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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CEDAR FAIR L.P. $43 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.6 million; Market cap: $2.4 billion; Price-to-sales ratio: 2.2; Dividend yield: 5.8%; TSINetwork Rating: Average; www.cedarfair.com) lost $1.95 a share in the first quarter of 2013, compared to a loss of $1.18 a year earlier. That’s mainly due to a one-time charge on the early retirement of debt. Cedar Fair typically loses money in the first quarter, as most of its 11 amusement parks and seven water parks close during the winter. However, revenue jumped 48.2%, to $41.8 million from $28.2 million, thanks to higher attendance and per-guest spending at its Knott’s Berry Farm year-round park in southern California.
The stock has gained 60% in the past year. However, that’s mainly due to its rising distributions, which could slow this year.
Cedar Fair is still a hold....
The stock has gained 60% in the past year. However, that’s mainly due to its rising distributions, which could slow this year.
Cedar Fair is still a hold....
PROCTER & GAMBLE CO. $79 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $213.3 billion; Price-to-sales ratio: 2.7; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.pg.com) recently raised its quarterly dividend by 7.0%, to $0.6015 a share from $0.562....
FORD MOTOR CO. $16 (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.9 billion; Market cap: $62.4 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.5%; TSINetwork Rating: Extra Risk; www.ford.com) continues to expand in China. It sold 75,331 vehicles in that country in April 2013, up 37% from April 2012. That’s mainly due to strong demand for its new Focus sub-compact car and several of its sport utility models.
The company plans to launch 15 new vehicles in China by 2015. It also aims to double its production capacity in China, to 1.2 million vehicles, by 2015.
Ford is a buy.
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The company plans to launch 15 new vehicles in China by 2015. It also aims to double its production capacity in China, to 1.2 million vehicles, by 2015.
Ford is a buy.
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ALCOA INC. $8.58 (New York symbol AA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.1 billion; Market cap: $9.4 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.4%; TSINetwork Rating: Average; www.alcoa.com) is looking at more ways to cut costs, as aluminum prices have dropped 33% from their 2011 peak.
In response to the lower prices, the company has already closed about 13% of its smelting capacity. It is now thinking about lowering its production by a further 11%. This should help it reach its goal of cutting its operating costs by around 10% by 2015.
Alcoa is a buy.
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In response to the lower prices, the company has already closed about 13% of its smelting capacity. It is now thinking about lowering its production by a further 11%. This should help it reach its goal of cutting its operating costs by around 10% by 2015.
Alcoa is a buy.
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GANNETT CO. INC. $22 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 229.6 million; Market cap: $5.1 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.6%; TSINetwork Rating: Average; www.gannett.com) earned $86.0 million in the first quarter of 2013. That’s up 6.5% from $80.8 million a year earlier. Earnings per share rose 8.8%, to $0.37 from $0.34, on fewer shares outstanding. Revenue climbed 1.6%, to $1.24 billion from $1.22 billion.
The company continues to benefit from its move to charge users for access to its newspapers’ websites: revenue from its Internet operations (which supply 15% of the total) rose 3.9%. It now has 50,000 digital subscribers and feels this will rise to 300,000 by 2014. However, weaker demand for print advertising cut revenue at Gannett’s newspaper division (69% of revenue) by 0.3%. Revenue from its 23 TV stations (16%) rose 8.7% due to higher retransmission fees from cable and satellite TV operators.
Gannett is a buy.
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The company continues to benefit from its move to charge users for access to its newspapers’ websites: revenue from its Internet operations (which supply 15% of the total) rose 3.9%. It now has 50,000 digital subscribers and feels this will rise to 300,000 by 2014. However, weaker demand for print advertising cut revenue at Gannett’s newspaper division (69% of revenue) by 0.3%. Revenue from its 23 TV stations (16%) rose 8.7% due to higher retransmission fees from cable and satellite TV operators.
Gannett is a buy.
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BHP BILLITON LTD. ADRs $66 (New York symbol BHP; Conservative Growth Portfolio, Resources sector; ADRs outstanding: 2.7 billion; Market cap: $178.2 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.5%; TSINetwork Rating: Average; www.bhpbilliton.com) plans to spend $18 billion developing new mines in the fiscal year ending June 30, 2014, down 18.2% from $22 billion in fiscal 2013. That’s because slowing economic growth in China has hurt prices for commodities like iron ore, copper and coal.
This spending should continue to fall in future years, because many of the projects that BHP is developing will start up in 2015.
BHP Billiton is a buy....
This spending should continue to fall in future years, because many of the projects that BHP is developing will start up in 2015.
BHP Billiton is a buy....
ARCHER DANIELS MIDLAND CO. $33 (New York symbol ADM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 658.8 million; Market cap: $21.7 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.adm.com) will pay $3.5 billion for the 80.2% of GrainCorp, a leading Australian grain-storage and shipping company, that it does not already own. Controlling all of GrainCorp will help Archer Daniels profit as Australia ships more grain and other crops to Asia. The deal should close by the end of 2013.
