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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YAMANA GOLD $15.71 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 746.2 million; Market cap: $11.7 billion; Dividend yield: 1.2%) raised its production by 5% in 2011, to 1.1 million gold-equivalent ounces (including silver and copper) from 2010.
The company now expects to produce 1.2 million to 1.3 million ounces in 2012, up 13% from 2011. Most of the increase will come from Yamana’s Mercedes mine in Mexico, which started up in November 2011.
As the company starts up more new mines, its production will continue to increase: in 2013, production should rise 43% from 2011 levels, to between 1.5 million and 1.7 million ounces. In 2014, that figure should climb to around 1.75 million ounces.
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The company now expects to produce 1.2 million to 1.3 million ounces in 2012, up 13% from 2011. Most of the increase will come from Yamana’s Mercedes mine in Mexico, which started up in November 2011.
As the company starts up more new mines, its production will continue to increase: in 2013, production should rise 43% from 2011 levels, to between 1.5 million and 1.7 million ounces. In 2014, that figure should climb to around 1.75 million ounces.
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ENDEAVOUR SILVER $10.39 (Toronto symbol EDR: TSINetwork Rating: Speculative) (1-877-685-9775; www.edrsilver.com; Shares outstanding: 87.6million; Market cap: $910.2 million; No dividends paid) operates the Guanacevi and Guanajuato silver/gold mines in Mexico.
In the three months ended September 30, 2011, Endeavour’s revenue rose 93.0%, to $38.8 million from $20.1 million a year earlier (all amounts except share prices in U.S. dollars). Cash flow per share more than doubled, to $0.24 from $0.11. Rising production and sharply higher gold and silver prices were the main reasons for the gains.
The company is nearly finished expanding the Guanajuato mine. That will push up its silver production by 12.1%, to 3.7 million ounces from 3.3 million ounces in 2010.
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In the three months ended September 30, 2011, Endeavour’s revenue rose 93.0%, to $38.8 million from $20.1 million a year earlier (all amounts except share prices in U.S. dollars). Cash flow per share more than doubled, to $0.24 from $0.11. Rising production and sharply higher gold and silver prices were the main reasons for the gains.
The company is nearly finished expanding the Guanajuato mine. That will push up its silver production by 12.1%, to 3.7 million ounces from 3.3 million ounces in 2010.
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IAMGOLD $16.38 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 376.8 million; Market cap: $6.2 billion; Dividend yield: 1.2%) sold its Mupane mine in Botswana for $34.2 million in September 2011 (all figures except share price and market cap in U.S. dollars). Earlier in 2011, IAMGold sold its 18.9% stake in the Tarkwa and Damang gold mines in Ghana to South African mining giant Gold Fields Ltd. for $667 million in cash.
The sales left IAMGold with 38% of the Sadiola mine and 40% of the Yatela mine, both located in Mali; 90% of its new Essakane gold mine in Burkina Faso; 100% of the Doyon mine in Quebec; and 100% of the Rosebel mine in Suriname, South America.
In addition, IAMGold also has a 1% royalty interest in the Diavik diamond mine in the Northwest Territories. It also owns the Niobec niobium mine in Quebec. Niobium is a rare metal that when used as an additive makes steel stronger, more heat resistant and easier to weld.
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The sales left IAMGold with 38% of the Sadiola mine and 40% of the Yatela mine, both located in Mali; 90% of its new Essakane gold mine in Burkina Faso; 100% of the Doyon mine in Quebec; and 100% of the Rosebel mine in Suriname, South America.
In addition, IAMGold also has a 1% royalty interest in the Diavik diamond mine in the Northwest Territories. It also owns the Niobec niobium mine in Quebec. Niobium is a rare metal that when used as an additive makes steel stronger, more heat resistant and easier to weld.
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DOREL INDUSTRIES $24.97 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com;Shares outstanding: 32.6 million; Market cap: $814.0 million; Dividend yield: 2.4%) has bought Poltrade, a Polish juvenile products distributor and retailer, for an undisclosed sum.
