Progress shares took the backseat in 2022 when runaway inflation triggered aggressive rate of interest hikes by the Financial institution of Canada. Nonetheless, regardless of larger volatility this yr, three names are using excessive. These progress shares are my favourites for October 2023.
Expertise
TSX’s tech sector once more leads after a below-par efficiency in 2022. The high-growth sector is the highest performer to date this yr with a 32.99% optimistic return, and healthcare is a distant second (+11.48%). In the meantime, Celestica (TSX:CLS) outperforms each the tech sector and the TSX with a +136.11% year-to-date achieve ($36.03 per share).
The $4.Three billion firm is a pacesetter in high-reliability design, manufacturing and provide chain options at each stage of product improvement. Its end-to-end product lifecycle options assist complicated merchandise throughout varied markets, together with aerospace and defence, communications, enterprise, healthcare, industrial, and sensible vitality.
Celestica’s president and chief government officer (CEO), Rob Mionis, mentioned the diversified portfolio drives income progress and margin growth. Administration expects income progress charges of 8% and 10% in 2023 and 2024, respectively.
Industrial
Hammond Energy Options (TSX:HPS.A) is defying the huge headwinds this yr. The $661.Three million manufactures dry-type transformers and presents reactor options. It caters to numerous industries and markets, similar to industrial, business infrastructure, and renewable vitality.
At $55.55 per share, present buyers take pleasure in a year-to-date achieve of 178.64% on high of a modest 1.15% dividend. A $5,000 funding on year-end 2022 can be price $13,929.29 at present. Market analysts advocate a powerful purchase score. Their 12-month common value goal is $71.67 (+29%).
Within the second quarter (Q2) of 2023, gross sales grew 25.4% versus Q2 2022, reaching a file $172.45 million. Notably, web earnings climbed 105% yr over yr to $13.33 million. CEO Invoice Hammond mentioned, “The second quarter was noteworthy as we continued to ship file monetary outcomes and expertise sturdy demand from a variety of finish markets, which led to the biggest week of bookings within the historical past of HPS.”
Power
Valeura Power (TSX:VLE) is out to ship worth and progress to its buyers in 2023 and past. This small-cap inventory is absurdly low cost ($3.07 per share) but outperforms with a 46.89% year-to-date achieve. In response to administration, the $312.2 million upstream oil and fuel firm from Calgary is now a strongly cash-generating enterprise.
Administration is actively pursuing a growth-oriented technique in Southeast Asia and Turkey. Valeura is nicely positioned to pursue a longer-term deep, tight fuel play in Turkey due to the numerous land place within the Thrace basin. In Thailand, Valeura owns Mubadala Power’s oil-producing portfolio, together with operated working pursuits within the Jasmine/Ban Yen, Nong Yao, and Manora oil fields.
Valeura additionally holds an operated curiosity within the Wassana oil area within the offshore Gulf of Thailand. Q2 2023 is the primary full quarter of manufacturing operations in Thailand. Within the three months that ended June 30, 2023, web loss reached US$1.Three million. Its president and CEO, Sean Visitor, mentioned the quarter’s outcomes mark a step change within the enterprise.
Visitor added that Valeura is starting to see the advantages of working synergies throughout the assembled portfolio. Given the 90-million-barrel manufacturing milestone achieved on the Jasmine oilfield, he maintains a optimistic long-term progress outlook.
Fats returns
This month, Celestica, Hammond Energy Options, and Valeura Power are glorious picks for progress buyers. I count on them to complete sturdy and finish the yr with fats returns.
