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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MCCOY GLOBAL $3.71 (Toronto symbol MCB; TSINetwork Rating: Speculative)(780-453-8451; www.mccoyglobal.com; Shares outstanding: 27.7 million; Market cap: $102.7 million; Dividend yield: 5.4%) sold its heavy-duty truck-trailer unit last year and is now focused on its Energy Products and Services segment, which sells hydraulic gear, including power tongs, for drilling rigs worldwide. (Power tongs are large wrench-like tools that tighten and loosen the pipe in the drill hole.)
In 2013, this division opened its first two international sales and service centres. One is in Aberdeen, Scotland, and supports customers in the North Sea area. The other is in Singapore and serves clients in the Asia-Pacific region. McCoy recently opened another centre, in Dubai, to supply the Middle East.
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In 2013, this division opened its first two international sales and service centres. One is in Aberdeen, Scotland, and supports customers in the North Sea area. The other is in Singapore and serves clients in the Asia-Pacific region. McCoy recently opened another centre, in Dubai, to supply the Middle East.
Global client base lowers risk
WAJAX CORP. $24.10 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.8 million; Market cap: $404.4 million; Dividend yield: 4.2%) sells and services cranes, forklifts and other heavy equipment. It also provides related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions).
The company’s customers are in the natural resource, construction, manufacturing and transportation industries.
In the three months ended December 31, 2014, Wajax’s revenue fell 1.4%, to $386.1 million from $391.7 million a year earlier. The decline was mostly due to lower sales to mining companies and oil and gas customers.
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The company’s customers are in the natural resource, construction, manufacturing and transportation industries.
In the three months ended December 31, 2014, Wajax’s revenue fell 1.4%, to $386.1 million from $391.7 million a year earlier. The decline was mostly due to lower sales to mining companies and oil and gas customers.
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RUSSEL METALS $24.16 (Toronto symbol RUS; TSINetwork Rating: Speculative)(905- 819-7777; www.russelmetals.com; Shares outstanding: 61.7 million; Market cap: $1.5 billion; Dividend yield: 6.3%) reported stronger results in the latest quarter.
In the three months ended December 31, 2014, Russel’s revenue rose 24.9%, to $1.01 billion from $811.1 million a year earlier.
Earnings gained 36.4%, to $31.1 million, or $0.50 a share. A year earlier, the company earned $22.8 million, or $0.37. Russel has invested in new plants and processing equipment in the past three years, which has cut its costs and improved its efficiency. That’s paying off with higher profit margins.
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In the three months ended December 31, 2014, Russel’s revenue rose 24.9%, to $1.01 billion from $811.1 million a year earlier.
Earnings gained 36.4%, to $31.1 million, or $0.50 a share. A year earlier, the company earned $22.8 million, or $0.37. Russel has invested in new plants and processing equipment in the past three years, which has cut its costs and improved its efficiency. That’s paying off with higher profit margins.
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NISSAN MOTOR (ADR) $21.20 (Nasdaq symbol NSANY; TSINetwork Rating: Above Average) (310-771- 3111; www.nissan-global.com; Shares outstanding: 2.3 billion; Market cap: $48.1 billion; Dividend yield: 2.8%) is Japan’s second-largest automaker, after Toyota.
The company’s sales declined 45% in Russia in February 2015, to 9,447 vehicles. Mass-market brands like Nissan and GM were down the most among automakers in a month that saw overall Russian car and truck sales plunge 38%, to 128,298.
The decline was the result of the weakening Russian economy and the sharply lower ruble. Overall, Russian vehicle sales were down just 10% in 2014, but volumes were helped by a surge in December sales from Russians buying vehicles to make the most of their rapidly devaluing rubles.
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The company’s sales declined 45% in Russia in February 2015, to 9,447 vehicles. Mass-market brands like Nissan and GM were down the most among automakers in a month that saw overall Russian car and truck sales plunge 38%, to 128,298.
The decline was the result of the weakening Russian economy and the sharply lower ruble. Overall, Russian vehicle sales were down just 10% in 2014, but volumes were helped by a surge in December sales from Russians buying vehicles to make the most of their rapidly devaluing rubles.
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CALIAN TECHNOLOGIES $18.50 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613- 599-8600; www.calian.com; Shares outstanding: 7.4 million; Market cap: $136.1 million; Dividend yield: 6.1%) operates in two areas: the Business and Technology Services division (70% of revenue) supplies engineers, health care workers and other professionals on a contract basis. The Systems Engineering division (30%) sells hardware and software for testing and operating satellite and other communication systems.
In the three months ended December 31, 2014, Calian’s revenue rose 8.1%, to $56.0 million from $51.8 million a year earlier.
Even with the higher revenue, earnings fell 1.4%, to $2.74 million, or $0.37 a share, from $2.78 million, or $0.38. That was mostly because Calian added workers to fulfill new contracts.
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In the three months ended December 31, 2014, Calian’s revenue rose 8.1%, to $56.0 million from $51.8 million a year earlier.
Even with the higher revenue, earnings fell 1.4%, to $2.74 million, or $0.37 a share, from $2.78 million, or $0.38. That was mostly because Calian added workers to fulfill new contracts.
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LEON’S FURNITURE $15.50 (Toronto symbol LNF; TSINetwork Rating: Average)(416-243-7880; www.leons.ca; Shares outstanding: 71.1 million; Market cap: $1.1 billion; Dividend yield: 2.6%) reported sales of $649.4 million in the three months ended December 31, 2014. That’s up 2.5% from revenue of $633.8 million a year earlier.
