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
AGILENT TECHNOLOGIES INC. $44 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 348.1 million; Market cap: $15.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 0.9%; TSINetwork Rating: Average; www.agilent.com) makes testing systems that help improve electronic
devices, such as cellphones. It also makes medical and drug-testing equipment.
The company will pay its first-ever quarterly dividend of $0.10 a share in April 2012. The annual rate of $0.40 yields 0.9%.
...
devices, such as cellphones. It also makes medical and drug-testing equipment.
The company will pay its first-ever quarterly dividend of $0.10 a share in April 2012. The annual rate of $0.40 yields 0.9%.
...
DIEBOLD INC. $32 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 62.6 million; Market cap: $2.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.5%; TSINetwork Rating: Average; www.diebold.com) makes ATMs, safes, vaults and building security systems.
Diebold spends 3% of its revenue on research. This has helped it develop innovative new products, such as its Opteva Flex Performance ATMs. These models can sort banknotes that customers deposit and then reissue them to other users. This reduces the need to refill these ATMs with fresh bills.
In the third quarter of 2011, Diebold’s revenue fell 5.2%, to $709.3 million from $748.6 million a year earlier. That’s mainly due to lower sales of lottery and voting equipment in Brazil.
...
Diebold spends 3% of its revenue on research. This has helped it develop innovative new products, such as its Opteva Flex Performance ATMs. These models can sort banknotes that customers deposit and then reissue them to other users. This reduces the need to refill these ATMs with fresh bills.
In the third quarter of 2011, Diebold’s revenue fell 5.2%, to $709.3 million from $748.6 million a year earlier. That’s mainly due to lower sales of lottery and voting equipment in Brazil.
...
NCR CORP. $18 (New York symbol NCR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 157.4 million; Market cap: $2.8 billion; Price-to-sales ratio: 0.5; No dividends paid; TSINetwork Rating: Average; www.ncr.com) is a leading maker of ATMs, checkout scanners, cash registers and self-serve kiosks.
In August 2011, NCR paid $1.2 billion for Radiant Systems Inc., which makes point-of-sale terminals and self-serve kiosks for hotels, restaurants and gas stations. This purchase will cut NCR’s reliance on ATMs, which account for 55% of its overall revenue.
In the quarter ended September 30, 2011, NCR’s revenue rose 16.2%, to $1.4 billion from $1.2 billion. Radiant contributed $36 million to the increase. NCR earned $16 million, or $0.10 a share. That’s down 79.5% from $78 million, or $0.48 a share, a year earlier. Without costs to integrate Radiant, earnings per share rose 15.2%, to $0.53 from $0.46.
...
In August 2011, NCR paid $1.2 billion for Radiant Systems Inc., which makes point-of-sale terminals and self-serve kiosks for hotels, restaurants and gas stations. This purchase will cut NCR’s reliance on ATMs, which account for 55% of its overall revenue.
In the quarter ended September 30, 2011, NCR’s revenue rose 16.2%, to $1.4 billion from $1.2 billion. Radiant contributed $36 million to the increase. NCR earned $16 million, or $0.10 a share. That’s down 79.5% from $78 million, or $0.48 a share, a year earlier. Without costs to integrate Radiant, earnings per share rose 15.2%, to $0.53 from $0.46.
...
INTERNATIONAL FLAVORS & FRAGRANCES INC. $57 (New York symbol IFF; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 80.9 million; Market cap: $4.6 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.iff.com) aims to make its fragrances division more profitable. This business makes compounds that improve the smells of soaps, detergents and air fresheners.
As part of this plan, IFF will increase its focus on emerging markets. As a result, it will cut 70 employees worldwide. It will pay severance and other costs of $10 million, or $0.08 a share; IFF earned $81.8 million, or $1.00 a share, in the third quarter of 2011. The plan should save it $9 million a year, starting in 2012.
International Flavors & Fragrances is a buy.
...
As part of this plan, IFF will increase its focus on emerging markets. As a result, it will cut 70 employees worldwide. It will pay severance and other costs of $10 million, or $0.08 a share; IFF earned $81.8 million, or $1.00 a share, in the third quarter of 2011. The plan should save it $9 million a year, starting in 2012.
International Flavors & Fragrances is a buy.
...
CONAGRA FOODS INC. $27 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 412.6 million; Market cap: $11.1 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.conagrafoods.com) is paying an undisclosed sum for the Canadian operations of Del Monte Foods. This business makes packaged fruits, fruit snacks and vegetables under the Del Monte brand, as well as canned tomato products under the Aylmer label.
The new operations look like a nice fit with ConAgra’s existing operations in Canada, and will add $150 million to its annual sales of $12.8 billion.
ConAgra is a buy.
...
The new operations look like a nice fit with ConAgra’s existing operations in Canada, and will add $150 million to its annual sales of $12.8 billion.
ConAgra is a buy.
...
GOOGLE INC. $569 (Nasdaq symbol GOOG; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 323.9 million; Market cap: $184.3 billion; Price-to-sales ratio: 5.0; No dividends paid; TSINetwork Rating: Above Average; www.google.com) is the world’s leading Internet search engine. The search service is free, but it provides a platform for Google to sell ads on its websites. Ads account for 96% of its total revenue.
