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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WYNDHAM WORLDWIDE $77.38 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 116.1 million; Market cap: $8.9 billion; Dividend yield: 2.2%) has now added all of its hotel rooms to the TripAdvisor Instant Booking platform. With Instant Booking, travellers click on the “Book on TripAdvisor” button to set up a reservation.
TripAdvisor is the world’s largest travel site. It reaches over 340 million unique visitors a month and has more than 225 million traveller reviews and opinions. It launched its Instant Booking platform in the U.S. in June 2014 and has since expanded it to the U.K., with other international markets to follow.
Wyndham Worldwide is a hold.
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TripAdvisor is the world’s largest travel site. It reaches over 340 million unique visitors a month and has more than 225 million traveller reviews and opinions. It launched its Instant Booking platform in the U.S. in June 2014 and has since expanded it to the U.K., with other international markets to follow.
Wyndham Worldwide is a hold.
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GOODYEAR TIRE & RUBBER CO. $33.45 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 268.9 million; Market cap: $8.7 billion; Dividend yield: 0.8%) is the world’s largest tire maker, with 52 plants in 22 countries.
In the three months ended September 30, 2015, Goodyear’s revenue fell 10.2%, to $4.18 billion from $4.66 billion a year earlier. The rising U.S. dollar cut the value of the company’s foreign sales (particularly in Europe and Brazil) by $430 million.
Earnings rose 12.0%, to $271.0 million, or $0.99 a share. A year earlier, the company earned $242.0 million, or $0.87 a share.
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In the three months ended September 30, 2015, Goodyear’s revenue fell 10.2%, to $4.18 billion from $4.66 billion a year earlier. The rising U.S. dollar cut the value of the company’s foreign sales (particularly in Europe and Brazil) by $430 million.
Earnings rose 12.0%, to $271.0 million, or $0.99 a share. A year earlier, the company earned $242.0 million, or $0.87 a share.
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DELPHI ENERGY $0.72 (Toronto symbol DEE; TSINetwork Rating: Speculative)(403- 265-6171; www.delphienergy.ca; Shares outstanding: 155.5 million; Market cap: $110.4 million; No dividends paid) develops, produces and explores for oil and natural gas. About 70% of its output is gas; the remaining 30% is oil.
In the three months ended September 30, 2015, Delphi’s production fell 16.6%, to 7,888 barrels of oil equivalent a day from 9,461 a year earlier, after the company sold some fields. The lower output and a 31.4% average decline in oil and gas prices cut cash flow per share to $0.06 from $0.09.
The company will need improved oil and gas prices to move significantly higher, but its long-term outlook is positive.
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In the three months ended September 30, 2015, Delphi’s production fell 16.6%, to 7,888 barrels of oil equivalent a day from 9,461 a year earlier, after the company sold some fields. The lower output and a 31.4% average decline in oil and gas prices cut cash flow per share to $0.06 from $0.09.
The company will need improved oil and gas prices to move significantly higher, but its long-term outlook is positive.
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ALAMOS GOLD $3.97 (Toronto symbol AGI; TSINetwork Rating: Speculative)(604-681-2802; www.alamosgold.com; Shares outstanding: 255.5 million; Market cap: $996.5 million; No dividends paid) is the company formed by the July 2015 merger of Alamos Gold and Stock Pickers Digest recommendation AuRico Gold.
The combined firm owns the Mulatos mine in Mexico and the Young-Davidson project in northern Ontario, which holds as much as 5.6 million ounces of gold. Young-Davidson started up in 2013 and will reach full production in 2016. But meanwhile, it’s moving from open-pit to underground mining, which has sharply increased its costs.
The company’s gold production rose 3.1% in the three months ended September 30, 2015, to 87,663 ounces from 85,037 a year earlier. However, lower gold prices offset the higher production, causing the company’s cash flow per share to fall to $0.02 from $0.16 (all figures except share price and market cap in U.S. dollars).
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The combined firm owns the Mulatos mine in Mexico and the Young-Davidson project in northern Ontario, which holds as much as 5.6 million ounces of gold. Young-Davidson started up in 2013 and will reach full production in 2016. But meanwhile, it’s moving from open-pit to underground mining, which has sharply increased its costs.
The company’s gold production rose 3.1% in the three months ended September 30, 2015, to 87,663 ounces from 85,037 a year earlier. However, lower gold prices offset the higher production, causing the company’s cash flow per share to fall to $0.02 from $0.16 (all figures except share price and market cap in U.S. dollars).
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SHERRITT INTERNATIONAL $0.79 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 293.9 million; Market cap: $226.3 million; No dividends paid) is now focused on nickel production, with operations in Cuba and Canada.
As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba.
In the three months ended September 30, 2015, the company’s revenue fell 25.3%, to $76.9 million from $102.9 million a year earlier, mostly due to lower oil and gas prices. Cash flow per share fell sharply, to $0.05 from $0.16.
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As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba.
In the three months ended September 30, 2015, the company’s revenue fell 25.3%, to $76.9 million from $102.9 million a year earlier, mostly due to lower oil and gas prices. Cash flow per share fell sharply, to $0.05 from $0.16.
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AEROPOSTALE INC. $0.68 (New York symbol ARO; TSINetwork Rating: Extra Risk)(646-485-5410; www.aeropostale.com; Shares outstanding: 79.6 million; Market cap: $53.3 million; No dividends paid) recently opened its first location in Ireland, at Dublin’s Liffey Valley Shopping Centre, one of the country’s biggest malls.