Earnings gained 11.4%, to $29.9 million, or $0.38 a share. A year earlier, Leon’s earned $26.3 million, or $0.34 a share. Earnings rose more than sales because the company sold more high-profit-margin furniture rather than appliances and electronics.
Leon’s is a buy.
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Earnings gained 11.4%, to $29.9 million, or $0.38 a share. A year earlier, Leon’s earned $26.3 million, or $0.34 a share. Earnings rose more than sales because the company sold more high-profit-margin furniture rather than appliances and electronics.
Leon’s is a buy.
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WESTJET AIRLINES $30.27 (Toronto symbol WJA; TSINetwork Rating: Extra Risk)(1- 877-493-7853; www.westjet.com; Shares outstanding: 127.8 million; Market cap: $3.9 billion; Dividend yield: 1.9%) has taken delivery of its first Boeing 767 wide-body aircraft and says the plane will begin flights between Alberta and Hawaii in December 2015.
WestJet has ordered three more 767s for delivery later this year. The bigger planes will offer greater range than the company’s current fleet of Boeing 737s and let it compete with Air Canada on international routes.
Right now, WestJet flies to Dublin, Ireland, at the maximum range of its 737s. The new 767s will let it serve additional European cities, as well as South America or Asia.
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WestJet has ordered three more 767s for delivery later this year. The bigger planes will offer greater range than the company’s current fleet of Boeing 737s and let it compete with Air Canada on international routes.
Right now, WestJet flies to Dublin, Ireland, at the maximum range of its 737s. The new 767s will let it serve additional European cities, as well as South America or Asia.
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DOMINO’S PIZZA $102.17 (New York symbol DPZ; TSINetwork Rating: Average)(734-930-3030; www.dominos.com; Shares outstanding: 55.6 million; Market cap: $5.7 billion; Dividend yield: 1.2%) is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 11,600 outlets in the U.S. and over 75 other countries. Franchisees run most of these stores.
In the three months ended December 28, 2014, the company’s earnings per share jumped 16.7%, to $0.91 from $0.78 a year earlier.
Overall sales gained 13.5%, to $643.0 million from $566.5 million. Same-store sales rose 6.1% internationally, but more important, they increased 11.1% in the U.S., which is home to most of the company’s stores.
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In the three months ended December 28, 2014, the company’s earnings per share jumped 16.7%, to $0.91 from $0.78 a year earlier.
Overall sales gained 13.5%, to $643.0 million from $566.5 million. Same-store sales rose 6.1% internationally, but more important, they increased 11.1% in the U.S., which is home to most of the company’s stores.
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GOODYEAR TIRE & RUBBER CO. $26.05 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 269.6 million; Market cap: $7.0 billion; Dividend yield: 0.9%) is the world’s largest tire maker, with 52 plants in 22 countries.
In the three months ended December 31, 2014, Goodyear’s sales fell 9.1%, to $4.36 billion from $4.80 billion a year earlier. The rising U.S. dollar hurt the contribution of foreign sales, and Europe experienced one of the warmest winters on record, cutting winter tire demand.
Excluding one-time items, earnings fell 20.6%, to $166.0 million, or $0.59 a share, but that was still ahead of the consensus estimate of $0.58. A year earlier, Goodyear earned $209.0 million, or $0.74 a share.
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In the three months ended December 31, 2014, Goodyear’s sales fell 9.1%, to $4.36 billion from $4.80 billion a year earlier. The rising U.S. dollar hurt the contribution of foreign sales, and Europe experienced one of the warmest winters on record, cutting winter tire demand.
Excluding one-time items, earnings fell 20.6%, to $166.0 million, or $0.59 a share, but that was still ahead of the consensus estimate of $0.58. A year earlier, Goodyear earned $209.0 million, or $0.74 a share.
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SASOL LTD. (ADR) $33.44 (New York symbol SSL; TSINetwork Rating: Extra Risk)(082- 883-9697; www.sasol.com; ADRs outstanding: 650.9 million; Market cap: $21.6 billion; Dividend yield: 3.4%) is a South Africa-based company that converts coal and natural gas into motor fuels, produces oil and gas and mines coal.
In its fiscal 2015 first half, which ended December 31, 2014, Sasol’s sales rose 1.6%, to 99.8 billion South African rand from 98.2 billion rand a year earlier (1 rand = $0.1099 U.S.). Earnings per ADR gained 6.0%, to 32.00 rand from 30.19. The U.S. dollar rose against the rand, increasing the value of Sasol’s foreign sales. That offset a 19% decline in realized oil prices.
Despite the improved results, Sasol now plans to bring in an aggressive plan to conserve cash, including layoffs, lower spending on oil and gas exploration and development, and a 12.5% dividend cut. The ADRs yield 3.4%, based on the lower rate.
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In its fiscal 2015 first half, which ended December 31, 2014, Sasol’s sales rose 1.6%, to 99.8 billion South African rand from 98.2 billion rand a year earlier (1 rand = $0.1099 U.S.). Earnings per ADR gained 6.0%, to 32.00 rand from 30.19. The U.S. dollar rose against the rand, increasing the value of Sasol’s foreign sales. That offset a 19% decline in realized oil prices.
Despite the improved results, Sasol now plans to bring in an aggressive plan to conserve cash, including layoffs, lower spending on oil and gas exploration and development, and a 12.5% dividend cut. The ADRs yield 3.4%, based on the lower rate.
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