Founded in 1991, Poltrade is growing quickly and will likely report sales of 7.5 million euros ($9.8 million Canadian) this year. The company has the largest share of the Polish child car seat market.
Poltrade has distributed a number of Dorel’s products in Poland since 1996. In addition to its distribution business, Poltrade operates three retail outlets.
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Founded in 1991, Poltrade is growing quickly and will likely report sales of 7.5 million euros ($9.8 million Canadian) this year. The company has the largest share of the Polish child car seat market.
Poltrade has distributed a number of Dorel’s products in Poland since 1996. In addition to its distribution business, Poltrade operates three retail outlets.
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FIRSTSERVICE CORP. $28.40 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 30.5 million; Market cap: $866.2 million; No dividends paid) serves the following areas of the real estate market: commercial real estate, residential property management, and property improvement. FirstService has more than 20,000 employees worldwide.
FirstService’s revenue rose 10.4% in the three months ended September 30, 2011, to $585.4 million from $530.5 million a year earlier (all figures except share price in U.S. dollars). Excluding one-time items, earnings per share were unchanged at $0.61. Cash flow rose 22.6%, to $1.03 a share from $0.84.
Revenue increased at two of FirstService’s three divisions: commercial real estate (up 14%) and residential property management (up 15%).
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FirstService’s revenue rose 10.4% in the three months ended September 30, 2011, to $585.4 million from $530.5 million a year earlier (all figures except share price in U.S. dollars). Excluding one-time items, earnings per share were unchanged at $0.61. Cash flow rose 22.6%, to $1.03 a share from $0.84.
Revenue increased at two of FirstService’s three divisions: commercial real estate (up 14%) and residential property management (up 15%).
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REITMANS (CANADA) LTD. $14.25 (Toronto symbol RET.A; TSINetwork Rating: Extra Risk) (514-384-1140; www.reitmans.com; Shares outstanding: 66.3 million; Market cap: $944.8 million; Dividend yield: 5.6%) owns 975 women’s clothing stores across Canada.
The chain consists of 366 Reitmans, 158 Penningtons, 158 Smart Set, 123 Addition Elle, 77 Thyme Maternity, 68 RW & Co. and 25 Cassis stores. Reitmans is in the process of closing the Cassis stores and converting them to its other chains.
In the three months ended October 29, 2011, Reitmans’ earnings fell 49.0%, to $10.6 million, or $0.16 a share, from $20.7 million, or $0.31 a share, a year earlier. The company’s sales were down 3.2%, to $254.1 million from $262.5 million. Same-store sales declined 5.8%.
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The chain consists of 366 Reitmans, 158 Penningtons, 158 Smart Set, 123 Addition Elle, 77 Thyme Maternity, 68 RW & Co. and 25 Cassis stores. Reitmans is in the process of closing the Cassis stores and converting them to its other chains.
In the three months ended October 29, 2011, Reitmans’ earnings fell 49.0%, to $10.6 million, or $0.16 a share, from $20.7 million, or $0.31 a share, a year earlier. The company’s sales were down 3.2%, to $254.1 million from $262.5 million. Same-store sales declined 5.8%.
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CHESAPEAKE ENERGY $21.45 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chkenergy.com; Shares outstanding: 753.0 million; Market cap: $16.2 billion; Dividend yield: 1.6%) is forming a second joint venture with major French oil firm Total S.A.
In early 2010, Chesapeake sold a share of its Barnett Shale acreage in Texas to Total for $2.25 billion. Shale oil and shale gas are trapped in rock formations. To extract them, companies must pump water and chemicals into the rock. This fractures the rock and releases the oil or gas.
Under this new deal, Total will buy a 25% stake in roughly 619,000 exploration acres in the Utica Shale area of Ohio. Total will pay Chesapeake $610 million for its share of the acreage, plus $1.42 billion in development costs. Chesapeake expects to receive the full amount by the end of 2014.
