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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TIM HORTONS $88.70 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 132.8 million; Market cap: $11.8 billion; Dividend yield: 1.4%) has accepted a friendly takeover offer from Burger King Worldwide (New York symbol BKW).
Tim Hortons shareholders can opt to receive $88.50 a share in cash or 3.0879 Burger King shares (currently worth $105.54).
Burger King will limit the overall cash payout, so most investors will likely receive $65.50 in cash and 0.8025 of a share, for a total value of $90.54.
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Tim Hortons shareholders can opt to receive $88.50 a share in cash or 3.0879 Burger King shares (currently worth $105.54).
Burger King will limit the overall cash payout, so most investors will likely receive $65.50 in cash and 0.8025 of a share, for a total value of $90.54.
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CHEMTRADE LOGISTICS INCOME FUND $20.95 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics.com; Units outstanding: 60.2 million; Market cap: $1.3 billion; Dividend yield: 5.7%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and basemetal processors. These companies create by-products like sulphur and acid, which Chemtrade turns into useful chemicals like sulphuric acid.
In the three months ended June 30, 2014, Chemtrade’s revenue rose 30.4%, to $318.1 million from $217.5 million a year earlier.
The gain was largely due to General Chemical Corp., which Chemtrade bought for $860.9 million U.S. in January 2014. General makes a range of chemicals, including aluminum sulphate, aluminum chlorohydrate and ferric sulphate (all of which are used in water treatment), as well as ingredients for prescription drugs, nutritional supplements and veterinary products.
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In the three months ended June 30, 2014, Chemtrade’s revenue rose 30.4%, to $318.1 million from $217.5 million a year earlier.
The gain was largely due to General Chemical Corp., which Chemtrade bought for $860.9 million U.S. in January 2014. General makes a range of chemicals, including aluminum sulphate, aluminum chlorohydrate and ferric sulphate (all of which are used in water treatment), as well as ingredients for prescription drugs, nutritional supplements and veterinary products.
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Symantec rises with successful restructuring plan
Pat McKeough responds to many requests from members of his Inner Circle for advice on specific stocks, as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week we offer you a report on one of the stocks profiled in these Q&A sessions. Beginning this week, we give you Pat’s buy-hold-sell recommendation as well as his analysis of the stock. This is part of our new approach offering you regular and specific buy, hold and sell advice in our daily posts. Every week you’ll get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday, and “Our Top U.S. Stocks” on Thursday. This week we had a question from an Inner Circle member about one of the lesser-known tech stocks that makes it money by supplying an essential component to the giants of the industry. InvenSense makes chips that track motion, and its clients include such well-known names as Amazon. Samsung and Google. Now it appears that Apple will become a key customer. Pat examines the details of the projected deal with Apple and its impact on the company’s prospects. Q: Hi Pat: I was wondering, what are your thoughts on InvenSense? Thanks....
Every Thursday we bring you “Best U.S. Stocks.” You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about, from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster. MOTOROLA SOLUTIONS INC. (New York symbol MSI; www.motorolasolutions.com) took its current form on January 4, 2011, when the old Motorola Inc. spun off its struggling cellphone business, Motorola Mobility, as a separate firm. The remaining operations became Motorola Solutions after the breakup. The company makes specialized communications equipment, such as radios for police and fire vehicles. Government clients account for about 70% of its revenue....
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice on a wide range of topics, including strategies for international stock markets. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Foreign investments can give your portfolio greater strength and diversity and we recommend three ways you can do this with less risk.” We believe most investors could benefit from holding some foreign investments in their portfolios for added diversification. And growing markets like China and India have positive long-term outlooks. Their populations are generally younger than those in North America, and rising incomes are helping more of them advance into the middle class....
AMERICAN EXPRESS CO. $89 (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.0 billion; Market cap: $89.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.2%; TSINetwork Rating: Average; www. americanexpress.comtarget=”_blank”) started up in 1850 and is now one of the world’s largest issuers of payment cards, with 109.9 million cards outstanding in over 130 countries. Billionaire investor Warren Buffett owns 14.3% of the company.
Amex issues two types of cards: charge cards, which have no preset spending limit and must be paid in full each month; and traditional credit cards, which let users carry a balance.
High-quality clientele cuts risk
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Amex issues two types of cards: charge cards, which have no preset spending limit and must be paid in full each month; and traditional credit cards, which let users carry a balance.
High-quality clientele cuts risk
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PROCTER & GAMBLE CO. $83 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $224.1 billion; Price-to-sales ratio: 2.9; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.pg.comtarget=”_blank”) plans to sell just over half of its brands over the next two years.
That will let the company focus on its 70 to 80 most popular products, which together account for over 90% of its sales. These include 25 global brands, such as Head & Shoulders shampoo, Gillette razors, Tide detergent and Pampers diapers, that each generate over $1 billion in annual sales.
Meanwhile, Procter’s sales rose 0.6% in its 2014 fiscal year, which ended June 30, 2014, to $83.1 billion from $82.6 billion in fiscal 2013. Higher sales volumes (up 3%) and selling prices (up 1%) offset the negative impacts of currency exchange rates (down 2%) and low-margin products (down 1%). Before writedowns and unusual items, earnings rose 5.0%, to $4.22 a share from $4.02.
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That will let the company focus on its 70 to 80 most popular products, which together account for over 90% of its sales. These include 25 global brands, such as Head & Shoulders shampoo, Gillette razors, Tide detergent and Pampers diapers, that each generate over $1 billion in annual sales.
Meanwhile, Procter’s sales rose 0.6% in its 2014 fiscal year, which ended June 30, 2014, to $83.1 billion from $82.6 billion in fiscal 2013. Higher sales volumes (up 3%) and selling prices (up 1%) offset the negative impacts of currency exchange rates (down 2%) and low-margin products (down 1%). Before writedowns and unusual items, earnings rose 5.0%, to $4.22 a share from $4.02.
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FAIR ISAAC CORP. $57 (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 32.2 million; Market cap: $1.8 billion; Price-to-sales ratio: 2.7; Dividend yield: 0.1%; TSINetwork Rating: Average; www.fico.com) makes FICO Scores, a computer program that helps businesses make better decisions about customer creditworthiness.
The company recently repurchased $150.0 million of its shares under a buyback plan that ended in July 2014. Under its new authorization, it can buy back up to $250.0 million of shares. That’s equal to 14% of its market cap. There is no time limit for these buybacks.
Fair Isaac is a hold.
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The company recently repurchased $150.0 million of its shares under a buyback plan that ended in July 2014. Under its new authorization, it can buy back up to $250.0 million of shares. That’s equal to 14% of its market cap. There is no time limit for these buybacks.
Fair Isaac is a hold.
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ABB LTD. ADRs $23 (New York symbol ABB; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 2.3 billion; Market cap: $52.9 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.abb.com) makes transformers, transmission systems and circuit breakers for electrical utilities. The Switzerland-based firm also produces automation systems and robotics that industrial clients use to improve their productivity.
The company has developed new technology that will let its cables transmit up to 2,600 megawatts of electricity. That’s more than double what today’s highvoltage lines can carry. Demand for these new cables should be strong, particularly from operators of offshore wind farms and oil and gas drilling platforms.
ABB is a buy.
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The company has developed new technology that will let its cables transmit up to 2,600 megawatts of electricity. That’s more than double what today’s highvoltage lines can carry. Demand for these new cables should be strong, particularly from operators of offshore wind farms and oil and gas drilling platforms.
ABB is a buy.
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