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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PASON SYSTEMS $15.76 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 82.0 million; Market cap: $1.3 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 June 30, 2012, Pason’s revenue rose 29.8%, to $81.1 million from $62.4 million a year earlier. Cash flow rose 31.5%, to $30.1 million, or $0.37 a share, from $22.9 million, or $0.28.
Even with declining oil prices and continued low gas prices, drilling activity rose 6% in Canada and the U.S. in the latest quarter, with a combined 188,291 active days and a rig count of 2,069, compared to 177,791 days and 1,954 rigs a year earlier.
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In the three months ended June 30, 2012, Pason’s revenue rose 29.8%, to $81.1 million from $62.4 million a year earlier. Cash flow rose 31.5%, to $30.1 million, or $0.37 a share, from $22.9 million, or $0.28.
Even with declining oil prices and continued low gas prices, drilling activity rose 6% in Canada and the U.S. in the latest quarter, with a combined 188,291 active days and a rig count of 2,069, compared to 177,791 days and 1,954 rigs a year earlier.
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SYMANTEC CORP. $18.94 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 701.9 million; Market cap: $13.3 billion; No dividends paid) sells computer-security technology, including anti-virus and email-filtering software, to businesses and consumers. It also offers data-archiving software that helps its clients meet increasingly strict regulatory and compliance standards.
In the three months ended June 29, 2012, Symantec’s earnings per share excluding one-time items rose 7.5%, to $0.43 from $0.40. That beat the consensus estimate of $0.33.
Revenue rose just 0.9%, to $1.67 billion from $1.65 billion. Stronger sales of security software to businesses offset lower sales to consumers, who account for about 30% of Symantec’s overall revenue. As well, higher sales in the Americas and Asia helped overcome declines in Europe.
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In the three months ended June 29, 2012, Symantec’s earnings per share excluding one-time items rose 7.5%, to $0.43 from $0.40. That beat the consensus estimate of $0.33.
Revenue rose just 0.9%, to $1.67 billion from $1.65 billion. Stronger sales of security software to businesses offset lower sales to consumers, who account for about 30% of Symantec’s overall revenue. As well, higher sales in the Americas and Asia helped overcome declines in Europe.
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ACI WORLDWIDE $42.71 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 39.8 million; Market cap: $1.7 billion; No dividends paid) makes software that is used to process transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments.
In mid-February 2012, ACI completed its purchase of S1 Corp. for $540 million in cash and stock. This acquisition is a good fit: S1 sells transaction software for banks, credit unions, retailers and other payment processors. It has over 3,000 clients worldwide.
In the second quarter of 2012, ACI’s revenue rose 32.1%, to $149.8 million from $113.4 million a year earlier. S1′s $43.1-million contribution was the main reason for the gain.
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In mid-February 2012, ACI completed its purchase of S1 Corp. for $540 million in cash and stock. This acquisition is a good fit: S1 sells transaction software for banks, credit unions, retailers and other payment processors. It has over 3,000 clients worldwide.
In the second quarter of 2012, ACI’s revenue rose 32.1%, to $149.8 million from $113.4 million a year earlier. S1′s $43.1-million contribution was the main reason for the gain.
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SHERRITT INTERNATIONAL $4.90(Toronto symbol S; TSINetwork Rating: Speculative) (1-800- 704-6698; www.sherritt.com; Shares outstanding: 296.9 million; Market cap: $1.5 billion; Dividend yield: 3.1%) recently finished building a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast.
The government of Madagascar has just signed an operating permit that will let Sherritt and its partners begin production at Ambatovy, which will be one of the world’s biggest nickel mines.
The $5.5-billion project will be able to produce 60,000 tonnes of refined nickel a year for the next three decades.
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The government of Madagascar has just signed an operating permit that will let Sherritt and its partners begin production at Ambatovy, which will be one of the world’s biggest nickel mines.
The $5.5-billion project will be able to produce 60,000 tonnes of refined nickel a year for the next three decades.
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WESTJET AIRLINES $17.28 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 126.9 million; Market cap: $2.2 billion; Dividend yield: 1.9%) was trading at $14.10 when we made it our #1 Stock of the Year for 2011. It was a year late getting started, but it’s now hitting new highs.
The company serves 81 destinations in North America, Central America and the Caribbean. Its fleet of 99 modern Boeing 737s are 30% more fuel efficient than older aircraft. WestJet is scheduled to receive 36 more 737s through 2018.
