The stock was down 55% from its highs despite the business accelerating
In the turbulent early months of 2022, as rising interest rates and geopolitical conflict unsettled markets, a contrarian thesis emerged: that fear had driven certain stocks far below their true worth. Two Canadian companies — Nuvei, a payment processor whose fundamentals remained strong despite a 55% decline from recent highs, and Spartan Delta, an energy producer whose profits had surged nearly tenfold — stood as emblems of a broader question investors have always faced: whether to trust the numbers when the mood of the market says otherwise. The spring of 2022 became, for those willing to look past the noise, a test of patience and conviction.
- Markets were in retreat — climbing interest rates, a war in Europe, and relentless bearish sentiment had pushed many quality stocks to deeply discounted levels by mid-March 2022.
- Nuvei's stock had collapsed 55% from its September peak despite posting 83% revenue growth and nearly doubling its quarterly payment volumes to $31.5 billion.
- Spartan Delta's acquisition of Velvet Energy transformed its scale overnight, sending annual revenues from $96 million to $608 million and net profit up 939% in a single year.
- A JPMorgan strategist broke from the consensus gloom, arguing that inflation would peak and geopolitical tensions would ease sooner than feared — opening a window for a spring rally.
- Both stocks were gathering momentum: Nuvei jumped 13% on earnings and another 10% on a crypto partnership, while Spartan Delta rode surging global oil prices toward a well-positioned 2022.
The stock market had been punishing investors for months when, in mid-March 2022, a JPMorgan strategist made a quiet but consequential argument: the doom was overdone. Inflation would likely peak. The war in Ukraine, however devastating, would not drag markets down indefinitely. For investors willing to act on that contrarian logic, two Canadian stocks offered compelling entry points.
Nuvei, listed on both the Toronto Stock Exchange and Nasdaq, had endured a brutal fall from grace. After surging nearly 300% in the prior year, the payment processor's stock slid 55% from its September highs — not because the business had faltered, but because the broader technology selloff swept it along. The underlying numbers told a different story: fourth-quarter revenue rose 83%, adjusted EBITDA climbed 78%, and total payment volumes approached $31.5 billion. Management projected continued growth of 30 to 35% for the year ahead. When those results were published, the stock jumped 13%. A subsequent partnership with cryptocurrency infrastructure firm Ledger pushed it another 10% higher — and still it remained well below its former peak.
Spartan Delta, headquartered in Calgary, was operating in an entirely different environment. The company's August 2021 acquisition of Velvet Energy for $743 million reshaped its scale, and the fourth quarter was the first full period to reflect that transformation. Daily production rose 178% to over 72,000 barrels of oil equivalent. Free cash flow surged 664%. For the full year, revenues leapt from $96 million to $608 million, with net profit in the final quarter alone reaching $128 million — a 939% increase. Global crude prices, already at their highest since 2014, climbed further as the Russian invasion of Ukraine tightened supply. Spartan Delta was positioned to benefit from every dimension of that environment.
Together, the two stocks embodied a single thesis: that market pessimism had created real opportunity. One company had been punished despite its strength; the other was riding structural forces that showed no sign of reversing. Whether investors would trust that logic — or wait for the uncertainty to clear — was the defining question of that particular spring.
The stock market had been punishing investors for months. Interest rates were climbing. Russia had invaded Ukraine. Analysts were issuing warnings that felt almost theatrical in their gloom. But in mid-March 2022, a JPMorgan strategist made a contrarian call: ignore the doom. Prepare instead for a spring rally. The reasoning was straightforward—inflation would likely peak, and the geopolitical crisis wouldn't drag on as long as the headlines suggested. That optimism, it turned out, had merit. And it opened a window for investors willing to buy stocks that had been hammered down to bargain prices.
