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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HECLA MINING COMPANY $2.27 (New York symbol HL; TSINetwork Rating: Extra Risk) (208-769- 4100; www.hecla-mining.com; Shares o/s: 377.7 million; Market cap: $910.3 million; Dividend yield: 0.4%) explores for, mines and processes silver and gold in the U.S. and Mexico. Most of the company’s silver output comes from its Greens Creek mine in Alaska and its Lucky Friday project in Idaho. Hecla’s Casa Berardi mine in Quebec supplies the majority of its gold production.
In the three months ended June 30, 2015, Hecla produced 2.48 million ounces of silver, down 1.5% from 2.52 million ounces a year earlier. Gold output rose 2.6%, to 44,692 ounces from 43,554. Cash flow per share fell 33.3%, to $0.06 from $0.09, on the lower silver production and prices.
The company aims to begin production at its San Sebastian project in Mexico early next year. The mine, which last operated between 2001 and 2005, is forecast to produce 8 million ounces of silver equivalent in its first two years from easily mined surface deposits. San Sebastian then has the potential to further expand its reserves.
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In the three months ended June 30, 2015, Hecla produced 2.48 million ounces of silver, down 1.5% from 2.52 million ounces a year earlier. Gold output rose 2.6%, to 44,692 ounces from 43,554. Cash flow per share fell 33.3%, to $0.06 from $0.09, on the lower silver production and prices.
The company aims to begin production at its San Sebastian project in Mexico early next year. The mine, which last operated between 2001 and 2005, is forecast to produce 8 million ounces of silver equivalent in its first two years from easily mined surface deposits. San Sebastian then has the potential to further expand its reserves.
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ATLANTIC TELE-NETWORK $79.45 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340-777-8000; www.atni.com; Shares outstanding: 16.4 million; Market cap: $1.3 billion; Dividend yield: 1.6%) is mainly focused on growing in the U.S., but it has just expanded further in the Caribbean. The company already has operations in Guyana, Bermuda and parts of the Caribbean islands.
Atlantic Tele-Network just agreed to pay $145 million for the Innovative group of companies, which operate cable TV, Internet and land-line services, primarily in the U.S. Virgin Islands and St. Maarten.
To put the acquisition in perspective, Innovative’s annual revenue is about $110 million. In the three months ended June 30, 2015, Atlantic’s revenue was $90.3 million, up 8.5%, from $83.3 million a year earlier.
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Atlantic Tele-Network just agreed to pay $145 million for the Innovative group of companies, which operate cable TV, Internet and land-line services, primarily in the U.S. Virgin Islands and St. Maarten.
To put the acquisition in perspective, Innovative’s annual revenue is about $110 million. In the three months ended June 30, 2015, Atlantic’s revenue was $90.3 million, up 8.5%, from $83.3 million a year earlier.
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COLLIERS INTERNATIONAL GROUP $54.56 (Toronto symbol CIG ; TSINetwork Rating: Extra Risk) (1-202-695-4200; www.colliers.com; Shares outstanding: 36.6 million; Market cap: $2.1 billion; Dividend yield: 0.2%) is one of the world’s top three commercial real estate firms, offering a range of services in the U.S., Canada, Europe, Australia, New Zealand, Asia and Latin America.
The company has 16,300 employees operating from 502 offices in 67 countries.
In the three months ended June 30, 2015, Colliers’ revenue rose 11.2%, to $409.8 million from $368.5 million a year earlier (all figures except share price and market cap in U.S. dollars). If you exclude one-time items, the company’s earnings gained 31.8%, to $0.58 a share from $0.44 a share. These results do not include FirstService.
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The company has 16,300 employees operating from 502 offices in 67 countries.
In the three months ended June 30, 2015, Colliers’ revenue rose 11.2%, to $409.8 million from $368.5 million a year earlier (all figures except share price and market cap in U.S. dollars). If you exclude one-time items, the company’s earnings gained 31.8%, to $0.58 a share from $0.44 a share. These results do not include FirstService.
