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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< strong>IMPERIAL METALS $14.25 (Toronto symbol III; TSINetwork Rating: Speculative) (604-669-8959; www.imperialmetals.com; Shares outstanding: 74.5 million; Market cap: $1.1 billion) is a Vancouver-based firm that produces and explores for base and precious metals.
< br /> Imperial’s producing assets include two B.C. mines: 100%-owned Mount Polley (copper and gold) and 50% of Huckleberry (copper and molybdenum). Japan’s Mitsubishi Materials holds 31.1% of Huckleberry, and Furukawa Co., Dowa Holdings and Marubeni Corp. own 6.3% each.
< br /> Imperial restarted Mount Polley in 2005. It continues to explore around the known deposit to increase the mine’s reserves and lengthen its life. Right now, Imperial expects Mount Polley to produce until mid- 2023.
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< br /> Imperial’s producing assets include two B.C. mines: 100%-owned Mount Polley (copper and gold) and 50% of Huckleberry (copper and molybdenum). Japan’s Mitsubishi Materials holds 31.1% of Huckleberry, and Furukawa Co., Dowa Holdings and Marubeni Corp. own 6.3% each.
< br /> Imperial restarted Mount Polley in 2005. It continues to explore around the known deposit to increase the mine’s reserves and lengthen its life. Right now, Imperial expects Mount Polley to produce until mid- 2023.
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YAMANA GOLD $9.46 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.- yamana.com; Shares outstanding: 752.9 million; Market cap: $7.3 billion; Dividend yield: 2.9%) 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.
< br /> In the three months ended September 30, 2013, Yamana’s revenue fell 25.4%, to $456.7 million from $611.8 million a year earlier (all figures except share price and market cap in U.S. dollars).
< br /> Gold production declined 1.1%, to 306,935 ounces from 310,490. Prices for gold, and for copper and silver, also fell. Both copper and silver are significant byproducts of Yamana’s gold mining. The company’s cash flow per share fell 36.9% in the latest quarter, to $0.24 from $0.38.
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< br /> In the three months ended September 30, 2013, Yamana’s revenue fell 25.4%, to $456.7 million from $611.8 million a year earlier (all figures except share price and market cap in U.S. dollars).
< br /> Gold production declined 1.1%, to 306,935 ounces from 310,490. Prices for gold, and for copper and silver, also fell. Both copper and silver are significant byproducts of Yamana’s gold mining. The company’s cash flow per share fell 36.9% in the latest quarter, to $0.24 from $0.38.
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ALIMENTATION COUCHE-TARD $73.50 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $13.6 billion; Dividend yield: 0.5%) operates 6,198 convenience stores throughout North America. The Canadian outlets operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand.
< br /> In Europe, Couche-Tard operates 2,287 stores across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic states (Estonia, Latvia and Lithuania) and Russia.
< br /> In the three months ended July 21, 2013, Couche-Tard’s sales jumped 48.0%, to $8.9 billion from $6.0 billion a year earlier. The gain mostly came from Norway’s Statoil Fuel & Retail chain of European gas stations, which Couche-Tard bought for $2.7 billion in June 2012 (all figures except share price in U.S. dollars). The company also sold more fuel, and expanded its merchandise sales.
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< br /> In Europe, Couche-Tard operates 2,287 stores across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic states (Estonia, Latvia and Lithuania) and Russia.
< br /> In the three months ended July 21, 2013, Couche-Tard’s sales jumped 48.0%, to $8.9 billion from $6.0 billion a year earlier. The gain mostly came from Norway’s Statoil Fuel & Retail chain of European gas stations, which Couche-Tard bought for $2.7 billion in June 2012 (all figures except share price in U.S. dollars). The company also sold more fuel, and expanded its merchandise sales.
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HEWLETT-PACKARD CO. (New York symbol HPQ; www.hp.com) is a leading maker of personal computers and printers. It also makes server computers and networking products for businesses....
PHILIPS ELECTRONICS N.V. ADRs $33 (New York symbol PHG; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 913.9 million; Market cap: $30.2 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.0%; TSINetwork Rating: Average; www.philips.com) gets 43% of its revenue by making health care products, such as X-ray and magnetic resonance imaging (MRI) scanners. It also makes lighting (37% of revenue) and consumer electronics, such as appliances (20%).
In the quarter ended June 30, 2013, revenue rose 1.5%, to 5.65 billion euros from 5.57 billion euros a year earlier (1 euro = $1.40 Canadian). Philips earned 317 million euros, or 0.35 euros per ADR (each American Depositary Receipt represents one Philips common share). That’s up sharply from 102 million euros, or 0.11 euros per ADR, a year ago.
If you exclude restructuring costs and other unusual items, gross profits as a percentage of revenue improved to 9.4% from 7.3%.
