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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YAMANA GOLD $5.01 (Toronto symbol YRI; TSINetwork Rating: Speculative)(416-815-0220; www.yamana.com; Shares outstanding: 880.8 million; Market cap: $4.6 billion; Dividend yield: 1.5%) has decided to go ahead with building a $398.0-million mine at its Cerro Moro gold and silver property in Argentina. Production could begin as soon as late 2017.
The mine will produce an average of 102,000 ounces of gold and 5.0 million ounces of silver over its eight-year life—and its lifespan could be extended with further exploration drilling.
Yamana Gold is still a buy.
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The mine will produce an average of 102,000 ounces of gold and 5.0 million ounces of silver over its eight-year life—and its lifespan could be extended with further exploration drilling.
Yamana Gold is still a buy.
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CARFINCO FINANCIAL $10.96 (Toronto symbol CFN; TSINetwork Rating: Speculative) (1-888-486-4356; www.carfinco.com; Shares outstanding: 26.5 million; Market cap: $281.1 million; Dividend yield: 2.7%) has rebounded closer to its takeover price of $11.25 a share after falling as low as $8.30 in January 2015.
In November 2014, Carfinco’s shareholders voted to accept a friendly $11.25-a-share takeover bid from Spain’s Banco Santander SA (ADR symbol SAN on New York).
Carfinco is confident the deal will go through, and the last two conditions were recently met: Spanish regulators granted their approval and Carfinco entered into an agreement to sell Persian Acceptance Corp., its U.S. subsidiary.
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In November 2014, Carfinco’s shareholders voted to accept a friendly $11.25-a-share takeover bid from Spain’s Banco Santander SA (ADR symbol SAN on New York).
Carfinco is confident the deal will go through, and the last two conditions were recently met: Spanish regulators granted their approval and Carfinco entered into an agreement to sell Persian Acceptance Corp., its U.S. subsidiary.
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INTACT FINANCIAL CORP. $90.64 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341- 1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $11.9 billion; Dividend yield: 2.3%) is expanding in Western Canada by purchasing Canadian Direct Insurance from Canadian Western Bank (symbol CWB on Toronto) for $197 million. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C.
The acquisition also lets Intact expand its higherprofit- margin direct-to-consumer distribution channel. Direct distribution lets consumers get initial online quotes at any time and then use extended call centre hours to speak with—and purchase policies from— licensed insurance representatives.
In conjunction with this purchase, Intact plans to merge its Grey Power brand into its belairdirect brand to reduce the number of banners it offers. However, it will continue to offer Grey Power’s discount rates to drivers over the age of 50.
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The acquisition also lets Intact expand its higherprofit- margin direct-to-consumer distribution channel. Direct distribution lets consumers get initial online quotes at any time and then use extended call centre hours to speak with—and purchase policies from— licensed insurance representatives.
In conjunction with this purchase, Intact plans to merge its Grey Power brand into its belairdirect brand to reduce the number of banners it offers. However, it will continue to offer Grey Power’s discount rates to drivers over the age of 50.
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WESTJET AIRLINES $30.63 (Toronto symbol WJA; TSINetwork Rating: Extra Risk)(1- 877-493-7853; www.westjet.com; Shares outstanding: 127.8 million; Market cap: $4.0 billion; Dividend yield: 1.8%) reports that its earnings per share jumped 34.6% in the three months ended December 31, 2014, to $0.70 from $0.52 a year earlier. Revenue rose 7.3%, to $994.4 million from $926.4 million.
Fuel makes up around a third of an airline’s operating expenses, and WestJet continues to benefit as its fuel costs drop along with oil prices.
The company is returning some of its higher profits to shareholders: it has just raised its quarterly dividend by 16.7% with the March 2015 payment, to $0.14 from $0.12. The stock now yields 1.8%.
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Fuel makes up around a third of an airline’s operating expenses, and WestJet continues to benefit as its fuel costs drop along with oil prices.
The company is returning some of its higher profits to shareholders: it has just raised its quarterly dividend by 16.7% with the March 2015 payment, to $0.14 from $0.12. The stock now yields 1.8%.
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CHIPOTLE MEXICAN GRILL $674.57 (New York symbol CMG; TSINetwork Rating: Speculative) (303- 595-4000; www.chipotle.com; Shares outstanding: 31.0 million; Market cap: $20.8 billion; No dividends paid) is a Denverbased Mexican restaurant chain. It charges slightly higher prices than fast food companies, but it offers better quality food, including naturally raised meat, and superior decor and service.
In the three months ended December 31, 2014, Chipotle’s sales jumped 26.7%, to $1.07 billion from $844.1 million a year earlier. Its restaurants attracted more customers during the quarter, which pushed up same-restaurant sales by 16.1%.
Chipotle opened 60 new outlets and now has a total of 1,783. It plans to add 190 to 205 more in 2015.
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In the three months ended December 31, 2014, Chipotle’s sales jumped 26.7%, to $1.07 billion from $844.1 million a year earlier. Its restaurants attracted more customers during the quarter, which pushed up same-restaurant sales by 16.1%.
Chipotle opened 60 new outlets and now has a total of 1,783. It plans to add 190 to 205 more in 2015.
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AMAZON.COM $373.37 (Nasdaq symbol AMZN; TSINetwork Rating: Extra Risk)(206-266-1000; www.amazon.com; Shares outstanding: 464.4 million; Market cap: $174.3 billion; No dividends paid) is a major online retailer. The company gets about 25% of its sales from books, music and videos. Other products, including electronics, computer games and toys, make up the other 75%. Amazon Marketplace lets other companies sell their products through Amazon’s websites.
