Growth Stocks
Although growth stock picks can be highly volatile, they can make good long-term investments. They may be well-known stars or quiet gems, but they do share one common attribute—they are growing at a higher-than-average rate within their industry, or within the market as a whole, and could keep growing for years or decades.
And keep in mind that we focus on growth stocks, which have a good long-term history and favourable prospects. We downplay momentum stocks that tend to attract many investors simply because they are moving faster than the market averages, but are liable to fall sharply when their momentum fades.
There’s room for growth stock investing in your portfolio, but make sure you follow our TSI Network three-part Successful Investor strategy for your overall portfolio:
- Invest mainly in well-established companies;
- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
- Downplay or avoid stocks in the broker/media limelight.
Make better stock picks when you read this FREE Special Report, Canadian Growth Stocks: WestJet Stock, RioCan Stock and More.
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NISSAN MOTOR (ADR) $21.01 (Nasdaq symbol NSANY; TSINetwork Rating: Above Average) (310-771-3111; www.nissan-global.com; Shares outstanding 2.3 billion; Market cap: $47.7 billion; Dividend yield: 2.8%) is Japan’s secondlargest automaker, after Toyota.
In April 2015, the company sold a record 109,848 vehicles in the U.S., up 5.7% from April 2014. However, that missed the consensus forecast of a 7.7% gain.
Truck sales (44% of the total) rose 23.1%, thanks to new models such as its updated Rogue (up 44.5%) and Murano (up 72.9%) sport utility vehicles.
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In April 2015, the company sold a record 109,848 vehicles in the U.S., up 5.7% from April 2014. However, that missed the consensus forecast of a 7.7% gain.
Truck sales (44% of the total) rose 23.1%, thanks to new models such as its updated Rogue (up 44.5%) and Murano (up 72.9%) sport utility vehicles.
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YAMANA GOLD $4.67 (Toronto symbol YRI; TSINetwork Rating: Speculative)(416-815-0220; www.yamana.com; Shares outstanding: 941.5 million; Market cap: $4.4 billion; Dividend yield: 1.6%) owns eight operating gold mines in Mexico, Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina and has a number of other properties in advanced stages of development.
In the three months ended March 31, 2015, the company’s gold production rose 33.5%, to 304,874 ounces from 228,370 a year earlier. That was mainly due to its 50% stake in the Canadian Malartic gold mine in Quebec, which it purchased last year; this mine contributed 67,894 ounces to Yamana’s latest quarterly output.
The higher production helped offset a 6.4% decline in gold prices. As a result, Yamana’s cash flow rose 2.2%, to $96.0 million from $93.9 million. However, cash flow per share fell 8.3%, to $0.11 from $0.12, on more shares outstanding.
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In the three months ended March 31, 2015, the company’s gold production rose 33.5%, to 304,874 ounces from 228,370 a year earlier. That was mainly due to its 50% stake in the Canadian Malartic gold mine in Quebec, which it purchased last year; this mine contributed 67,894 ounces to Yamana’s latest quarterly output.
The higher production helped offset a 6.4% decline in gold prices. As a result, Yamana’s cash flow rose 2.2%, to $96.0 million from $93.9 million. However, cash flow per share fell 8.3%, to $0.11 from $0.12, on more shares outstanding.
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NEW GOLD $3.86 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 508.9 million; Market cap: $2.1 billion; No dividends paid) has four mines: the Mesquite project in the U.S., Cerro San Pedro in Mexico, the Peak mine in Australia and the New Afton mine in B.C.
New Gold also owns 30% of the El Morro copper/ gold project in Chile, 100% of the Blackwater property in B.C. and 100% of Ontario’s Rainy River project.
In the three months ended March 31, 2015, the company’s cash flow per share fell 27.8%, to $0.13 from $0.18 a year earlier. Gold production rose 4.0%, to 94,977 ounces from 91,317, but an 11.2% fall in copper output from New Afton, along with lower realized gold prices, cut New Gold’s cash flow.
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New Gold also owns 30% of the El Morro copper/ gold project in Chile, 100% of the Blackwater property in B.C. and 100% of Ontario’s Rainy River project.