Google continues to hire new employees as it builds up its non-search operations, including its Google+ social-networking site. Google+ now has 90 million users, up from 40 million in October 2011.
Even with these extra expenses, Google’s earnings in the three months ended December 31, 2011 rose 9.7%, to $3.1 billion from $2.85 billion a year earlier. Earnings per share rose 8.6%, to $9.50 from $8.75, on more shares outstanding. These figures exclude unusual items, mainly stock options paid to employees.
...
Google continues to hire new employees as it builds up its non-search operations, including its Google+ social-networking site. Google+ now has 90 million users, up from 40 million in October 2011.
Even with these extra expenses, Google’s earnings in the three months ended December 31, 2011 rose 9.7%, to $3.1 billion from $2.85 billion a year earlier. Earnings per share rose 8.6%, to $9.50 from $8.75, on more shares outstanding. These figures exclude unusual items, mainly stock options paid to employees.
...
MICROSOFT CORP. $30 (Nasdaq symbol MSFT; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 8.4 billion; Market cap: $252.0 billion; Price-to-sales ratio: 3.4; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.microsoft.com) gets 80% of its sales from its Windows operating system and Office suite of business software. However, the company is taking steps to expand into other areas, as well.
For example, Microsoft recently entered into an alliance with Nokia Corp. (New York symbol NOK). Under this deal, Nokia will make mobile phones that use Microsoft’s Windows Phone software.
Microsoft also paid $8.5 billion in October 2011 for Skype Global. Skype’s software lets computer users make free phone calls over the Internet. Microsoft feels that Skype will enhance its Xbox Live service, which lets users of its Xbox video game consoles communicate with each other online.
...
For example, Microsoft recently entered into an alliance with Nokia Corp. (New York symbol NOK). Under this deal, Nokia will make mobile phones that use Microsoft’s Windows Phone software.
Microsoft also paid $8.5 billion in October 2011 for Skype Global. Skype’s software lets computer users make free phone calls over the Internet. Microsoft feels that Skype will enhance its Xbox Live service, which lets users of its Xbox video game consoles communicate with each other online.
...
APPLE INC. $447 (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 932.2 million; Market cap: $416.7 billion; Price-to-sales ratio: 3.1; No dividends paid; TSINetwork Rating: Average; www.apple.com) makes computers and a wide range of electronic devices, including the iPhone and iPad tablet computer.
Apple recently teamed up with several leading textbook publishers to make more titles available to iPad and iPhone users. The company has also launched its new iBooks 2 software, which makes it easy for students to use Apple devices to take notes and search within text. Publishers can also use the program to quickly update content and add features, like video.
This could be a huge market for Apple. By 2020, e-books could account for half of all textbook sales, up from just 3% in 2011.
...
Apple recently teamed up with several leading textbook publishers to make more titles available to iPad and iPhone users. The company has also launched its new iBooks 2 software, which makes it easy for students to use Apple devices to take notes and search within text. Publishers can also use the program to quickly update content and add features, like video.
This could be a huge market for Apple. By 2020, e-books could account for half of all textbook sales, up from just 3% in 2011.
...
INTERNATIONAL BUSINESS MACHINES CORP. $192 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.2 billion; Market cap: $230.4 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.ibm.com) is the world’s oldest computer company (it began operating in 1911), with operations in over 170 countries.
The company continues to profit from its move away from mainframe computers and toward designing computer systems and managing them on behalf of its clients. The resulting long-term maintenance contracts give it more dependable revenue streams. IBM now gets 55% of its revenue from services.
The company continues to rapidly grow its software business. Right now, it is particularly focused on developing analytics software, which helps businesses and government agencies gather and analyze a wide variety of data. In addition, IBM makes software for applications ranging from traffic management to power grids and food production. Software now supplies 25% of IBM’s overall revenue.
...
The company continues to profit from its move away from mainframe computers and toward designing computer systems and managing them on behalf of its clients. The resulting long-term maintenance contracts give it more dependable revenue streams. IBM now gets 55% of its revenue from services.
The company continues to rapidly grow its software business. Right now, it is particularly focused on developing analytics software, which helps businesses and government agencies gather and analyze a wide variety of data. In addition, IBM makes software for applications ranging from traffic management to power grids and food production. Software now supplies 25% of IBM’s overall revenue.
...
CHIPOTLE MEXICAN GRILL $356.82 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.8 million; Market cap: $11.3 billion; No dividends paid) is a Denver-based Mexican-restaurant chain. The company charges slightly higher prices than fast-food chains, but it offers higher-quality food, including naturally raised meat, and better decor and service.
In the three months ended September 30, 2011, sales rose 24.1%, to $591.9 million from $476.9 million a year earlier. The company’s restaurants attracted more customers during the quarter, and it raised its prices. That pushed up same-restaurant sales by 11.3%. As well, Chipotle opened 32 new outlets. Earnings per share rose 24.5%, to $1.93 from $1.55.
...
In the three months ended September 30, 2011, sales rose 24.1%, to $591.9 million from $476.9 million a year earlier. The company’s restaurants attracted more customers during the quarter, and it raised its prices. That pushed up same-restaurant sales by 11.3%. As well, Chipotle opened 32 new outlets. Earnings per share rose 24.5%, to $1.93 from $1.55.