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
JONES GROUP INC. $12(New York symbol JNY; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 80.0 million; Market cap: $960.0 million; Price-to-sales ratio: 0.3; Dividend yield: 1.7%; TSINetwork Rating: Average; www.jonesgroupinc.com) earned $42.9 million in the three months ended September 29, 2012. That’s up 10.0% from $39.0 million a year earlier. Earnings per share rose 18.8%, to $0.57 from $0.48, on fewer shares outstanding. That’s mainly because the company is doing a good job of cutting costs and controlling its inventories.
Sales fell 0.7%, to $1.03 billion from $1.04 billion. Jones gets half of its sales from department stores, which are seeing strong demand for the company’s shoes and jeans. However, sales at Jones’s own stores, which mainly focus on upscale brands, fell sharply as cost-conscious consumers shifted to discount retailers.
Jones Group is a hold.
Sales fell 0.7%, to $1.03 billion from $1.04 billion. Jones gets half of its sales from department stores, which are seeing strong demand for the company’s shoes and jeans. However, sales at Jones’s own stores, which mainly focus on upscale brands, fell sharply as cost-conscious consumers shifted to discount retailers.
Jones Group is a hold.
NVIDIA CORP. $12 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 624.9 million; Market cap: $7.5 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.5%; TSINetwork Rating: Average; www.nvidia.com) has developed a new handheld video game system. Called the Shield, this device features a 5-inch, high-definition touch screen that plays games designed for Google’s Android mobile operating system. Users can also wirelessly stream games from their computers to the Shield.
Nvidia normally designs chips for other manufacturers, so making its own device adds risk. However, the Shield should help it profit from the growth of mobile gaming. As well, developers already make games for Android, so Nvidia can focus solely on hardware. That gives it an advantage over competitors like Sony and Nintendo, which must convince programmers to make games specifically for their systems.
Nvidia is a buy....
Nvidia normally designs chips for other manufacturers, so making its own device adds risk. However, the Shield should help it profit from the growth of mobile gaming. As well, developers already make games for Android, so Nvidia can focus solely on hardware. That gives it an advantage over competitors like Sony and Nintendo, which must convince programmers to make games specifically for their systems.
Nvidia is a buy....
AGILENT TECHNOLOGIES INC. $44 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 347.9 million; Market cap: $15.3 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.1%; TSINetwork Rating: Average; www. agilent.com) makes testing systems that help electronics companies improve their products. It also manufactures testing equipment for medical research labs.
Agilent recently raised its quarterly dividend by 20.0%, to $0.12 a share from $0.10. The new annual rate of $0.48 yields 1.1%. As well, the company will buy back up to $500 million of its shares in the fiscal year ending October 31, 2013. That’s equal to 3% of its market cap. These repurchases will reduce the dilution caused by shares it will issue under its employee stock option plan.
Agilent is a buy.
...
Agilent recently raised its quarterly dividend by 20.0%, to $0.12 a share from $0.10. The new annual rate of $0.48 yields 1.1%. As well, the company will buy back up to $500 million of its shares in the fiscal year ending October 31, 2013. That’s equal to 3% of its market cap. These repurchases will reduce the dilution caused by shares it will issue under its employee stock option plan.
Agilent is a buy.
...
C.R. BARD INC. $102 (New York symbol BCR; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 82.3 million; Market cap: $8.4 billion; Price-to-sales ratio: 2.8; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www. crbard.com) sued W.L. Gore & Associates Inc., the maker of Gore-Tex fabrics, for violating its patents in 2007.
Bard and Gore both make medical stents using a Teflon-like material called ePTFE. Lower courts have previously ruled that Bard held the rights to ePTFE. However, Gore continued to make its products using this substance.
In 2009, an Arizona court ordered Gore to pay Bard $185 million. With interest, royalties and fees, that award is now worth over $900 million, or 11% of Bard’s market cap. The U.S. Supreme Court has refused to hear Gore’s appeal. That increases the likelihood that Bard will receive at least part of this award.
