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.
Read More
Close
GENERAL ELECTRIC CO. $26 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.2 billion; Market cap: $265.2 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.ge.com) continues to shrink its GE Capital subsidiary, which provides loans and other financial services to buyers of its industrial products, such as power-transmission gear, jet engines and locomotives.
GE Capital supplies around 30% of GE’s overall revenue and earnings. As part of a plan to focus on its main industrial businesses, the company aims to cut GE Capital’s assets to half of what they were prior to the 2008 financial crisis. It plans to complete these reductions by 2014.
Due to GE Capital’s smaller size, the company’s overall revenue in the three months ended September 30, 2013 fell 1.5%, to $35.7 billion from $36.3 billion a year earlier. Earnings fell 5.1%, to $3.3 billion from $3.5 billion a year earlier. Earnings per share fell 3.0%, to $0.32 from $0.33, on fewer shares outstanding. If you exclude unusual items, earnings per share rose 11.1%, to $0.40 from $0.36.
...
GE Capital supplies around 30% of GE’s overall revenue and earnings. As part of a plan to focus on its main industrial businesses, the company aims to cut GE Capital’s assets to half of what they were prior to the 2008 financial crisis. It plans to complete these reductions by 2014.
Due to GE Capital’s smaller size, the company’s overall revenue in the three months ended September 30, 2013 fell 1.5%, to $35.7 billion from $36.3 billion a year earlier. Earnings fell 5.1%, to $3.3 billion from $3.5 billion a year earlier. Earnings per share fell 3.0%, to $0.32 from $0.33, on fewer shares outstanding. If you exclude unusual items, earnings per share rose 11.1%, to $0.40 from $0.36.
...
UNITED TECHNOLOGIES CORP. $106 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 917.5 million; Market cap: $97.3 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.utc.com) has four main divisions: Building & Industrial Systems (formed in September 2013) makes heating and air-conditioning equipment under the Carrier brand, as well as burglar alarms, fire-safety products and Otis elevators (50% of 2012 revenue, 61% of earnings); Pratt & Whitney manufactures aircraft engines (24%, 19%); Aerospace Systems makes aircraft controls (14%, 11%); and Sikorsky makes helicopters (12%, 9%).
The recession cut United Technologies’revenue by 11.1%, from $56.8 billion in 2008 to $50.5 billion in 2009. Revenue quickly turned around and rose to $57.7 billion in 2012. The U.S. government is the company’s biggest customer and accounts for roughly 18% of its yearly revenue.
Earnings fell 17.0%, from $4.9 billion in 2008 to $4.1 billion in 2009. The company is an aggressive buyer of its own shares. As a result, its earnings per share fell at a slower pace of 15.6%, from $4.74 to $4.00. Thanks to the higher revenue, earnings improved to $5.2 billion, or $5.35 a share, in 2012.
...
The recession cut United Technologies’revenue by 11.1%, from $56.8 billion in 2008 to $50.5 billion in 2009. Revenue quickly turned around and rose to $57.7 billion in 2012. The U.S. government is the company’s biggest customer and accounts for roughly 18% of its yearly revenue.
Earnings fell 17.0%, from $4.9 billion in 2008 to $4.1 billion in 2009. The company is an aggressive buyer of its own shares. As a result, its earnings per share fell at a slower pace of 15.6%, from $4.74 to $4.00. Thanks to the higher revenue, earnings improved to $5.2 billion, or $5.35 a share, in 2012.
...
Pat McKeough responds to many requests from members of his Inner Circle for specific advice on 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 one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle....
ADOBE SYSTEMS (Nasdaq symbol ADBE; www.adobe.com) makes software that lets computer users create, edit and share documents in the popular PDF format. As well, graphic designers use its software to create print publications and web pages....
TEMPUR SEALY $39.81 (New York symbol TPX; TSINetwork Rating: Speculative) (800-878-8889; www.tempursealy.com; Shares outstanding: 60.4 million; Market cap: $2.4 billion; No dividends paid) completed its $1.3- billion purchase of rival Sealy in March 2013. This was a major acquisition for Tempur Sealy (formerly Tempur-Pedic), but it has let the company diversify into the market for traditional spring-coil beds.
The purchase should help Tempur Sealy offset rising competition in its current business; the company makes and distributes mattresses and neck pillows made of its Tempur material, which conforms to the body to provide support and alleviate pressure points.
Competitors Simmons Bedding and Serta have both successfully launched memory-foam mattresses that directly compete with Tempur Sealy’s products.
...
The purchase should help Tempur Sealy offset rising competition in its current business; the company makes and distributes mattresses and neck pillows made of its Tempur material, which conforms to the body to provide support and alleviate pressure points.
Competitors Simmons Bedding and Serta have both successfully launched memory-foam mattresses that directly compete with Tempur Sealy’s products.
...
WYNDHAM WORLDWIDE $62.75 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 133.0 million; Market cap: $8.3 billion; Dividend yield: 1.9%) is one of the world’s largest hospitality companies, with 7,410 franchised hotels worldwide.
