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 $6.48 (Toronto symbol MCB; TSINetwork Rating: Speculative) (780-453-8451; www.mccoyglobal.com; Shares outstanding: 27.6 million; Market cap: $175.6 million; Dividend yield: 3.1%) is the new name of McCoy Corp.
The company changed its name after the recent sale of its Mobile Solutions heavy-duty truck-trailer unit to focus on its faster-growing and more profitable Energy Products and Services segment. This business 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.)
New global focus adds appeal
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The company changed its name after the recent sale of its Mobile Solutions heavy-duty truck-trailer unit to focus on its faster-growing and more profitable Energy Products and Services segment. This business 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.)
New global focus adds appeal
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WAJAX CORP. $35.12 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.8 million; Market cap: $586.4 million; Dividend yield: 6.8%) 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 March 31, 2014, Wajax’s revenue fell 1.5%, to $331.4 million from $336.3 million a year earlier. The decline mostly came from weakness in oil and gas and mining markets.
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The company’s customers are in the natural resource, construction, manufacturing and transportation industries.
In the three months ended March 31, 2014, Wajax’s revenue fell 1.5%, to $331.4 million from $336.3 million a year earlier. The decline mostly came from weakness in oil and gas and mining markets.
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CALIAN TECHNOLOGIES $19.92 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613-599-8600; www.calian.comtarget=”_blank”; Shares outstanding: 7.3 million; Market cap: $147.1 million; Yield: 5.6%) has acquired Ottawa-based DWP Solutions for an undisclosed amount.
DWP has been in business for 18 years and helps government and defence customers secure their computer networks. The company’s annual revenue is around $6 million. To put that in context, Calian reported $51.2 million of revenue in the latest quarter.
The purchase is small for Calian, but it will be a good fit with the company’s Business and Technology Services division, which supplies engineers, health care workers, information technology professionals and other personnel on a contract basis.
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DWP has been in business for 18 years and helps government and defence customers secure their computer networks. The company’s annual revenue is around $6 million. To put that in context, Calian reported $51.2 million of revenue in the latest quarter.
The purchase is small for Calian, but it will be a good fit with the company’s Business and Technology Services division, which supplies engineers, health care workers, information technology professionals and other personnel on a contract basis.
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SASOL LTD. (ADR) $60.80 (New York symbol SSL; TSINetwork Rating: Extra Risk) (082-883-9697; www.sasol.comtarget=”_blank”; ADRs outstanding: 650.5 million; Market cap: $40.5 billion; Dividend yield: 2.5%) has won its appeal to the European General Court to have a fine for its involvement in the European paraffin wax cartel reduced. The European Commission imposed the fine, for 318.2 million euros ($430.5 million U.S.), on Sasol in October 2008.
The company states that it was unaware of any price-fixing activities before the European Commission commenced its investigation into the European paraffin wax industry in April 2005.
It paid the fine in January 2009 but viewed it as excessive. The court has now cut the fine by 168.22 million euros, to 149.98 million euros.
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The company states that it was unaware of any price-fixing activities before the European Commission commenced its investigation into the European paraffin wax industry in April 2005.
It paid the fine in January 2009 but viewed it as excessive. The court has now cut the fine by 168.22 million euros, to 149.98 million euros.
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AIMIA INC. $18.95 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 173.9 million; Market cap: $3.3 billion; Dividend yield: 3.8%) owns and operates Aeroplan, Canada’s largest loyalty program, with over 4.8 million members who collect Aeroplan miles from participating companies. Members can exchange their miles for flights, car rentals, hotel rooms and merchandise.
The company’s members can now earn and redeem points for travel on Air India, the Indian government’s flagship carrier. That brings Aeroplan’s total number of airline partners to 32.
The agreement will give Aeroplan members more choice on routes connecting North America, Europe, Asia and Australia via India.
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The company’s members can now earn and redeem points for travel on Air India, the Indian government’s flagship carrier. That brings Aeroplan’s total number of airline partners to 32.
The agreement will give Aeroplan members more choice on routes connecting North America, Europe, Asia and Australia via India.
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AMAZON.COM $358.14 (Nasdaq symbol AMZN; TSINetwork Rating: Extra Risk) (206-266-1000; www.amazon.com; Shares outstanding: 460.2 million; Market cap: $166.1 billion; No dividends paid) has enticed Babik Parviz, a key director at Google’s secretive Google X labs, to join the company.