The Dublin store is operated through a licensing agreement with Shuz 4 U International Ltd. Over the next five years, Aeropostale expects to open 10 more locations in Western Europe through this partnership.
The company should be able to repeat its previous success at attracting new customers, but its sales may remain weak in the near term.
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The Dublin store is operated through a licensing agreement with Shuz 4 U International Ltd. Over the next five years, Aeropostale expects to open 10 more locations in Western Europe through this partnership.
The company should be able to repeat its previous success at attracting new customers, but its sales may remain weak in the near term.
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STUART OLSON INC. $6.89 (Toronto symbol SOX; TSINetwork Rating: Speculative) (780-454-3667; www.stuartolson.com; Shares outstanding: 26.4 million; Market cap: $181.4 million; Dividend yield: 7.0%) provides buildingconstruction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to government and private sector clients. It mainly operates in Western Canada.
In the three months ended September 30, 2015, the company’s revenue fell 19.6%, to $281.7 million from $350.4 million a year earlier. The decline came from lower activity in Alberta, including in the oil sands. Stuart Olson is also phasing out less profitable industrial projects.
Before one-time items, Stuart Olson earned $6.4 million, or $0.24 a share, up sharply from $2.8 million, or $0.11, a year earlier. That reflects the company’s continued focus on higher-profit activities. It ended the quarter with a backlog of $2.02 billion, up 6.8% from $1.89 billion.
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In the three months ended September 30, 2015, the company’s revenue fell 19.6%, to $281.7 million from $350.4 million a year earlier. The decline came from lower activity in Alberta, including in the oil sands. Stuart Olson is also phasing out less profitable industrial projects.
Before one-time items, Stuart Olson earned $6.4 million, or $0.24 a share, up sharply from $2.8 million, or $0.11, a year earlier. That reflects the company’s continued focus on higher-profit activities. It ended the quarter with a backlog of $2.02 billion, up 6.8% from $1.89 billion.
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RUSSEL METALS $19.08 (Toronto symbol RUS; TSINetwork Rating: Speculative)(905-819-7777; www.russelmetals.com; Shares outstanding: 61.7 million; Market cap: $1.2 billion; Dividend yield: 8.0%) is one of North America’s largest metal distributors, serving 39,000 clients at 53 locations in Canada and 12 in the U.S.
In the three months ended September 30, 2015, Russel’s revenue fell 25.5%, to $773.4 million from $1.04 billion a year earlier. Sales mainly declined because revenue fell 40% at the company’s energy products division, which sells pipes to oil and gas drillers.
Earnings dropped sharply, to $12.8 million, or $0.21 a share, from $33.0 million, or $0.54. The latest figure included a $2-million charge related to a more than 7% cut to the company’s workforce. Russel’s earnings fell faster than revenue because steel prices moved down in the latest quarter. That hurts its profit margins and causes it to suffer losses on its inventory.
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In the three months ended September 30, 2015, Russel’s revenue fell 25.5%, to $773.4 million from $1.04 billion a year earlier. Sales mainly declined because revenue fell 40% at the company’s energy products division, which sells pipes to oil and gas drillers.
Earnings dropped sharply, to $12.8 million, or $0.21 a share, from $33.0 million, or $0.54. The latest figure included a $2-million charge related to a more than 7% cut to the company’s workforce. Russel’s earnings fell faster than revenue because steel prices moved down in the latest quarter. That hurts its profit margins and causes it to suffer losses on its inventory.
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DOREL INDUSTRIES $30.78 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-934-3034; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.0 billion; Dividend yield: 5.1%) reports that its sales rose 0.9% in the three months ended September 30, 2015, to $679.3 million from $673.0 million a year earlier (all figures except share price and market cap in U.S. dollars).
Earnings fell 35.1%, to $0.48 a share from $0.74. However, Dorel gets half of its sales from outside the U.S., and the high U.S. dollar cut its earnings by $0.28 a share in the latest quarter. Costs related to the company’s plan to shift juvenile-product manufacturing to Asia also weighed on its earnings.
The stock trades at a low 7.9 times Dorel’s forecast 2016 earnings of $2.94 a share. It yields a high 5.1%.
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Earnings fell 35.1%, to $0.48 a share from $0.74. However, Dorel gets half of its sales from outside the U.S., and the high U.S. dollar cut its earnings by $0.28 a share in the latest quarter. Costs related to the company’s plan to shift juvenile-product manufacturing to Asia also weighed on its earnings.
The stock trades at a low 7.9 times Dorel’s forecast 2016 earnings of $2.94 a share. It yields a high 5.1%.
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STANTEC INC. $33.13 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 94.2 million; Market cap: $3.1 billion; Dividend yield: 1.3%) sells a range of consulting, project-delivery, design and technology services.
Its clients operate in a variety of industries, including oil and gas, transportation and construction.
In the three months ended September 30, 2015, Stantec’s acquisitions and the stronger U.S. dollar boosted its revenue by 14.0%, to $620.1 million from $544.2 million a year ago. However, earnings rose just 2.8%, to $49.9 million, or $0.53 a share, from $48.6 million, or $0.52. That was mostly due to the cost of integrating recently purchased firms.
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Its clients operate in a variety of industries, including oil and gas, transportation and construction.
In the three months ended September 30, 2015, Stantec’s acquisitions and the stronger U.S. dollar boosted its revenue by 14.0%, to $620.1 million from $544.2 million a year ago. However, earnings rose just 2.8%, to $49.9 million, or $0.53 a share, from $48.6 million, or $0.52. That was mostly due to the cost of integrating recently purchased firms.
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