Nuvei, a payment processor trading on both the Toronto and Nasdaq exchanges, was one such opportunity. The company had experienced a dizzying ride. Twelve months earlier, its stock had surged nearly 300 percent. Then September arrived, and like much of the technology sector, Nuvei began a sharp descent. By spring, the stock was trading 55 percent below those September peaks. But the company's fundamentals hadn't deteriorated. In the fourth quarter, revenue climbed 83 percent year over year, while adjusted EBITDA—a measure of operational profitability—jumped 78 percent. The payment volumes processed by the company had nearly doubled, reaching $31.5 billion for the quarter. Management was confident enough to project 30 to 35 percent revenue growth for the full year ahead, with adjusted EBITDA expanding between 28 and 34 percent. The company was winning market share in a competitive space, acquiring new customers, and building new products. When the fourth-quarter results landed, investors responded with a 13 percent jump in the stock price. Then came another catalyst: Nuvei announced a partnership with Ledger, a cryptocurrency infrastructure company, and the stock climbed another 10 percent. Yet even with those gains, the stock remained deeply discounted from where it had traded just months before.
Spartan Delta, a Calgary-based oil and gas producer, was riding a different wave entirely. The company had closed a major acquisition in August 2021—buying Velvet Energy for $743 million—and the fourth quarter of 2021 was the first full period to reflect that deal's impact. The results were striking. Daily production jumped 178 percent year over year to 72,428 barrels of oil equivalent. Free cash flow soared 664 percent to $21.3 million. For the full year 2021, revenues exploded from $96 million in 2020 to $608 million, with the fourth quarter alone generating $296 million in oil and gas sales. Net profit in that final quarter reached $128.46 million, a 939 percent increase from the prior year. Earnings per share came in at $0.84, quadruple the year-ago figure. The company had positioned itself well, with nearly $1 billion in targeted acquisitions on the horizon and a clear strategy for organic growth.
The timing for an energy company couldn't have been better. Global crude oil prices had climbed to their highest levels since 2014, driven by tight supplies and resurgent demand. The Russian invasion of Ukraine only tightened the market further, pushing prices higher still. Spartan Delta had guided for average production between 68,500 and 72,500 barrels of oil equivalent per day in 2022, with capital expenditures of roughly $330 million. The company was well-positioned to capitalize on the elevated price environment.
Both stocks, then, represented a thesis: that the market's pessimism had created genuine opportunity. Nuvei had been punished despite strong growth and market-share gains. Spartan Delta was benefiting from forces—tight energy supplies, geopolitical disruption—that showed no sign of reversing quickly. If the JPMorgan analyst was right, and spring brought a rally as inflation peaked and tensions eased, both companies had room to run. The question for investors was whether to trust the contrarian call or wait for more certainty. History would soon provide an answer.
Notable Quotes
Inflation could peak and heightened tensions between Russia and Ukraine won't last as long as some might think— JPMorgan analyst
Spartan's fourth-quarter and year-end results show effective and highly profitable organic development and expansion of its operations— Spartan Delta management
The Hearth Conversation Another angle on the story
Why does a payment processor like Nuvei matter to investors right now, when the whole tech sector is under pressure?
Because the market is conflating two different things. Yes, tech stocks are down broadly. But Nuvei's actual business—processing payments—is growing at 83 percent. They're winning customers and market share in a space that's only getting more important. The stock price fell because investors panicked, not because the company broke.
And Spartan Delta—that's just riding the oil price wave, isn't it? That seems fragile.
Partly, yes. But look at what they actually built. They acquired Velvet Energy and integrated it. Their production more than doubled. Their profit nearly dectupled. That's not just price—that's operational execution. And yes, oil prices are high because of Russia and Ukraine, but that's not going away tomorrow.
So the bet is that both stocks are cheap right now because the market is scared.
Exactly. Nuvei is down 55 percent from its highs even though the business is accelerating. Spartan Delta is benefiting from high prices, but the market hasn't fully repriced what the company can do with that cash flow. Both look like they're trading below what they're actually worth.
What could go wrong?
For Nuvei, a tech recession could slow customer acquisition. For Spartan Delta, oil prices could collapse if the geopolitical situation resolves quickly or demand weakens. But the analyst making this call thinks neither of those things happens. He thinks inflation peaks and tensions ease—which would actually help both companies keep growing without the market being in full panic mode.
So this is a bet on the analyst being right about the spring rally.
It is. But it's also a bet that these two companies are genuinely undervalued right now, independent of what happens next. That's the real edge.