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The Toronto Stock Exchange launched the TSX30 last year. It is a flagship program that showcases the 30 top-performing stocks on the TSX and companies that have represented sustained excellence in the long-term.
The returns on the companies are calculated on the basis of dividend-adjusted share price appreciation over a three-year period. The list for 2020 was released last month and here we look at the top TSX five performers in the last three years.
John McKenzie, CEO of TMX Group said, “We are especially proud to present the 2020 TSX30, an important means of showcasing some exciting issuer success stories across our market.
He added, “In a year fraught with challenges for so many businesses, the crucial role publicly listed companies play in the Canadian economy is even more amplified. These companies serve as engines of growth; creating jobs, generating returns and creating value for investors.”
Shopify is the top-performing stock on the TSX30
5 Top TSX30 Stocks to Watch Out for in 2021
The first stock in the list is Shopify which is also Canada’s largest company in terms of market cap. Shopify is an e-commerce giant and has gained over 6,000% since it went public back in May 2015. It has consistently crushed market returns despite concerns over high valuations.
Shopify managed to increase its sales by 97% in the second quarter as the COVID-19 pandemic continued to act as a tailwind for e-commerce platforms. Comparatively, its gross transaction value rose 119% year-over-year in the June quarter.
Online sales just account for 16% of total retail sales in the U.S. which provides Shopify enough room to expand revenue in the upcoming decade. This growth in sales will also help the company improve profit margins at an enviable rate, making it a top bet for growth investors.
A hydrogen fuel cell company
Shares of Ballard Power Systems have gained over 1,000% in the last five years. The company engages in the design, development, manufacture, sale, and service of proton exchange membrane fuel cell products.
The company offers heavy-duty modules, fuel cell stacks, backup power systems, and portable power/ unmanned aerial vehicles (UAV), and material handling products. It also provides technology solutions comprising engineering services and technology transfer services, as well as licenses and sells intellectual property portfolio and fundamental knowledge for various fuel cell applications.
The company serves transit bus, automotive, rail, truck, material handling, UAV, marine, and critical infrastructure markets. In the last decade, Ballard Power has doubled its sales and though it is struggling with negative profit margins, the company is part of a high growth industry with multiple revenue drivers.
A cannabis heavyweight
Another company that is part of a disruptive industry is Cronos Group, a stock that has returned 3,500% since July 2016. However, it has lost a massive 75% since March 2019.
Cronos Group operates as a cannabinoid company in the United States and in other international markets. It manufactures and distributes hemp-derived supplements and cosmetic products through e-commerce, retail, and hospitality partner channels.
The company is also involved in the cultivation and marketing of cannabis and cannabis-derived products for the medical and adult-use markets. Its brand portfolio includes PEACE NATURALS, a global wellness platform, while adult-use brands comprise COVE and Spinach, and hemp-derived CBD brands consist of Lord Jones and PEACE+.
Cronos and cannabis peers continue to be impacted by structural issues that include a thriving black market, low profitability, billion-dollar write-downs, tepid demand, and a slew of other regulatory issues. However, the long-term prospects for pot stocks make them an attractive bet right now.
Gold stocks are a defensive bet
The next two companies part of the TSX30 are gold mining stocks. Prices of the yellow metal are up 30% in 2020 and might move higher given the uncertainties in the global markets. Interest rates at record lows and coupled with a weak U.S. dollar there might be a good chance for gold prices to breach the $3,000/ounce price by end of 2021.
Kirkland Lake Gold stock has returned over 2,000% in the last five years while Wesdome Gold Mines stock is up 1,000% since October 2015.
Kirkland Lake Gold engages in the acquisition, exploration, development, and operation of gold properties. The company’s principal properties include the Fosterville Mine located in the State of Victoria, Australia, and Macassa Mine situated in the Municipality of Kirkland Lake, Ontario, Canada.
It has a strategic alliance agreement with Newmont Corporation to assess regional exploration opportunities around Newmont’s Timmins properties and the company’s Holt Complex in Ontario, Canada.
Wesdome Gold Mines engages in the exploration, extraction, processing, and reclamation of gold in Canada. The company’s principal assets include the Eagle River Mine, which consists of three contiguous mining leases and 442 contiguous active mining claims covering an area of 7,958 hectares; the Mishi Mine that consists of 19 patented mining claims, five mining leases, and five staked claims covering an area of 3,055 hectares; and the Eagle River Mill located near Wawa, Ontario.
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