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In the quarter ended June 30, 2013, revenue rose 1.5%, to 5.65 billion euros from 5.57 billion euros a year earlier (1 euro = $1.40 Canadian). Philips earned 317 million euros, or 0.35 euros per ADR (each American Depositary Receipt represents one Philips common share). That’s up sharply from 102 million euros, or 0.11 euros per ADR, a year ago.
If you exclude restructuring costs and other unusual items, gross profits as a percentage of revenue improved to 9.4% from 7.3%.
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KRAFT FOODS GROUP INC. $54 (Nasdaq symbol KRFT; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 595.6 million; Market cap: $32.2 billion; Price-to-sales ratio: 1.8; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.kraftfoodsgroup.com) makes a variety of grocery products, including Kraft macaroni and cheese, Oscar Mayer meats, Philadelphia cream cheese, Maxwell House coffee, Jell-O desserts and Miracle Whip salad dressing.
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WELLS FARGO & CO. $43 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 5.3 billion; Market cap: $227.9 billion; Price-to-sales ratio: 2.7; Dividend yield: 2.8%; TSINetwork Rating: Average; www.wellsfargo.com) earned $5.3 billion, or $0.99 a share, in the quarter ended September 30, 2013. That’s up 12.7% from $4.7 billion, or $0.88 a share, a year ago.
These gains are largely the result of more borrowers repaying their loans on time. Loan-loss provisions fell 95.3%, to $75 million from $1.6 billion.
Revenue declined 3.5%, to $20.5 billion from $21.2 billion. Higher interest rates have hurt demand for new mortgages and refinancing of existing loans. Mortgage applications dropped 40.4%, to $87 billion from $146 billion a year earlier.
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These gains are largely the result of more borrowers repaying their loans on time. Loan-loss provisions fell 95.3%, to $75 million from $1.6 billion.
Revenue declined 3.5%, to $20.5 billion from $21.2 billion. Higher interest rates have hurt demand for new mortgages and refinancing of existing loans. Mortgage applications dropped 40.4%, to $87 billion from $146 billion a year earlier.
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APACHE CORP. $89 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 389.4 million; Market cap: $34.7 billion; Price-to-sales ratio: 2.1; Dividend yield: 0.9%; TSINetwork Rating: Average; www.apachecorp.com) has stopped looking for oil and gas off the coast of Kenya, because it has been unable to find enough to justify developing these fields.
The company now plans to focus on its onshore projects in North America, which should account for 55% of its production in 2013, up from 31% in 2009. That should cut Apache’s risk.
Apache is still a hold....
The company now plans to focus on its onshore projects in North America, which should account for 55% of its production in 2013, up from 31% in 2009. That should cut Apache’s risk.
Apache is still a hold....
AMEREN CORP. $36 (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 242.6 million; Market cap: $8.7 billion; Priceto- sales ratio: 1.3; Dividend yield: 4.5%; TSINetwork Rating: Average; www.ameren.com) has received approval from federal regulators to sell five of its nonregulated coal-fired power plants in Illinois to Dynegy Inc. (New York symbol DYN).
Weak power demand and lower rates have hurt these plants’profits. As a result, Ameren will receive no cash for them. However, Dynegy will assume $825 million of their debt.
Regulators in Illinois have also let Ameren put off installing new pollution-control equipment in these plants until 2020. However, Dynegy may cancel the deal if regulators force it to make these upgrades sooner.
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Weak power demand and lower rates have hurt these plants’profits. As a result, Ameren will receive no cash for them. However, Dynegy will assume $825 million of their debt.
Regulators in Illinois have also let Ameren put off installing new pollution-control equipment in these plants until 2020. However, Dynegy may cancel the deal if regulators force it to make these upgrades sooner.
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FEDEX CORP. $130 (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 316.6 million; Market cap: $41.2 billion; Price-to-sales ratio: 0.9; Dividend yield: 0.5%; TSINetwork Rating: Average; www.fedex.com) has announced a new share buyback program that lets it repurchase up to 32 million of its common shares. If you include the 7.4 million shares left under its old plan, the company can now buy back up to 39.4 million shares, or 12.4% of the total outstanding.
Share buybacks raise earnings per share and other per-share calculations and give the remaining shareholders a larger stake in the company. There are no time limits for these purchases.
The company’s customers continue to shift to slower but cheaper forms of transportation, such as trucks and ships, instead of its more expensive overnight international air service. However, more of its clients are ordering goods online, which has pushed up volumes at its ground delivery division.
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Share buybacks raise earnings per share and other per-share calculations and give the remaining shareholders a larger stake in the company. There are no time limits for these purchases.
The company’s customers continue to shift to slower but cheaper forms of transportation, such as trucks and ships, instead of its more expensive overnight international air service. However, more of its clients are ordering goods online, which has pushed up volumes at its ground delivery division.
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