Meanwhile, Archer Daniels earned $269 million, or $0.41 a share, in the three months ended March 31, 2013. That’s down 32.6% from $399 million, or $0.60 a share, a year earlier. If you exclude writedowns and other unusual items, per-share earnings fell 38.5%, to $0.48 from $0.78.
Last year’s drought in the U.S. increased the prices that Archer Daniels’ food-processing operations paid for soybeans and other crops. That was the main reason for the lower earnings. However, revenue rose 2.7%, to $21.7 billion from $21.2 billion, as falling ethanol inventories helped increase prices.
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Meanwhile, Archer Daniels earned $269 million, or $0.41 a share, in the three months ended March 31, 2013. That’s down 32.6% from $399 million, or $0.60 a share, a year earlier. If you exclude writedowns and other unusual items, per-share earnings fell 38.5%, to $0.48 from $0.78.
Last year’s drought in the U.S. increased the prices that Archer Daniels’ food-processing operations paid for soybeans and other crops. That was the main reason for the lower earnings. However, revenue rose 2.7%, to $21.7 billion from $21.2 billion, as falling ethanol inventories helped increase prices.
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MONSANTO CO. $105 (New York symbol MON, Aggressive Growth Portfolio; Manufacturing & Industry sector; Shares outstanding: 533.8 million; Market cap: $56.0 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.4%; TSINetwork Rating: Above Average; www.monsanto.com) recently won a major patent-infringement lawsuit. The dispute arose after a farmer in Indiana, who grew soybeans using Monsanto’s herbicide-resistant seeds, used the resulting seeds for future crops instead of buying more.
Monsanto gets over 70% of its revenue by selling genetically modified seeds, so allowing farmers to replant these seeds would have significantly hurt the company’s prospects. The remaining 30% comes from pest- and weed-control products.
Meanwhile, Monsanto earned $1.5 billion, or $2.74 a share, in the three months ended February 28, 2013. That’s up 22.5% from $1.2 billion, or $2.24 a share, a year earlier. If you disregard unusual items, mainly costs to clean up contamination at a chemical plant in West Virginia, earnings per share would have risen 19.7%, to $2.73 from $2.28. Sales rose 15.2%, to $5.5 billion from $4.7 billion. That’s mainly due to strong sales of its corn seeds in Brazil.
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Monsanto gets over 70% of its revenue by selling genetically modified seeds, so allowing farmers to replant these seeds would have significantly hurt the company’s prospects. The remaining 30% comes from pest- and weed-control products.
Meanwhile, Monsanto earned $1.5 billion, or $2.74 a share, in the three months ended February 28, 2013. That’s up 22.5% from $1.2 billion, or $2.24 a share, a year earlier. If you disregard unusual items, mainly costs to clean up contamination at a chemical plant in West Virginia, earnings per share would have risen 19.7%, to $2.73 from $2.28. Sales rose 15.2%, to $5.5 billion from $4.7 billion. That’s mainly due to strong sales of its corn seeds in Brazil.
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CANON INC. ADRs $36 (New York symbol CAJ; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.2 billion; Market cap: $43.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www. canon.com) recently raised its revenue and earnings forecasts for 2013. However, that’s entirely due to the Bank of Japan’s recent moves to devalue the yen. The lower currency makes Canon’s printers, cameras and other products cheaper in other countries.
As well, more people are using their smartphone’s built-in camera to take pictures. That’s hurting sales of Canon’s low-priced compact cameras.
Canon is still a hold....
As well, more people are using their smartphone’s built-in camera to take pictures. That’s hurting sales of Canon’s low-priced compact cameras.
Canon is still a hold....
C.R. BARD INC. $104 (New York symbol BCR; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 80.5 million; Market cap: $8.4 billion; Price-to-sales ratio: 2.9; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.crbard.com) makes vascular products, such as stents and catheters; oncology products that detect and treat various types of cancer; urology products, such as drainage and incontinence devices; and surgical tools. Overseas markets supply a third of the company’s sales.
Bard recently agreed to pay $50.5 million to settle allegations that from 1998 to 2006 the company offered hospitals free equipment and other benefits if they used its cancer-treatment products.
If you exclude these costs, Bard’s earnings fell 13.5% in the first quarter of 2013, to $120.7 million from $139.5 million a year earlier. Earnings per share fell 10.6%, to $1.44 from $1.61, on fewer shares outstanding. However, sales rose 1.4%, to $740.3 million from $730.0 million. Bard spent 8.0% of its sales on research in the quarter, up from 6.6% a year earlier.
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Bard recently agreed to pay $50.5 million to settle allegations that from 1998 to 2006 the company offered hospitals free equipment and other benefits if they used its cancer-treatment products.
If you exclude these costs, Bard’s earnings fell 13.5% in the first quarter of 2013, to $120.7 million from $139.5 million a year earlier. Earnings per share fell 10.6%, to $1.44 from $1.61, on fewer shares outstanding. However, sales rose 1.4%, to $740.3 million from $730.0 million. Bard spent 8.0% of its sales on research in the quarter, up from 6.6% a year earlier.
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