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In early 2010, Chesapeake sold a share of its Barnett Shale acreage in Texas to Total for $2.25 billion. Shale oil and shale gas are trapped in rock formations. To extract them, companies must pump water and chemicals into the rock. This fractures the rock and releases the oil or gas.
Under this new deal, Total will buy a 25% stake in roughly 619,000 exploration acres in the Utica Shale area of Ohio. Total will pay Chesapeake $610 million for its share of the acreage, plus $1.42 billion in development costs. Chesapeake expects to receive the full amount by the end of 2014.
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CAMECO CORP. $22.90 (Toronto symbol CCO; TSINetwork Rating: Extra Risk) (306-956-6200; www.cameco.com; Shares outstanding: 390.0 million; Market cap: $8.9 billion; Dividend yield 0.7%) is the world’s largest uranium producer. It supplies over 18% of global production, and has large, high-grade reserves, low-cost operations, significant market share and a number of uranium mines.
Cameco also holds a 31.6% stake in Ontario’s Bruce Power partnership, which operates four of the eight reactors at the Bruce plant, North America’s largest nuclear power complex.
In the three months ended September 30, 2011, Cameco’s revenue rose 25.8%, to $527 million from $419 million a year earlier. It sold more uranium in the latest quarter, and its selling prices also rose. Earnings per share jumped 30.0%, to $0.26 from $0.20.
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Cameco also holds a 31.6% stake in Ontario’s Bruce Power partnership, which operates four of the eight reactors at the Bruce plant, North America’s largest nuclear power complex.
In the three months ended September 30, 2011, Cameco’s revenue rose 25.8%, to $527 million from $419 million a year earlier. It sold more uranium in the latest quarter, and its selling prices also rose. Earnings per share jumped 30.0%, to $0.26 from $0.20.
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SHERRITT INTERNATIONAL $6.36 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 296.4 million; Market cap: $1.9 billion; Dividend yield: 2.4%) is a diversified natural-resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 376 megawatts of power-generation capacity in Cuba.
Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to finishing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan. It is also Canada’s largest thermal coal producer.
In the three months ended September 30, 2011, Sherritt’s earnings jumped 102.2%, to $45.5 million, or $0.15 a share. A year earlier, it earned $22.5 million, or $0.07 a share. Revenue rose 13.0%, to $466.4 million from $412.7 million. Higher coal and oil prices were the main reasons for the improved results.
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Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to finishing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan. It is also Canada’s largest thermal coal producer.
In the three months ended September 30, 2011, Sherritt’s earnings jumped 102.2%, to $45.5 million, or $0.15 a share. A year earlier, it earned $22.5 million, or $0.07 a share. Revenue rose 13.0%, to $466.4 million from $412.7 million. Higher coal and oil prices were the main reasons for the improved results.
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AASTRA TECHNOLOGIES $15.82 (Toronto symbol AAH; TSINetwork Rating: Speculative) (905-760-4200; www.aastra.com; Shares outstanding: 14.1 million; Market cap: $223.1 million; Dividend yield: 5.1%) sells products and systems that let businesses access communication networks, including the Internet.
In the three months ended September 30, 2011, Aastra’s sales fell 2.6%, to $156.6 million from $160.7 million a year earlier. Higher sales in Germany were offset by lower sales in Spain and North America.
The company earned $0.12 a share, up sharply from $0.01 a share, mainly on lower research costs and foreign-exchange losses. Aastra holds cash of $118.5 million, or a high $8.34 a share, and has no long-term debt.
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In the three months ended September 30, 2011, Aastra’s sales fell 2.6%, to $156.6 million from $160.7 million a year earlier. Higher sales in Germany were offset by lower sales in Spain and North America.
The company earned $0.12 a share, up sharply from $0.01 a share, mainly on lower research costs and foreign-exchange losses. Aastra holds cash of $118.5 million, or a high $8.34 a share, and has no long-term debt.
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