental outlook
Despite the ongoing real estate market downturn, the long-term financial growth outlook for Dye & Durham with consistently rising demand for its automated software solutions in the post-pandemic world. In January, the company introduced a new subscription revenue model to improve the retention of its conveyancing workflow software customers. This model already started gaining popularity among its customers right after its launch, and Dye & Durhamâs management expects its subscription-based customer base to increase significantly in the coming quarters.
Meanwhile, Dye & Durham continues to execute its strategy of making quality acquisitions. The company remains on track to acquire the Australian superannuation administration industry-focused firm Link Administration Holdings after Linkâs shareholders recently voted in favour of DNDâs acquisition proposal. This deal will likely help Dye & Durham accelerate its financial growth further in the coming quarters, which could trigger a sharp recovery in its stock.
The post This 1 Canadian Growth Stock Could Double by Next Labour Day appeared first on The Motley Fool Canada.
Should You Invest $1,000 In Dye & Durham?
Before you consider Dye & Durham, 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 2022 … and Dye & Durham 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 27 percentage points. And right now, they think there are 5 stocks that are better buys.
* Returns as of 8/8/22
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The Motley Fool has no position in any of the stocks mentioned. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.