A Bull Market Could Be Coming: 3 Reasons to Buy 3 Stocks

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Written by Jed Lloren at The Motley Fool Canada

Investors needed to be patient in 2022. Many of Canada’s best stocks saw their value drop significantly. Many of those stocks saw decreases of 50% or more. However, patient investors have been rewarded. Stocks have rebounded across the board in 2023, and now many are anticipating that a bull market could be coming. In this article, I’ll discuss three reasons why you should buy three stocks today.

This company leads an important and emerging industry

Although it’s not exactly a new industry, I believe the global e-commerce market still has a lot of room to grow. There are many areas of the world where online shopping is greatly underutilized. As global penetration of online shopping continues to increase, companies that lead the industry could be poised for outstanding growth. That’s where Shopify (TSX:SHOP) comes in. This company supports more than one million merchants on its platform.

Shopify stock has been very polarizing over the past couple of years. In 2022, the stock lost more than 80% of its value. However, in 2023, Shopify stock has managed to gain nearly 50%. Of course, the stock continues to trade far below its all-time high. However, I believe it could return to those levels in the future. Supported by an outstanding product (its platform), Shopify could remain relevant for years to come.

This blue-chip stock offers growth that few can match

It’s not every day that investors find blue-chip stocks that can outperform some of the best growth stocks around. However, that’s exactly what we find in Constellation Software (TSX:CSU). This isn’t a company that most people would be familiar with because it doesn’t operate a consumer-facing business. However, savvy investors should be very familiar with Constellation Software. If you’re the former, know that it acquires vertical market software businesses.

Since its initial public offering in 2006, Constellation Software stock has managed to gain more than 14,300%. The law of large numbers states that businesses should experience slowing growth rates as they grow larger in size. However, Constellation Software is showing no signs of slowing down. Year to date, this stock has gained 24%. With a quarter of the year left to go, I think there’s a good chance the stock could pass the 30% mark for this year.

Very few dividend stocks can keep up with this company

Finally, investors should consider buying shares of Canadian National Railway (TSX:CNR). Although this stock tends to grow less per year than the first two companies mentioned, I think it’s still worth holding in your portfolio. Compared to many dividend stocks, Canadian National is an outstanding performer. Over the past five years, this stock has gained more than 34%.

What makes this company interesting, in my opinion, is the fact that there isn’t a viable way to transport large amounts of goods over long distances if not via rail. That should help keep companies like Canadian National Railway in high demand for the foreseeable future.

The post A Bull Market Could Be Coming: 3 Reasons to Buy 3 Stocks appeared first on The Motley Fool Canada.

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Fool contributor Jed Lloren has positions in Constellation Software and Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Canadian National Railway and Constellation Software. The Motley Fool has a disclosure policy.