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FIRSTSERVICE CORP. $43.10 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 34.6 million; Market cap: $1.6 billion; Dividend yield: 1.2%) completed the spinoff of its Colliers International subsidiary (see below) on June 2, 2015, by handing out Colliers shares to its investors. Shareholders only become liable for capital gains taxes on the transaction when they sell their FirstService or Colliers shares.
Now that the spinoff is complete, FirstService is carrying on with its residential property management and property-improvement operations. In the three months ended June 30, 2015, First- Service’s revenue gained 11.7%, to $326.3 million from $292.2 million a year earlier (all figures except share price and market cap in U.S. dollars). If you set aside one-time items, earnings per share jumped 37.9%, to $0.40 from $0.29. These results exclude Colliers.
The spinoff adds to FirstService’s appeal. In our experience, and in most academic studies of the subject, both the parent and spinoff generally do better than comparable firms for at least several years after they split.
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Now that the spinoff is complete, FirstService is carrying on with its residential property management and property-improvement operations. In the three months ended June 30, 2015, First- Service’s revenue gained 11.7%, to $326.3 million from $292.2 million a year earlier (all figures except share price and market cap in U.S. dollars). If you set aside one-time items, earnings per share jumped 37.9%, to $0.40 from $0.29. These results exclude Colliers.
The spinoff adds to FirstService’s appeal. In our experience, and in most academic studies of the subject, both the parent and spinoff generally do better than comparable firms for at least several years after they split.
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CHESAPEAKE ENERGY $7.87 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chk.com; Shares outstanding: 665.4 million; Market cap: $5.5 billion; No dividends paid) stopped paying dividends earlier this year to conserve cash in the face of low oil and gas prices. The cut will save Chesapeake $240 million annually.
Now the company has announced that it is laying off 740 employees, or 15% of its workforce. About 560 of these workers are from its headquarters in Oklahoma City. Chesapeake will incur a one-time charge of $55.5 million for the layoffs.
Meanwhile, the company expects its output to rise 1% to 3% in 2015, to an average of 640,000 to 650,000 barrels of oil a day. The stock trades at just 2.1 times Chesapeake’s annual cash flow of $3.68 a share, based on the latest quarter.
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Now the company has announced that it is laying off 740 employees, or 15% of its workforce. About 560 of these workers are from its headquarters in Oklahoma City. Chesapeake will incur a one-time charge of $55.5 million for the layoffs.
Meanwhile, the company expects its output to rise 1% to 3% in 2015, to an average of 640,000 to 650,000 barrels of oil a day. The stock trades at just 2.1 times Chesapeake’s annual cash flow of $3.68 a share, based on the latest quarter.
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CIMAREX ENERGY $114.82 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 94.5 million; Market cap: $10.9 billion; Dividend yield: 0.6%) produces and explores for natural gas and oil. Gas makes up 64% of the company’s output; the remaining 36% is oil.
Cimarex’s properties are mostly in the Wolfcamp shale area of the Permian Basin in Texas and New Mexico, as well as the Cana-Woodford shale region in western Oklahoma.
In the three months ended June 30, 2015, the company’s production averaged 1.03 billion cubic feet of natural gas equivalent a day, up 22.4% from 838.7 million cubic feet a year earlier.
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Cimarex’s properties are mostly in the Wolfcamp shale area of the Permian Basin in Texas and New Mexico, as well as the Cana-Woodford shale region in western Oklahoma.
In the three months ended June 30, 2015, the company’s production averaged 1.03 billion cubic feet of natural gas equivalent a day, up 22.4% from 838.7 million cubic feet a year earlier.
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DEVON ENERGY CORP. $43.90 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235- 3611; www.dvn.com; Shares outstanding: 411.0 million; Market cap: $18.8 billion; Dividend yield: 2.2%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 40% gas and 60% oil.