In the three months ended March 31, 2015, the company’s cash flow per share fell 27.8%, to $0.13 from $0.18 a year earlier. Gold production rose 4.0%, to 94,977 ounces from 91,317, but an 11.2% fall in copper output from New Afton, along with lower realized gold prices, cut New Gold’s cash flow.
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CAMECO CORP. $19.24 (Toronto symbol CCO; TSINetwork Rating: Extra Risk)(306- 956-6200; www.cameco.com; Shares outstanding: 395.8 million; Market cap: $7.8 billion; Dividend yield 2.1%) reports that its per-share profits doubled in the three months ended March 31, 2015, to $0.18 from $0.09 a year earlier.
Revenue rose 35.0%, to $565.8 million from $419.2 million. Uranium sales volumes rose 1.4%, while prices in Canadian dollars gained 4.3%.
Uranium’s outlook is improving: China is building 23 nuclear reactors and Japan plans to restart some of its facilities after the 2011 tsunami damaged the Fukushima nuclear plant.
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Revenue rose 35.0%, to $565.8 million from $419.2 million. Uranium sales volumes rose 1.4%, while prices in Canadian dollars gained 4.3%.
Uranium’s outlook is improving: China is building 23 nuclear reactors and Japan plans to restart some of its facilities after the 2011 tsunami damaged the Fukushima nuclear plant.
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CIMAREX ENERGY $116.31 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 87.7 million; Market cap: $10.1 billion; Dividend yield: 0.6%) produces and explores for natural gas and oil. Gas makes up 69% of the company’s output; the remaining 31% is oil.
Cimarex’s properties are mostly in the Wolfcamp shale area of the Permian Basin in Texas and New Mexico, as well as the Cana-Woodford shale region in western Oklahoma.
In the three months ended March 31, 2015, Cimarex’s production averaged 946.7 million cubic feet of natural gas equivalent a day, up 27.9% from 740.4 million cubic feet a year earlier.
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Cimarex’s properties are mostly in the Wolfcamp shale area of the Permian Basin in Texas and New Mexico, as well as the Cana-Woodford shale region in western Oklahoma.
In the three months ended March 31, 2015, Cimarex’s production averaged 946.7 million cubic feet of natural gas equivalent a day, up 27.9% from 740.4 million cubic feet a year earlier.
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DEVON ENERGY CORP. $65.82 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235- 3611; www.dvn.com; Shares outstanding: 411.0 million; Market cap: $26.6 billion; Dividend yield: 1.5%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 40% gas and 60% oil.
The company narrowed its focus with its July 2014 sale of some of its properties to Linn Energy for $2.3 billion. The deal included holdings in the Rockies, the onshore Gulf Coast and the Mid-Continent region (which includes Oklahoma, Kansas and Texas).
The sale lets Devon focus on what it views as lowrisk/ high-reward properties, especially the oilproducing assets it bought in Texas’s Eagle Ford shale formation for $6 billion in 2013.
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The company narrowed its focus with its July 2014 sale of some of its properties to Linn Energy for $2.3 billion. The deal included holdings in the Rockies, the onshore Gulf Coast and the Mid-Continent region (which includes Oklahoma, Kansas and Texas).
The sale lets Devon focus on what it views as lowrisk/ high-reward properties, especially the oilproducing assets it bought in Texas’s Eagle Ford shale formation for $6 billion in 2013.
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FAIR ISAAC CORP. $88.07 (New York symbol FICO; TSINetwork Rating: Average)(415-472-2211; www.fairisaac.com; Shares outstanding: 31.1 million; Market cap: $2.7 billion; Dividend yield: 0.1%) makes FICO Scores, the program that dominates the market for software businesses use to evaluate customer creditworthiness. Fair Isaac also profits by selling programs that help credit card issuers control fraud and analyze cardholders’ spending patterns.
In its fiscal 2015 second quarter, which ended March 31, 2015, Fair Isaac’s revenue rose 11.7%, to $207.1 million from $185.5 million a year earlier. The company saw higher sales at its applications division (65% of total revenue) on increased licensing revenue from software that detects bank fraud. Sales of credit scoring software and programs for analyzing large amounts of a business’s data were up 4%.
