Move Over, Shopify! 2 TSX Momentum Stocks to Watch in 2024


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Shopify (TSX:SHOP) stock is a staple for many Canadian portfolios. And though I think the firm is very well equipped to thrive in the generative and predictive artificial intelligence (AI) age, there are sure to be those steep bumps in the road along the way. In the long run, I think that shares of SHOP will be an investment that pays off.

However, investors shouldn’t expect a smooth ride higher, especially after the recent run shows signs of cooling. As it stands, SHOP stock is coming back from a sudden correction (shares fell around 18% from their 52-week highs). As the tech scene heats up again and the valuation multiple looks to swell again, value investors may wish to consider some of the market’s cheaper options, at least until another pullback in Shopify stock can strike.

In this piece, we’ll look at two momentum stocks that I find far cheaper than Shopify stock. And though I’m not against buying SHOP stock on the way up, I think that investors should consider the broader basket of TSX top performers, as a new leadership group could emerge.

In this piece, we’ll check out shares of Fairfax Financial Holdings (TSX:FFH) and Constellation Software (TSX:CSU).

Fairfax Financial Holdings

Few people probably thought that Fairfax Financial Holdings stock could blast past the $1,500 per-share level more than two years ago. I was a big fan of the stock when it was hovering in its lows of 2020, and I’ve been continuing to pound the table on the way up. Indeed, the market momentum has led to a parabolic surge. Yet shares still aren’t overly expensive in my opinion. Not given how well things are operating behind the scenes.

With short-seller Muddy Waters recently alleging accounting manipulation, some investors may be spooked to the sidelines, ready to take profits in a name that’s already rocketed more than 150% in the past two years. For now, I think investors shouldn’t rush to hit the sell button until there’s more concrete evidence of Muddy Water’s allegations.

Personally, I’d much rather stay on the ride as shares still look quite undervalued, especially given the expertise of the legendary Prem Watsa. He’s known by some as the Canadian Warren Buffett, and for good reason: he’s a stellar manager. And the recent performance of FFH stock is a testament to this.

Constellation Software

Constellation Software is another high-priced TSX stock (shares go for $3,769 and change per share) that has been hot of late, now up 75% in the past two years. I think more gains are ahead as the company “experiment” by picking up Canadian venture capital-backed firms. Constellation seems to know where the value is at in the smaller corners of the Canadian software scene.

As more AI startups come to be, look for Constellation to take notice and help give the firms the jolt they need to seize the AI opportunity as we know it. Indeed, shares are a tad out of reach for most retailer investors, given the sky-high price. Only time will tell if a stock split is in the cards. In any case, I think that buying only one share would suffice if you’ve got the capital to put to work.



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