In the three months ended December 31, 2014, Amazon earned $0.45 a share. That was down 11.8% from $0.51 a share a year earlier, but it was much better than the consensus estimate of $0.24. Sales rose 14.6%, to $29.3 billion from $25.6 billion.
In early 2014, the company raised the price of its Amazon Prime free-shipping service to $99 a year from $79. This was the first increase since Amazon launched Prime in 2005.
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In the three months ended December 31, 2014, Amazon earned $0.45 a share. That was down 11.8% from $0.51 a share a year earlier, but it was much better than the consensus estimate of $0.24. Sales rose 14.6%, to $29.3 billion from $25.6 billion.
In early 2014, the company raised the price of its Amazon Prime free-shipping service to $99 a year from $79. This was the first increase since Amazon launched Prime in 2005.
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IAMGOLD $2.90 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 376.9 million; Market cap: $1.0 billion; No dividends paid) now holds over $800 million U.S. of cash and gold bullion after the sale of its Niobec niobium mine in Quebec’s Saguenay-Lac-Saint-Jean region.
IAMGold received $500 million U.S. for the sale of Niobec. It will get another $30 million U.S. when an adjacent deposit of rare earth elements goes into production.
The company’s big cash and gold holding puts it in a strong position to pay down its long-term debt of $641 million U.S. It could also expand its existing gold projects, pay dividends, buy back shares or make timely acquisitions from distressed sellers at low prices.
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IAMGold received $500 million U.S. for the sale of Niobec. It will get another $30 million U.S. when an adjacent deposit of rare earth elements goes into production.
The company’s big cash and gold holding puts it in a strong position to pay down its long-term debt of $641 million U.S. It could also expand its existing gold projects, pay dividends, buy back shares or make timely acquisitions from distressed sellers at low prices.
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ALARMFORCE INDUSTRIES $10.08 (Toronto symbol AF; TSINetwork Rating: Speculative) (1-800- 267-2001; www.alarmforce.com; Shares outstanding: 11.7 million; Market cap: $121.1 million; Dividend yield: 1.2%) sells twoway voice-alarm systems and monitoring services in Canada and increasingly in the U.S.
In the three months ended October 31, 2014, the company’s sales rose 5.2%, to $13.3 million from $12.6 million a year earlier. It earned $0.17 a share, down 19.0% from $0.21.
AlarmForce’s revenue rose along with its subscriber base and higher monthly revenue per customer. Earnings declined because it spent more on product development and marketing.
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In the three months ended October 31, 2014, the company’s sales rose 5.2%, to $13.3 million from $12.6 million a year earlier. It earned $0.17 a share, down 19.0% from $0.21.
AlarmForce’s revenue rose along with its subscriber base and higher monthly revenue per customer. Earnings declined because it spent more on product development and marketing.
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RESTAURANT BRANDS INTERNATIONAL $40.97 (New York symbol QSR; TSINetwork Rating: Average) (212-333-3810; www.rbi.com; Shares outstanding: 467.1 million; Market cap: $19.1 billion; Dividend yield: 0.9%) took its current form on December 12, 2014, as a result of Burger King Worldwide’s (old symbol BKW) acquisition of Tim Hortons Inc. (old symbol THI).
Restaurant Brands is the world’s third-largest fastfood operator, after McDonald’s and Yum Brands, with 14,372 Burger King restaurants and 4,671 Tim Hortons outlets in 100 countries.
In the three months ended December 31, 2014, the company lost $514.2 million, or $2.52 a share, compared to a profit of $66.8 million, or $0.19 (all amounts except share price and market cap in U.S. dollars). Excluding merger-related costs and other unusual items, operating earnings rose 23.1%.
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Restaurant Brands is the world’s third-largest fastfood operator, after McDonald’s and Yum Brands, with 14,372 Burger King restaurants and 4,671 Tim Hortons outlets in 100 countries.
In the three months ended December 31, 2014, the company lost $514.2 million, or $2.52 a share, compared to a profit of $66.8 million, or $0.19 (all amounts except share price and market cap in U.S. dollars). Excluding merger-related costs and other unusual items, operating earnings rose 23.1%.
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BELLATRIX EXPLORATION $3.50 (Toronto symbol BXE; TSINetwork Rating: Speculative) (403-266-8670; www.bellatrixexploration.com; Shares outstanding: 191.5 million; Market cap: $735.5 million; No dividends paid) will cut its 2015 exploration and development spending by 33.3%, to $200 million from $300 million in 2014, in response to low oil and gas prices.
However, Bellatrix can still draw on $85 million from its joint venture partners, bringing total spending to $285 million this year.
As a result of the spending cut, the company now expects to produce an average of 43,000 to 44,000 barrels of oil equivalent a day in 2015. That’s down from its original forecast of 47,000 to 48,000 but about 14% higher than its 2014 average production of 38,100 barrels a day.
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However, Bellatrix can still draw on $85 million from its joint venture partners, bringing total spending to $285 million this year.
As a result of the spending cut, the company now expects to produce an average of 43,000 to 44,000 barrels of oil equivalent a day in 2015. That’s down from its original forecast of 47,000 to 48,000 but about 14% higher than its 2014 average production of 38,100 barrels a day.
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