The company earned $18.9 million, down 9.1% from $20.8 million. It spent more on research and marketing, and that hurt its profits. Earnings per share were unchanged at $0.60 on fewer shares outstanding.
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In its fiscal 2015 second quarter, which ended March 31, 2015, Fair Isaac’s revenue rose 11.7%, to $207.1 million from $185.5 million a year earlier. The company saw higher sales at its applications division (65% of total revenue) on increased licensing revenue from software that detects bank fraud. Sales of credit scoring software and programs for analyzing large amounts of a business’s data were up 4%.
The company earned $18.9 million, down 9.1% from $20.8 million. It spent more on research and marketing, and that hurt its profits. Earnings per share were unchanged at $0.60 on fewer shares outstanding.
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BROADRIDGE FINANCIAL SOLUTIONS $55.54 New York symbol BR; TSINetwork Rating: Average) (201-714-3000; www.broadridge.com; Shares outstanding: 120.9 million; Market cap: $6.5 billion; Dividend yield: 2.0%) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. The company processes 90% of all proxy votes in the U.S. and Canada.
Without one-time items, Broadridge earned $58.8 million, or $0.47 a share, in its fiscal 2015 third quarter, which ended March 31, 2015. That’s up 6.7% from $55.1 million, or $0.44 a share, a year earlier. The company continues to add new clients and is doing a good job of holding on to existing ones.
Broadridge typically makes about half of its profits in its fiscal fourth quarter, which ends June 30. That’s the busiest period for processing proxies and annual reports for its clients.
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Without one-time items, Broadridge earned $58.8 million, or $0.47 a share, in its fiscal 2015 third quarter, which ended March 31, 2015. That’s up 6.7% from $55.1 million, or $0.44 a share, a year earlier. The company continues to add new clients and is doing a good job of holding on to existing ones.
Broadridge typically makes about half of its profits in its fiscal fourth quarter, which ends June 30. That’s the busiest period for processing proxies and annual reports for its clients.
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GOODYEAR TIRE & RUBBER $31.26 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330- 796-2122; www.goodyear.com; Shares outstanding: 269.8 million; Market cap: $8.4 billion; Dividend yield: 0.8%) is the world’s largest tire maker, with 52 plants in 22 countries.
In the quarter ended March 31, 2015, Goodyear’s sales fell 10.0%, to $4.02 billion from $4.47 billion a year earlier. The rising U.S. dollar lowered the value of the company’s foreign sales.
Excluding one-time items, earnings per share fell 3.6%, to $0.54 from $0.56, but that was much better than the consensus estimate of $0.44. Record North American earnings let Goodyear offset the effects of the higher U.S. dollar.
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In the quarter ended March 31, 2015, Goodyear’s sales fell 10.0%, to $4.02 billion from $4.47 billion a year earlier. The rising U.S. dollar lowered the value of the company’s foreign sales.
Excluding one-time items, earnings per share fell 3.6%, to $0.54 from $0.56, but that was much better than the consensus estimate of $0.44. Record North American earnings let Goodyear offset the effects of the higher U.S. dollar.
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INTACT FINANCIAL $89.80 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $11.8 billion; Dividend yield: 2.4%) is Canada’s largest provider of property and casualty insurance. Its brands include Intact Insurance, Canada BrokerLink and belairdirect.
In the three months ended March 31, 2015, Intact’s revenue rose 5.3%, to $1.57 billion from $1.50 billion a year earlier. The company earned $186 million, or $1.37 a share, up 44.2% from $129 million, or $0.94.
The latest results reflect a $64-million reduction in catastrophic losses, mostly related to weather. That helped Intact report an improved combined ratio, or claims paid out divided by premiums taken in (the lower, the better) of 93.4%, down from 97.1%.
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In the three months ended March 31, 2015, Intact’s revenue rose 5.3%, to $1.57 billion from $1.50 billion a year earlier. The company earned $186 million, or $1.37 a share, up 44.2% from $129 million, or $0.94.
The latest results reflect a $64-million reduction in catastrophic losses, mostly related to weather. That helped Intact report an improved combined ratio, or claims paid out divided by premiums taken in (the lower, the better) of 93.4%, down from 97.1%.
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