3 Cheap Growth Stocks I’d Buy With $3,000

The TSX has shown strength over the past year, reflecting the resilience of the economy and investor optimism surrounding artificial intelligence (AI) technology and expected rate cuts. While several Canadian stocks posted solid gains, shares of a select number of fundamentally strong companies remain cheap on the valuation front, making them attractive investments near current levels.

For investors looking to buy cheap growth stocks for $3,000, here are my top three picks.

take it easy

take it easy (TSX:GSY) shares have risen by over 65% in a year. Despite this remarkable increase in value, goeasy shares are trading cheaply on the valuation metric. For example, goeasy shares are trading at a trailing 12-month price-to-earnings (P/E) ratio of 11.1, which is lower than the historical average. It is also attractive given the company’s strong earnings growth of over 30% and a dividend yield of 2.3%.

It is noteworthy that goeasy’s earnings per share (EPS) have grown at an average annual growth rate of 30.02% over the past five years.

The company is a leader in Canada’s subprime lending market. Its omnichannel offerings, geographic expansion, diversified funding sources and broad product line position the company well to capitalize on the large non-prime lending market.

Further, this financial services company is witnessing solid momentum in unsecured loans and auto financing. This will boost its loan portfolio and earnings in the coming quarters. Higher earnings, stable payments and credit performance, and productivity savings are likely to boost its future earnings and stock price.

In addition to solid capital gains, this growth stock is likely to increase shareholder returns through higher dividend payments. In summary, goeasy is a solid stock that offers value, income and growth.

Lightspeed Trading

Lightspeed Trading (TSX:LSPD) provides a platform to support omnichannel commerce. Shares have fallen about 33% year to date amid fears of a slowdown in e-commerce growth and economic uncertainty. Given this decline, Lightspeed shares are trading near their 52-week low. However, the tech company’s fundamentals remain strong, making it an attractive investment near its current market price.

Notably, Lightspeed stock is trading at a forward enterprise value/sales (EV/sales) multiple of 1.2, which is close to an all-time low. At the same time, the company’s revenue is growing at a solid double-digit pace, while its gross transaction volume, gross payment volume, and average revenue per user (ARPU) are showing strength. These characteristics make Lightspeed a solid growth stock that’s trading cheaply.

Lightspeed is poised to capitalize on the ongoing shift in sales models toward multi-channel platforms. Furthermore, demand for its products will grow as businesses increase their technology spending to upgrade their traditional payment systems.

Lightspeed is focused on high-value customers, which bodes well for growth as it will improve its ARPU and reduce churn. Furthermore, its accretive acquisitions are likely to accelerate its growth rate. The company is cutting costs and moving toward profitability, which is positive and will likely boost its stock price.

WELL Health

WELL Health (TSX:WELL), a provider of digital health services, could be a solid addition to your growth stock portfolio. WELL Health has consistently grown its revenue at a healthy pace and is focused on delivering profitable growth. While the company is growing rapidly, its shares trade cheaply.

WELL Health shares are trading at a forward EV/sales multiple of 1.7, which is well below its historical average. WELL’s solid growth prospects and low valuation make it a good opportunity to invest in this Canadian growth stock.

WELL Health’s business could continue to grow rapidly thanks to its ability to drive more omnichannel patient visits. In addition, strategic acquisitions further enhance its growth prospects by broadening its product offering and market position. The company is also prioritizing investments in capital-efficient growth opportunities, cutting costs and reducing debt. All of these efforts are likely to support sales and earnings, and in turn, its stock price.