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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DOMINO’S PIZZA $42.06 (New York symbol DPZ; TSINetwork Rating: Average) (734-930-3030; www.dominos.com; Shares outstanding: 56.8 million; Market cap: $2.4 billion; No dividends paid) is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 10,040 outlets in the U.S. and over 70 in other countries. Franchisees run most of these stores. In the quarter ended September 9, 2012, the company’s earnings per share rose 22.2%, to $0.44 from $0.36 a year earlier. Sales rose slightly, to $378.1 million from $376.3 million. Same-store sales rose 5.0% internationally and 3.3% in the U.S. Domino’s continues to boost its sales by aggressively promoting its new pizza recipes. It’s also profiting by moving into digital ordering on the Internet and through software applications (or apps) on smartphones. In addition, Domino’s still has lots of growth potential overseas....
NISSAN MOTOR CO. (ADR) $18.72 (Nasdaq symbol NSANY; TSINetwork Rating: Above Average) (310-771-3111; www.nissan-global.com; Shares outstanding: 2.3 billion; Market cap: $43.1 billion; No dividends paid) has reported record North American sales for the month of November. Overall, the company sold 96,197 cars and trucks on the continent during the month. That’s up 12.9% from 85,182 vehicles in November 2011. Like all automakers, Nissan needs a renewed global economic recovery to keep pushing up its sales. Meanwhile, its outlook remains positive....
CALIAN TECHNOLOGIES $20.80 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613- 599-8600; www.calian.com; Shares outstanding: 7.6 million; Market cap: $158.1 million; Dividend yield: 5.4%) has reported improved results in the latest quarter. In the three months ended September 30, 2012, Calian earned $3.4 million, or $0.44 a share. That’s up slightly from $3.3 million, or $0.43 a share, a year ago. Revenue rose 4.9%, to $58.1 million from $55.4 million. Calian’s Business and Technology Services division, which provides 70% of the company’s overall revenue, continues to benefit from steady orders from various Canadian federal government departments, including the Department of National Defence....
REITMANS (CANADA) LTD. $11.75 (Toronto symbol RET.A; TSINetwork Rating: Extra Risk) (514- 384-1140; www.reitmans.com; Shares outstanding: 65.5 million; Market cap: $769.6 million; Dividend yield: 6.8%) reports that its sales fell 7.0% in the three months ended October 27, 2012, to $236.2 million from $254.1 million a year earlier. Same-store sales declined 4.0%. The company earned $38,000, or nil per share, compared to a profit of $10.6 million, or $0.16 a share, a year earlier. In June 2012, Reitmans installed new inventorymanagement software at its distribution centre, and complications with this system have disrupted shipments to its stores. In the latest quarter, that cut sales at the company’s outlets by $7 million to $15 million and caused a corresponding drop in profits....
TOROMONT INDUSTRIES LTD. $21.77 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 76.3 million; Market cap: $1.6 billion; Dividend yield: 2.2%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. Toromont also makes refrigeration systems through its CIMCO division. In July 2011, the company completed the spinoff of Enerflex Ltd. (see at right). Shareholders received shares of the new Toromont and shares of Enerflex. Sales and profits keep rising...
Knowing when to sell a stock is one of the keys to successful investing. That’s why we advise investors to follow an important rule when it comes to rising stocks. When prices go down, investors naturally focus on when to sell aggressive stocks. However, you also need to consider when to sell after strong moves up by hot stocks....
Pat McKeough responds to many personal questions about specific stocks and other investment topics from the members of his Inner Circle. 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 the Inner Circle. Recently, we received a question from an Inner Circle member about one of the world’s most visible technology stocks, Internet giant Yahoo. Pat discusses the state of the company following its recent hiring of a new CEO away from its most powerful rival, Google. Pat also took the opportunity to compare the prospects of both of these Internet giants....
Pat McKeough responds to many personal questions about specific stocks and other investment topics from the members of his Inner Circle. 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 the Inner Circle. This week, we received a question from an Inner Circle member on an Italian eyewear company whose products range from popular brands like LensCrafters to luxury names like Prada. The company, which trades as an ADR, makes the majority of its sales in North America, and Pat looks at its prospects for growth in an uncertain global economy....
Pat McKeough responds to many personal questions about specific stocks and other investment topics from the members of his Inner Circle. 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 the Inner Circle. This week, an Inner Circle member asked about the world’s biggest generic drug maker. This Israeli-based firm, which trades as an ADR, has grown steadily by acquisition. Pat examines the prospects for growth as an aging population demands more drugs, but he also looks at the challenges of increased competition and government regulation....
BAXTER INTERNATIONAL INC. $66 (New York symbol BAX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 549.4 million; Market cap: $36.3 billion; Price-to-sales ratio: 2.6; Dividend yield: 2.7%; TSINetwork Rating: Average; www.baxter.com) makes medical products, such as intravenous pumps and kidney dialysis equipment. It also makes vaccines and drugs. Half of its sales come from single-use products that need to be continually reordered.
Demand for the company’s products continues to improve, particularly as an aging population needs more medical devices and drugs. Baxter’s sales rose 23.4%, from $11.3 billion in 2007 to $13.9 billion in 2011.
Earnings rose 36.1%, from $1.8 billion in 2007 to $2.5 billion in 2011. The company is an aggressive buyer of its own shares. Because of a 10% drop in the number of shares outstanding, earnings per share jumped 54.5%, from $2.79 to $4.31.
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Demand for the company’s products continues to improve, particularly as an aging population needs more medical devices and drugs. Baxter’s sales rose 23.4%, from $11.3 billion in 2007 to $13.9 billion in 2011.
Earnings rose 36.1%, from $1.8 billion in 2007 to $2.5 billion in 2011. The company is an aggressive buyer of its own shares. Because of a 10% drop in the number of shares outstanding, earnings per share jumped 54.5%, from $2.79 to $4.31.
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