The company narrowed its focus with its July 2014 sale of some of its properties to Linn Energy for $2.3 billion. The deal included holdings in the Rockies, the onshore Gulf Coast and the Mid-Continent region (which includes Oklahoma, Kansas and Texas).
The sale let Devon focus on what it views as low risk/ high-reward properties, especially the oil producing assets it bought in Texas’s Eagle Ford shale formation for $6.0 billion in 2013.
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The company narrowed its focus with its July 2014 sale of some of its properties to Linn Energy for $2.3 billion. The deal included holdings in the Rockies, the onshore Gulf Coast and the Mid-Continent region (which includes Oklahoma, Kansas and Texas).
The sale let Devon focus on what it views as low risk/ high-reward properties, especially the oil producing assets it bought in Texas’s Eagle Ford shale formation for $6.0 billion in 2013.
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MITEL NETWORKS $10.54 (Toronto symbol MNW; TSINetwork Rating: Extra Risk)(613- 592-2122; www.mitel.ca; Shares outstanding: 120.2 million; Market cap: $1.3 billion; No dividends paid) recently jumped after activist investor Elliott Management disclosed stakes in Mitel and Polycom Inc. (symbol PLCM on Nasdaq).
Elliott is urging the companies to merge to increase their combined profits in a very competitive market. The firm now holds 6.6% of Polycom and 6.3% of Mitel.
Mitel develops products centred on business telephone systems. Polycom makes business communications systems that combine data, video and voice in one product. It also makes teleconferencing systems.
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Elliott is urging the companies to merge to increase their combined profits in a very competitive market. The firm now holds 6.6% of Polycom and 6.3% of Mitel.
Mitel develops products centred on business telephone systems. Polycom makes business communications systems that combine data, video and voice in one product. It also makes teleconferencing systems.
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ACI WORLDWIDE $22.54 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative)(402-390-7600; www.tsainc.com; Shares outstanding: 117.8 million; Market cap: $2.7 billion; No dividends paid) makes software for processing transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. The company’s products also help cut fraud.
In the three months ended June 30, 2015, ACI’s revenue rose 4.3% to $265.8 million from $254.8 million a year earlier. Earnings jumped to $30.0 million, or $0.26 a share, from $14.0 million, or $0.12. Cost cuts were the main reason for the higher profits.
ACI is benefiting from the introduction of technology for the shift to chip-and-PIN debit and credit cards, which sped up with the EMV (EuroPay, Master- Card and VISA) payment networks’ liability shift, which came into effect in the U.S. on October 1, 2015.
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In the three months ended June 30, 2015, ACI’s revenue rose 4.3% to $265.8 million from $254.8 million a year earlier. Earnings jumped to $30.0 million, or $0.26 a share, from $14.0 million, or $0.12. Cost cuts were the main reason for the higher profits.
ACI is benefiting from the introduction of technology for the shift to chip-and-PIN debit and credit cards, which sped up with the EMV (EuroPay, Master- Card and VISA) payment networks’ liability shift, which came into effect in the U.S. on October 1, 2015.
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CHIPOTLE MEXICAN GRILL $665.67 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.1 million; Market cap: $22.0 billion; No dividends paid) has hired Curt Garner as its first chief information officer. The company hopes Garner will improve its mobile presence, including the ability to order and pay through smartphones and tablets.
Mobile apps have already paid off very successfully for fast-food and fast-casual chains like Domino’s, Panera Bread, Starbucks and Taco Bell.
Previously, Garner spent 20 years at Starbucks in various technology roles, including CIO. The coffee chain recently finished rolling out its mobile ordering and payment app at its more than 7,400 U.S. outlets.
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Mobile apps have already paid off very successfully for fast-food and fast-casual chains like Domino’s, Panera Bread, Starbucks and Taco Bell.
Previously, Garner spent 20 years at Starbucks in various technology roles, including CIO. The coffee chain recently finished rolling out its mobile ordering and payment app at its more than 7,400 U.S. outlets.
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