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
BROADRIDGE FINANCIAL SOLUTIONS INC. $22 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 134.8 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.6%; WSSF Rating: Average) serves the investment industry in three main areas: investor communications; securities processing; and transaction clearing. The company mails and processes 70% of all proxy votes. Broadridge stands to gain as more investors buy shares during the stock-market rebound. It should also benefit as securities regulations become more complex. As well, lower prices for computer hardware and software are driving down its operating costs. In its second quarter, which ended December 31, 2009, Broadridge’s earnings before one-time items jumped 76.2%, to $0.37 a share from $0.21 a year earlier. Revenue rose 21.1%, to $529.7 million from $437.5 million....
On Sunday, the U.S. House of Representatives passed the Obama administration’s massive overhaul of the U.S. health-care system, nicknamed Obamacare. On Tuesday, the president signed the bill into law. The non-partisan Congressional Budget Office puts the cost of Obamacare at about $940 billion over ten years. The administration plans to cover this cost with a new tax on high-income earners, Medicare savings and new taxes on health-care companies, including major U.S. drug stocks. However, a number of health-care firms, including drug stocks and medical-equipment suppliers, stand to benefit from Obamacare. That’s mainly because it will extend coverage to over 32 million Americans who are currently uninsured....
Our Successful Investor Stock Picker Fund is one of four “pooled funds” we offer as part of our Successful Investor Wealth Management service. The fund takes its name from our Stock Pickers Digest newsletter, which focuses on investments that would be suitable for your aggressive portfolio. Our pooled funds operate like traditional mutual funds. They give us a way to offer investment management to investors with smaller portfolios. They also give investors with larger portfolios a way of investing in specialized areas of the market.
Our Successful Investor Stock Picker Fund brings a conservative approach to aggressive investing
...
Hidden value is one of the key factors we look for when we choose stocks to recommend in our newsletters and investment services, including Wall Street Stock Forecaster, our newsletter that covers the U.S. stock market. By hidden value, we mean valuable assets that are not getting the attention they deserve from investors. When a company’s assets are wholly or partially hidden, the stock trades for less than it’s really worth, so you get to buy at a bargain price.
High research spending could mean big gains lie ahead for technology stocks
...
Now that the Olympic flame is out in Vancouver, the attention of the sporting world is starting to turn to the next winter games, in Sochi, Russia, in 2014. That’s also true of the investing world, as companies line up to get a piece of the roughly $12 billion (Canadian) that is being spent to build the Russian Olympics in Sochi. And one Canadian firm is set to play a big role: engineering firm SNC-Lavalin Group Inc. (symbol SNC on Toronto). SNC is one of the growth stocks we cover in our Successful Investor newsletter.
This growth stock’s international expertise makes it well-suited to help build the Russian Olympics
...
AUTODESK INC. $28 (Nasdaq symbol ADSK; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 229.7 million; Market cap: $6.4 billion; Price-to-sales ratio: 3.8; No dividends paid; WSSF Rating: Average) makes computer-assisted design software that lets engineers and architects analyze their products’ performance early in the design process. That saves time and money, and improves the quality of the final product. In Autodesk’s 2010 fiscal year, which ended January 31, 2010, its revenue fell 26.0%, to $1.7 billion from $2.3 billion in the prior year. That’s mainly because several of Autodesk’s customers put off upgrading their computer-aided design software because of the weak economy. In response to the lower revenue, Autodesk cut over 10% of its workforce and consolidated certain facilities. These moves lowered its expenses by at least $250 million in the latest year....
SYMANTEC CORP. $17 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 806.2 million; Market cap: $13.7 billion; Price-to-sales ratio: 2.3; No dividends paid; WSSF Rating: Average) makes software that protects computers from viruses and intruders. Computer sales have risen with the recent launch of Microsoft’s Windows 7 operating system. Symantec has deals to pre-install its Norton Anti-Virus software on new computers, so it stands to gain as more consumers buy new computers to get Windows 7. As well, the company has shifted its focus to selling services to its business customers. Long-term service contracts give Symantec more predictable revenue streams, and cut its risk. In Symantec’s third quarter, which ended January 1, 2010, its earnings before one-time items fell 7.4%, to $326.0 million from $352.0 million a year earlier. Earnings per share fell 4.8%, to $0.40 from $0.42, on fewer shares outstanding. Revenue rose 0.8%, to $1.55 billion from $1.54 billion. Symantec gets about half of its revenue from outside the U.S. If you adjust for foreign-exchange rates, revenue would have fallen by 3%....
ADOBE SYSTEMS INC. $35 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.1 million; Market cap: $18.3 billion; Price-to-sales ratio: 6.0; No dividends paid since June 2005; WSSF Rating: Average) makes Abode Acrobat, which lets users easily create, edit and share electronic documents in the popular PDF format. As well, graphic designers use Adobe’s Creative Suite of programs to create web pages and print publications. The company also makes Adobe Flash. This program lets web sites display graphics and animation. In October 2009, Adobe completed its $1.8-billion purchase of Omniture Inc., which makes software that measures and analyzes web-site traffic. Adobe will sell this software to its customers, who can use the information it provides to improve their web pages and increase their online ad revenues. Omniture will add around $335 million a year to Adobe’s revenue. Adobe earned $814.7 million, or $1.54 a share, in the year ended November 27, 2009. That’s down 28.3% from $1.1 billion, or $2.07 a share, in the prior year. These figures exclude several unusual items, including costs related to the Omniture purchase. Revenue fell 17.7%, to $2.9 billion from $3.6 billion....
MICROSOFT CORP. $29 (Nasdaq symbol MSFT; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 8.8 billion; Market cap: $255.2 billion; Price-to-sales ratio: 4.2; Dividend yield: 1.8%; WSSF Rating: Above Average) is the world’s largest software company. Its Windows operating system runs 90% of the world’s computers. As well, the company’s Office suite of programs dominates the business-software field. Together, Windows and Office account for 60% of Microsoft’s revenue and 80% of its earnings. Microsoft is working to cut its reliance on Windows and Office. For example, its new 10-year alliance with Internet search provider Yahoo! Inc. (Nasdaq symbol YHOO) will help both companies increase their share of the online advertising market. In Microsoft’s second quarter, which ended December 31, 2009, it earned $6.7 billion, or $0.74 a share. That’s up 59.6% from $4.2 billion, or $0.47 a share, a year earlier. Revenue rose 14.4%, to $19.0 billion from $16.6 billion. The company spends around 11% of its revenue on research....
YUM! BRANDS INC. $34 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 469.3 million; Market cap: $16.0 billion; Price-to-sales ratio: 1.5; Dividend yield: 2.5%; WSSF Rating: Average) operates over 37,000 restaurants in more than 110 countries. It has five main banners: KFC (fried chicken), Pizza Hut, Taco Bell (Mexican food), A&W (hamburgers) and Long John Silver’s (seafood). Yum’s sales rose 20.6%, from $9.3 billion in 2005 to $11.3 billion in 2008. In 2009, sales fell 4.1%, to $10.8 billion. That’s mainly because of the negative impact of exchange rates. If you exclude exchange rates, sales would have risen by 1%. Same-store sales in 2009 fell 1% in China and 5% in the U.S., but rose 1% in Yum’s other overseas markets. Earnings rose 40.6%, from $762 million in 2005 to $1.1 billion in 2009. Earnings per share rose 73.4%, from $1.28 in 2005 to $2.22 in 2009, on fewer shares outstanding. If you exclude unusual items, per-share earnings would have risen 70.9%, from $1.27 in 2005 to $2.17 in 2009....