One of the brightest success stories on the Toronto Stock Exchange (TSX), Lightspeed POS (TSX:LSPD) has sharply rebounded from its March lows in a way that has truly surprised me. This continues to be a story stock built on the foundation of strong growth in the retail sector, a proposition which seems improbable at least in the near term, given the sheer number of bankruptcies and unemployment claims we’ve seen come through in recent weeks.
That being said, many growth investors will have noted the company was likely oversold in March, as the market violently reacted to the possibility of severe structural economic problems on the horizon. Central banks and governments around the world have reacted in previously unfathomable ways with monetary and fiscal policy stimulus in an effort to support the base of the economy, including the retail sector. These stimulus measures have broadly been viewed by investors as bullish prompting some to buy the dip on Lightspeed stock.
Lightspeed bears, on the other hand, still believe there is a significant element of risk in betting on a sharp economic rebound in high growth stocks. The growth at any price business models which have previously been supported by investors may be shunned once volatility rises again, and with upcoming earnings results so uncertain, bears note it is relatively impossible to predict with any degree of certainty what the future holds with any stock, let alone Lightspeed.
Invest wisely, my friends.