Parviz pioneered the development of Google Glass, a wearable computer that displays information on a small display attached to a pair of glasses. More recently, Parviz led the Google team working on contact lenses with embedded electronics.
Amazon recently introduced its long-awaited Amazon Fire smartphone, which features a screen that can display seemingly 3-D images without the need for special glasses. This new technology—called Dynamic Perspective—uses retina-tracking technology embedded in four front-facing infrared cameras to make some images appear to be 3-D, similar to a hologram.
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Parviz pioneered the development of Google Glass, a wearable computer that displays information on a small display attached to a pair of glasses. More recently, Parviz led the Google team working on contact lenses with embedded electronics.
Amazon recently introduced its long-awaited Amazon Fire smartphone, which features a screen that can display seemingly 3-D images without the need for special glasses. This new technology—called Dynamic Perspective—uses retina-tracking technology embedded in four front-facing infrared cameras to make some images appear to be 3-D, similar to a hologram.
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WESTJET $26.85 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493- 7853; www.westjet.com; Shares outstanding: 127.8 million; Market cap: $3.4 billion; Dividend yield: 1.8%) now plans to operate its own wide-body, twoaisle aircraft, starting in 2015.
The planes will offer greater range than its current fleet of Boeing 737s and let it compete with Air Canada on international routes.
WestJet aims to start with four wide-body planes, with the first flights going between Alberta and Hawaii during the winter season, beginning in late 2015. Right now, it is using two Boeing 757-200s operated by Thomas Cook for its Alberta-to-Hawaii winter service.
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The planes will offer greater range than its current fleet of Boeing 737s and let it compete with Air Canada on international routes.
WestJet aims to start with four wide-body planes, with the first flights going between Alberta and Hawaii during the winter season, beginning in late 2015. Right now, it is using two Boeing 757-200s operated by Thomas Cook for its Alberta-to-Hawaii winter service.
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DOMINO’S PIZZA $75.43 (New York symbol DPZ; TSINetwork Rating: Average) (734-930-3030; www.dominos.com; Shares outstanding: 55.6 million; Market cap: $4.2 billion; Dividend yield: 1.3%) is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 11,000 outlets in the U.S. and over 70 other countries. Franchisees run most of these stores. In the quarter ended June 15, 2014, the company’s earnings per share rose 17.5%, to $0.67 from $0.57 a year earlier. That beat the consensus estimate of $0.65. Sales gained 8.8%, to $450.5 million from $414.0 million also exceeding the consensus estimate of $441.3 million. Same-store sales rose 7.7% internationally and 5.4% in the U.S.
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WYNDHAM WORLDWIDE $76.55 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 127.3 million; Market cap: $9.8 billion; Dividend yield: 1.8%) is one of the world’s largest hospitality companies, with 7,500 franchised hotels worldwide.
Wyndham also manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has 107,000 vacation-rental properties in 100 countries.
In the three months ended June 30, 2014, the company’s revenue rose 7.2%, to $1.34 billion from $1.25 billion a year earlier. Wyndham gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up the company’s occupancy rate by 2.8%.
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Wyndham also manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has 107,000 vacation-rental properties in 100 countries.
In the three months ended June 30, 2014, the company’s revenue rose 7.2%, to $1.34 billion from $1.25 billion a year earlier. Wyndham gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up the company’s occupancy rate by 2.8%.
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ZARGON OIL & GAS $9.03 (Toronto symbol ZAR; TSINetwork Rating: Speculative) (403- 264-9992; www.zargon.ca; Shares outstanding: 30.1 million; Market cap: $270.9 million; Dividend yield: 8.0%) produces natural gas and oil in Alberta, Manitoba, Saskatchewan and North Dakota.
In the quarter ended March 31, 2014, the company produced 6,662 barrels of oil equivalent a day, down 12.9% from 7,648 a year earlier. That’s mainly because the company sold some less important properties.
The lower output was more than offset by higher oil and gas prices in the latest quarter, increasing Zargon’s cash flow per share by 10.9%, to $0.51 from $0.46.
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In the quarter ended March 31, 2014, the company produced 6,662 barrels of oil equivalent a day, down 12.9% from 7,648 a year earlier. That’s mainly because the company sold some less important properties.
The lower output was more than offset by higher oil and gas prices in the latest quarter, increasing Zargon’s cash flow per share by 10.9%, to $0.51 from $0.46.
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