...
Bard and Gore both make medical stents using a Teflon-like material called ePTFE. Lower courts have previously ruled that Bard held the rights to ePTFE. However, Gore continued to make its products using this substance.
In 2009, an Arizona court ordered Gore to pay Bard $185 million. With interest, royalties and fees, that award is now worth over $900 million, or 11% of Bard’s market cap. The U.S. Supreme Court has refused to hear Gore’s appeal. That increases the likelihood that Bard will receive at least part of this award.
...
MOODY’S CORP. $54 (New York symbol MCO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 222.9 million; Market cap: $12.0 billion; Price-to-sales ratio: 4.7; Dividend yield: 1.5%; TSINetwork Rating: Average; www.moodys.com) has raised its quarterly dividend by 25.0%, to $0.20 a share from $0.16. The new annual rate of $0.80 yields 1.5%.
New regulations could force Moody’s to change the way it rates bonds and other securities. That could increase the company’s costs. However, the new rules would also apply to its competitors.
Moody’s should earn $3.25 a share in 2013, up from its likely 2012 earnings of $2.99. The stock trades at 16.6 times this year’s estimate.
...
New regulations could force Moody’s to change the way it rates bonds and other securities. That could increase the company’s costs. However, the new rules would also apply to its competitors.
Moody’s should earn $3.25 a share in 2013, up from its likely 2012 earnings of $2.99. The stock trades at 16.6 times this year’s estimate.
...
FRONTIER COMMUNICATIONS CORP. $4.55 (Nasdaq symbol FTR; Income Portfolio, Utilities sector; Shares outstanding: 998.4 million; Market cap: $4.5 billion; Price-to-sales ratio: 0.9; Dividend yield: 8.8%; TSINetwork Rating: Average; www.frontier.com) sells phone, Internet and video services to 4.9 million customers in 27 states.
In July 2010, the company purchased Verizon’s telephone businesses in 14 states. In return, Verizon shareholders received 0.24 shares of Frontier for each Verizon share they held.
In the quarter ended September 30, 2012, Frontier’s earnings jumped 228.5% to $67.0 million, or $0.07 a share. A year earlier, it earned $20.4 million, or $0.02 a share. Even if you disregard unusual items, earnings per share would have risen 40.0%. That’s partly because Frontier is selling more Internet and video services. However, it continues to lose traditional phone customers to wireless providers. That’s why its revenue fell 3.0%, to $1.25 billion from $1.3 billion.
...
In July 2010, the company purchased Verizon’s telephone businesses in 14 states. In return, Verizon shareholders received 0.24 shares of Frontier for each Verizon share they held.
In the quarter ended September 30, 2012, Frontier’s earnings jumped 228.5% to $67.0 million, or $0.07 a share. A year earlier, it earned $20.4 million, or $0.02 a share. Even if you disregard unusual items, earnings per share would have risen 40.0%. That’s partly because Frontier is selling more Internet and video services. However, it continues to lose traditional phone customers to wireless providers. That’s why its revenue fell 3.0%, to $1.25 billion from $1.3 billion.
...
WINDSTREAM CORP. $9.69 (Nasdaq symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 588.1 million; Market cap: $5.7 billion; Price-to-sales ratio: 1.0; Dividend yield: 10.3%; TSINetwork Rating: Average; www.windstream.com) provides telephone and other communication services to 4.2 million clients, mainly in rural areas.
In 2006, Alltel merged its telephone business with Valor Communications, which then changed its name to Windstream. Alltel investors received 1.0339267 Windstream shares for each share they held.
In November 2011, Windstream acquired PAETEC Holding Corp., which sells telecommunication services to businesses in 46 states. Windstream issued $842 million in stock to PAETEC shareholders. It also assumed $1.6 billion of PAETEC’s debt.
...
In 2006, Alltel merged its telephone business with Valor Communications, which then changed its name to Windstream. Alltel investors received 1.0339267 Windstream shares for each share they held.
