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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CGI GROUP INC. (Toronto symbol GIB.A; www.cgi.com) is Canada’s largest provider of computer outsourcing services. CGI helps its clients automate routine functions, like accounting and buying supplies. That makes them more efficient and lets them focus on their main businesses.
CGI was our #1 stock pick for 2010 and 2011. In the past few years, the company has used acquisitions to expand outside of Canada. For example, it recently paid $2.7 billion for Logica plc, a U.K.-based firm that provides computer outsourcing services in 36 countries.
Thanks to purchases like this, CGI is more geographically diversified: it now gets 47% of its revenue from the U.S., 36% from Canada and 17% from the rest of the world.
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CGI was our #1 stock pick for 2010 and 2011. In the past few years, the company has used acquisitions to expand outside of Canada. For example, it recently paid $2.7 billion for Logica plc, a U.K.-based firm that provides computer outsourcing services in 36 countries.
Thanks to purchases like this, CGI is more geographically diversified: it now gets 47% of its revenue from the U.S., 36% from Canada and 17% from the rest of the world.
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COMPUTER MODELLING GROUP $22.10 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 37.8 million; Market cap: $835.4 million; Dividend yield: 2.9%) sells consulting services and software that help oil and gas producers use advanced recovery techniques to get more out of their existing wells. The company has customers in over 50 countries and offices in Calgary, Houston, London, Caracas and Dubai.
In the three months ended September 30, 2012, Computer Modelling’s revenue rose 34.1%, to $16.1 million from $12.0 million a year earlier.
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In the three months ended September 30, 2012, Computer Modelling’s revenue rose 34.1%, to $16.1 million from $12.0 million a year earlier.
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PASON SYSTEMS $17.26 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 82.0 million; Market cap: $1.4 billion; Dividend yield: 2.8%) rents equipment for monitoring and managing oil and gas rigs. It also sells communication systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas producers and drilling contractors throughout Canada, the U.S., Mexico, Argentina and Australia.
In the three months ended September 30, 2012, Pason’s revenue rose 4.9%, to $93.1 million from $88.7 million a year earlier. Cash flow per share was unchanged at $0.50.
Higher international sales and steady drilling activity in the U.S. offset lower revenue in Canada. Pason’s U.S. sales rose 13.8%, to $54.6 million, and international sales jumped 34.0% to $9.4 million. Canadian revenue declined 13.8%, to $29.0 million.
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In the three months ended September 30, 2012, Pason’s revenue rose 4.9%, to $93.1 million from $88.7 million a year earlier. Cash flow per share was unchanged at $0.50.
Higher international sales and steady drilling activity in the U.S. offset lower revenue in Canada. Pason’s U.S. sales rose 13.8%, to $54.6 million, and international sales jumped 34.0% to $9.4 million. Canadian revenue declined 13.8%, to $29.0 million.
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RUBY TUESDAY, INC. $7.99 (New York symbol RT; TSINetwork Rating: Speculative) (865-379-5700; www.rubytuesday.com; Shares outstanding: 63.7 million; Market cap: $509.0 million; No dividends paid) has just announced a new plan to refocus its operations.
Under this initiative, the company will discontinue three of the new restaurant concepts it was developing: it’s closing its 13 Marlin & Ray’s restaurants and its single Wok Hay location. It’s also selling its two Truffles Grill restaurants. The company will keep 15 of its 17 newly launched Lime Fresh locations; it will close the remaining two.
The plan is being carried out by J.J. Buettgen, whom Ruby Tuesday appointed as its new president and CEO in November 2012. Buettgen was formerly the chief marketing officer at Darden Restaurants (symbol DRI on New York). Darden is the world’s largest casual dining operator. Ruby Tuesday hired him for his expertise in promoting multiple brands. As well, he has worked on turning around Darden’s well-established but underperforming Olive Garden and Red Lobster chains.
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Under this initiative, the company will discontinue three of the new restaurant concepts it was developing: it’s closing its 13 Marlin & Ray’s restaurants and its single Wok Hay location. It’s also selling its two Truffles Grill restaurants. The company will keep 15 of its 17 newly launched Lime Fresh locations; it will close the remaining two.
The plan is being carried out by J.J. Buettgen, whom Ruby Tuesday appointed as its new president and CEO in November 2012. Buettgen was formerly the chief marketing officer at Darden Restaurants (symbol DRI on New York). Darden is the world’s largest casual dining operator. Ruby Tuesday hired him for his expertise in promoting multiple brands. As well, he has worked on turning around Darden’s well-established but underperforming Olive Garden and Red Lobster chains.
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IMPERIAL METALS $13.70 (Toronto symbol III; TSINetwork Rating: Speculative) (604-669-8959; www.imperialmetals.com; Shares outstanding: 74.3 million; Market cap: $1.0 billion) has seen its share price over 11% since January 1, 2013, after it reported the latest results from the exploration program at its 100%-owned Mount Polley open-pit copper/gold mine in central B.C.
The latest results confirm that copper/gold mineralization extends beyond the Zuke zone and into the Boundary zone. The drilling results included 12.8 metres of a high 4.73% copper, 2.61 grams per tonne of gold and 30.05 grams per tonne of silver, as well as a very high 9.66% copper, 6.42 grams per tonne of gold and 52.81 grams per tonne of silver over 2.8 metres.
Imperial Metals is still a hold....
