DOREL INDUSTRIES $39.05 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.3 billion; Dividend yield: 3.5%) makes a range of items, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational goods, mainly bicycles.

Dorel has grown quickly over the last 10 years, with revenue doubling from $1.2 billion in 2003 to $2.4 billion in 2013 (all figures except share price and market cap in U.S. dollars). This period included two big acquisitions: France’s Ampa Group for $240 million in 2003 and Dorel’s 2004 purchase of Pacific Cycle for $310 million.

In late 2013, Dorel acquired 70% of money-losing Caloi, a major Brazilian bike maker, for $73.0 million. It has now integrated Caloi’s production from its big plant in Manaus, Brazil into its distribution and sales network to the point that it’s now adding to Dorel’s profits.

In late 2014, it bought Hong Kong-based Lerado Group, a maker of baby strollers and infant car seats, for $120 million. Lerado has growth potential because the growing middle class in Asia is paying closer attention to infant safety. China and India have now mandated infant car seats, and those laws could soon spread to other Asian countries.

Acquisitions are riskier than internal growth, but Dorel has chosen acquisitions that give it an advantage in growing but competitive markets where economies of scale are key. As well, big customers like Wal-Mart and Toy R Us increasingly favour large suppliers offering broad product lines.

The stock trades at just 8.8 times Dorel’s forecast 2015 earnings of $3.61 a share. It yields 3.5%.

Dorel Industries is our #1 buy for 2015.