In November 2011, Windstream acquired PAETEC Holding Corp., which sells telecommunication services to businesses in 46 states. Windstream issued $842 million in stock to PAETEC shareholders. It also assumed $1.6 billion of PAETEC’s debt.
...
ARCHER DANIELS MIDLAND CO. $29 (New York symbol ADM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 658.6 million; Market cap: $19.1 billion; Price-to-sales ratio: 0.2; Dividend yield: 2.4%; TSINetwork Rating: Above Average; www.adm.com) processes corn, wheat, soybeans, canola, flax seed, peanuts, cocoa and other crops into a variety of food ingredients, such as flour, oils and sweeteners. It is also the largest maker of ethanol from corn in the U.S.
In its fiscal 2013 first quarter, which ended September 30, 2012, the company earned $182 million, or $0.28 a share. That’s down 60.4% from $460 million, or $0.68 a share, a year earlier. Lower profits from its ethanol business offset higher earnings from its oilseeds operations. Revenue fell 0.4%, to $21.8 billion from $21.9 billion.
The latest earnings included a $146-million writedown of its investment in a Mexican maker of corn flour and tortillas. Without this charge and other unusual items, the company would have earned $0.50 a share in the latest quarter, down 13.8% from $0.58 a year earlier.
...
In its fiscal 2013 first quarter, which ended September 30, 2012, the company earned $182 million, or $0.28 a share. That’s down 60.4% from $460 million, or $0.68 a share, a year earlier. Lower profits from its ethanol business offset higher earnings from its oilseeds operations. Revenue fell 0.4%, to $21.8 billion from $21.9 billion.
The latest earnings included a $146-million writedown of its investment in a Mexican maker of corn flour and tortillas. Without this charge and other unusual items, the company would have earned $0.50 a share in the latest quarter, down 13.8% from $0.58 a year earlier.
...
WELLS FARGO & CO. $35 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 5.3 billion; Market cap: $185.5 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.5%; TSINetwork Rating: Average; www.wellsfargo.com) earned a record $18.9 billion, or $3.36 a share, in 2012. That’s up 19.1% from $15.9 billion, or $2.82 a share, in 2011.
The bank continues to do a good job of adjusting the terms of troubled loans it acquired when it bought rival banking firm Wachovia in 2008. In 2012, it set aside $7.2 billion to cover bad loans, down 8.6% from $7.9 billion in 2011.
Revenue rose 6.4%, to $86.1 billion from $80.9 billion. Low interest rates continue to encourage businesses and consumers to take out loans. The wealth management division is also attracting more clients. However, the bank is paying out higher interest rates to attract more depositors. That’s hurting its profitability.
...
The bank continues to do a good job of adjusting the terms of troubled loans it acquired when it bought rival banking firm Wachovia in 2008. In 2012, it set aside $7.2 billion to cover bad loans, down 8.6% from $7.9 billion in 2011.
Revenue rose 6.4%, to $86.1 billion from $80.9 billion. Low interest rates continue to encourage businesses and consumers to take out loans. The wealth management division is also attracting more clients. However, the bank is paying out higher interest rates to attract more depositors. That’s hurting its profitability.
...
EBAY INC. $53 (Nasdaq symbol EBAY; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $68.9 billion; Priceto- sales ratio: 4.9; No dividends paid; TSINetwork Rating: Above Average; www.ebay.com) gets 53% of its revenue by charging users fees to sell goods on its shopping websites, including its main auction site, which it launched in September 1995. This site now has 112.3 million users.
eBay gets a further 40% of its revenue from processing online transactions, mostly through its wholly owned PayPal subsidiary. This business now has 122.7 million users and connects to over 15,000 financial institutions.
...
eBay gets a further 40% of its revenue from processing online transactions, mostly through its wholly owned PayPal subsidiary. This business now has 122.7 million users and connects to over 15,000 financial institutions.
...