The latest results confirm that copper/gold mineralization extends beyond the Zuke zone and into the Boundary zone. The drilling results included 12.8 metres of a high 4.73% copper, 2.61 grams per tonne of gold and 30.05 grams per tonne of silver, as well as a very high 9.66% copper, 6.42 grams per tonne of gold and 52.81 grams per tonne of silver over 2.8 metres.
Imperial Metals is still a hold....
CARFINCO FINANCIAL GROUP $10.95 (Toronto symbol CFN; TSINetwork Rating: Speculative) (1-888- 486-4356; www.carfinco.com; Shares outstanding: 24.6 million; Market cap: $269.4 million; Dividend yield: 4.4%) raised its monthly dividend by 14.3%, to $0.04 from $0.035, starting with the October 2012 payment. This was the fourth dividend increase since the start of 2011. The higher payout gives the stock a 4.4% yield.
The company also added a $0.05-a-share special cash dividend to the regular dividend of $0.04 a share it paid in December 2012.
Carfinco is still a buy for aggressive investors.
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The company also added a $0.05-a-share special cash dividend to the regular dividend of $0.04 a share it paid in December 2012.
Carfinco is still a buy for aggressive investors.
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AMAZON.COM $268.93 (Nasdaq symbol AMZN; TSINetwork Rating: Extra Risk) (206-266-1000; www.amazon.com; Shares outstanding: 453.0 million; Market cap: $121.8 billion; No dividends paid) and ADOBE SYSTEMS $37.88 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 495.1 million; Market cap: $18.8 billion; No dividends paid) are part of a 12-company consortium that is buying bankrupt Eastman Kodak’s 1,100 digital-imaging patents for $525 million U.S.
Other members of the consortium include Apple, Google, Samsung, Research in Motion, Microsoft, China’s Huawei, Facebook and Fujifilm.
Under the deal, each of the 12 companies in the consortium will pay a portion of the total cost and then have access to all the patents.
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Other members of the consortium include Apple, Google, Samsung, Research in Motion, Microsoft, China’s Huawei, Facebook and Fujifilm.
Under the deal, each of the 12 companies in the consortium will pay a portion of the total cost and then have access to all the patents.
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YAMANA GOLD $17.14 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416- 815-0220; www.yamana.com; Shares outstanding: 752.0 million; Market cap: $12.9 billion; Dividend yield: 1.5%) saw its production rise 9% in 2012, to a record 1.2 million gold-equivalent ounces (including silver and copper) from 2011.
The company now forecasts production of 1.44 million to 1.6 million ounces in 2013, up 20% from 2012. Most of the increase will come from the expansion of its Minera Florida mine and production from three new Brazilian projects: Ernesto/Pau-a-Pique, C1 Santa Luz and Pilar.
As the company starts up more mines, its output will keep increasing: in 2014, its production should rise about 33% from 2012, to between 1.6 million and 1.77 million ounces.
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The company now forecasts production of 1.44 million to 1.6 million ounces in 2013, up 20% from 2012. Most of the increase will come from the expansion of its Minera Florida mine and production from three new Brazilian projects: Ernesto/Pau-a-Pique, C1 Santa Luz and Pilar.
As the company starts up more mines, its output will keep increasing: in 2014, its production should rise about 33% from 2012, to between 1.6 million and 1.77 million ounces.
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GABRIEL RESOURCES $2.82 (Toronto symbol GBU; TSINetwork Rating: Speculative) (416-955-9200; www.gabrielresources.com; Shares outstanding: 380.1 million; Market cap: $91.1 billion; No dividends paid) aims to develop its 80.46%-owned Rosia Montana gold project in Romania. With an estimated 10 million ounces of gold reserves and 500,000 ounces of projected annual output, Rosia Montana could become Europe’s largest producing gold mine.
However, the proposed mine is near the site of ancient Roman mining tunnels. That has triggered protests from environmentalists, historians and other civic groups.
Gabriel recently won a vote related to its bid to build the mine. A regional referendum on the issue was held on December 9, 2012. Of the voters who participated, 62.45% supported the resolution to permit mining. In the community of Rosia Montana itself, support was even higher, at over 78% in favour.
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However, the proposed mine is near the site of ancient Roman mining tunnels. That has triggered protests from environmentalists, historians and other civic groups.
Gabriel recently won a vote related to its bid to build the mine. A regional referendum on the issue was held on December 9, 2012. Of the voters who participated, 62.45% supported the resolution to permit mining. In the community of Rosia Montana itself, support was even higher, at over 78% in favour.
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ENDEAVOUR SILVER $7.86 (Toronto symbol EDR: TSINetwork Rating: Speculative) (1-877-685-9775; www.edrsilver.com; Shares outstanding: 99.5 million; Market cap: $782.1 million; No dividends paid) operates the Guanacevi and Bolanitos silver/gold mines in Mexico, as well as the recently acquired El Cubo project.
In the three months ended December 31, 2012, Endeavour’s revenue jumped 281% from a year earlier, to $66.7 million (all amounts except share prices in U.S. dollars). The company hasn’t yet released its earnings or cash flow for the latest quarter.
The revenue gain was partly due to higher production and an increase in silver and gold prices. The company also held back on selling silver and gold a year ago in response to lower prices at that time.
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In the three months ended December 31, 2012, Endeavour’s revenue jumped 281% from a year earlier, to $66.7 million (all amounts except share prices in U.S. dollars). The company hasn’t yet released its earnings or cash flow for the latest quarter.
The revenue gain was partly due to higher production and an increase in silver and gold prices. The company also held back on selling silver and gold a year ago in response to lower prices at that time.
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