In the three months ended June 30, 2012, WestJet’s revenue rose 9.0%, to $809.3 million from $742.3 million a year earlier. Demand for its flights remains high, and it has entered into new partnerships with other airlines; these were the main reasons for the higher revenue.
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The company serves 81 destinations in North America, Central America and the Caribbean. Its fleet of 99 modern Boeing 737s are 30% more fuel efficient than older aircraft. WestJet is scheduled to receive 36 more 737s through 2018.
In the three months ended June 30, 2012, WestJet’s revenue rose 9.0%, to $809.3 million from $742.3 million a year earlier. Demand for its flights remains high, and it has entered into new partnerships with other airlines; these were the main reasons for the higher revenue.
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The more you know about investing, the more successful you will be. That has been Pat McKeough’s approach through four decades as an investor and investment counsellor. He regularly presents his views on specific investment topics—and specific stocks—on video in order to share the insights he has gathered over the years. Today’s topic is one of the world’s leading tech stocks. In the contest to see which company would become the dominant Internet search engine, Google (symbol GOOG on Nasdaq) was the clear winner. It has built upon that foundation. Four years ago, the company launched its Android operating system for smartphones and tablet computers. This year, it purchased cellphone maker Motorola Mobility. Now it has announced a key re-organization that will make its richly-priced shares more liquid. We give an explanation of Google’s share initiative followed by Pat’s commentary. ...
Pat McKeough responds to many personal questions on 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 a question about one of China’s biggest budget hotel operators. In response, Pat gives an assessment of the potential rewards—and many risk factors—that come with investing in China. ...
BROADRIDGE FINANCIAL SERVICES INC. $24 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 124.9 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.0%; TSINetwork Rating: Average; www.broadridge.com) gets 70% of its revenue from its Investor Communication Solutions division, which distributes proxy materials, including ballots, to investors in stocks and mutual funds. It also counts the votes. Broadridge’s ProxyEdge software helps centralize and simplify shareholder voting, particularly if a meeting involves multiple ballots. Broadridge mails and processes 60% of all proxy votes worldwide.
The remaining 30% of its revenue comes from its Securities Processing Solutions division, which provides transaction-processing services that automate many functions, including taking and executing orders, confirming trades, settlement and accounting.
Big changes since spinoff
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The remaining 30% of its revenue comes from its Securities Processing Solutions division, which provides transaction-processing services that automate many functions, including taking and executing orders, confirming trades, settlement and accounting.
Big changes since spinoff
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MOTOROLA SOLUTIONS INC. $48 (New York symbol MSI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 286.3 million; Market cap: $13.7 billion; Priceto- sales ratio: 1.6; Dividend yield: 2.2%; TSINetwork Rating: Average; www.motorolasolutions.com) makes specialized equipment, such as bar-code scanners and radios for police and fire vehicles. It gets two-thirds of its revenue by selling its products to governments; the remaining third comes from businesses.
Earnings jumped 29.6% in the three months ended June 30, 2012, to $0.70 a share from $0.54 a year earlier. Revenue rose 8.3%, to $2.1 billion from $2.0 billion. Sales to government customers rose 13.6%. However, weak economic conditions in Europe cut sales to businesses by 1.6%.
It also raised its quarterly dividend by 18.2%, to $0.26 a share from $0.22. The new annual rate of $1.04 yields 2.2%.
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Earnings jumped 29.6% in the three months ended June 30, 2012, to $0.70 a share from $0.54 a year earlier. Revenue rose 8.3%, to $2.1 billion from $2.0 billion. Sales to government customers rose 13.6%. However, weak economic conditions in Europe cut sales to businesses by 1.6%.
It also raised its quarterly dividend by 18.2%, to $0.26 a share from $0.22. The new annual rate of $1.04 yields 2.2%.
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PFIZER INC. $24 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 7.5 billion; Market cap: $180.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.pfizer.com) plans to spin off its animal health subsidiary, which makes drugs for livestock and pets, as a separate, publicly traded company. As part of this plan, Pfizer will sell up to 20% of this business. The new company, which will be called Zoetis Inc., supplied 6% of Pfizer’s 2011 revenue of $67.4 billion.
Pfizer should complete the offering in the first half of 2013. After that, it will probably hand out its remaining shares in Zoetis to its own shareholders.
Pfizer is a buy.
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Pfizer should complete the offering in the first half of 2013. After that, it will probably hand out its remaining shares in Zoetis to its own shareholders.
Pfizer is a buy.
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