In addition to hotels, Wyndham manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has over 106,000 vacation rental properties in 100 countries.
In the three months ended June 30, 2013, Wyndham’s revenue rose 10.0%, to $1.25 billion from $1.14 billion a year earlier. The company gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up its occupancy rate by 1.5%.
...
In addition to hotels, Wyndham manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has over 106,000 vacation rental properties in 100 countries.
In the three months ended June 30, 2013, Wyndham’s revenue rose 10.0%, to $1.25 billion from $1.14 billion a year earlier. The company gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up its occupancy rate by 1.5%.
...
SASOL LTD. (ADR) $50.56 (New York symbol SSL; TSINetwork Rating: Extra Risk) (082- 883-9697; www.sasol.com; ADRs outstanding: 649.2 million; Market cap: $34.4 billion; Dividend yield: 5.3%) has developed a technology to convert coal and natural gas into motor fuels and is now the world’s largest producer of fuel from coal at its facility in Secunda, South Africa.
In the year ended June 30, 2013, Sasol’s revenue rose 9.7%, to 146.8 billion South African rand (1 rand = $0.10 U.S.) from 133.8 billion rand the previous year. Earnings per ADR rose 24.5%, to 52.62 rand from 42.28 rand. The U.S. dollar rose against the rand, which pushed up the value of Sasol’s sales outside South Africa.
Sasol is considering spending up to $21 billion U.S. to build a complex in Louisiana that would turn natural gas into chemicals, diesel and other fuels.
...
In the year ended June 30, 2013, Sasol’s revenue rose 9.7%, to 146.8 billion South African rand (1 rand = $0.10 U.S.) from 133.8 billion rand the previous year. Earnings per ADR rose 24.5%, to 52.62 rand from 42.28 rand. The U.S. dollar rose against the rand, which pushed up the value of Sasol’s sales outside South Africa.
Sasol is considering spending up to $21 billion U.S. to build a complex in Louisiana that would turn natural gas into chemicals, diesel and other fuels.
...
GOODYEAR TIRE & RUBBER CO. $22.44 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 246.0 million; Market cap: $5.5 billion; Dividend yield: 0.9%) will resume paying dividends with a quarterly payment of $0.05 a share in December 2013. That gives the stock a 0.9% yield, based on today’s price. The company last paid a dividend in December 2002.
The tire maker has also announced a $100-million share buyback plan, which it will mainly use to offset any potential share dilution caused by equity compensation programs for its employees.
The company is selling more tires in emerging markets in Latin America and Asia, while cost cuts and falling rubber prices are helping boost its profits.
...
The tire maker has also announced a $100-million share buyback plan, which it will mainly use to offset any potential share dilution caused by equity compensation programs for its employees.
The company is selling more tires in emerging markets in Latin America and Asia, while cost cuts and falling rubber prices are helping boost its profits.
...
FIRSTSERVICE CORP. $41.59 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 31.9 million; Market cap: $1.4 billion; Dividend yield: 1.0%) is selling its 300- employee Field Asset Services subsidiary to Assurant Inc. for $55 million. This business specializes in preserving the value of foreclosed and abandoned homes by performing ongoing services, such as inspections, interior and exterior maintenance, trash removal, lawn maintenance and winterization.
FirstService bought Field Asset Services in 2007, and the business benefited from the housing crisis in the U.S., which saw many properties foreclosed and abandoned.
The sale is timely for FirstService, because increased U.S. government regulations are slowing the rate at which banks and other mortgage providers can foreclose on homeowners who are behind on their payments. Housing markets are also slowly recovering. As a result, there have been fewer newly foreclosed houses for Field Asset Services to manage.
...
FirstService bought Field Asset Services in 2007, and the business benefited from the housing crisis in the U.S., which saw many properties foreclosed and abandoned.
The sale is timely for FirstService, because increased U.S. government regulations are slowing the rate at which banks and other mortgage providers can foreclose on homeowners who are behind on their payments. Housing markets are also slowly recovering. As a result, there have been fewer newly foreclosed houses for Field Asset Services to manage.
...
THE CHURCHILL CORP. $8.87 (Toronto symbol CUQ; TSINetwork Rating: Speculative) (780-454-3667; www.churchillcorporation.com; Shares outstanding: 24.7 million; Market cap: $218.7 million; Dividend yield: 5.4%) provides building construction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to government and private sector clients, mainly in Western Canada.
Churchill’s Stuart Olson Dominion Construction division has just won $400 million worth of contracts. These projects involve building municipal, commercial and industrial buildings, as well as arenas, schools and hospitals.
To put these agreements in perspective, Churchill’s total backlog stood at a near record $1.8 billion on June 30, 2013.
...
Churchill’s Stuart Olson Dominion Construction division has just won $400 million worth of contracts. These projects involve building municipal, commercial and industrial buildings, as well as arenas, schools and hospitals.
To put these agreements in perspective, Churchill’s total backlog stood at a near record $1.8 billion on June 30, 2013.
...