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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ENERFLEX LTD. $11.23 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 79.0 million; Market cap: $924.9 million; Dividend yield: 3.0%) rents and sells equipment and services for natural gas production, including compression and processing plants, refrigeration gear and power generators.
On June 30, 2014, the company closed its $431- million U.S. acquisition of two businesses owned by privately held Axip Energy Services: an international contract compression and processing subsidiary and a division that provides aftermarket services.
In the three months ended June 30, 2015, Enerflex’s revenue fell 8.3%, to $389.7 million from $424.9 million a year earlier. But earnings per share more than doubled, to $0.34 from $0.15. International contributions from the Axip businesses pushed up earnings and almost offset weaker revenue in the U.S. and Canada. However, falling oil and gas prices are now hurting the company’s orders.
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On June 30, 2014, the company closed its $431- million U.S. acquisition of two businesses owned by privately held Axip Energy Services: an international contract compression and processing subsidiary and a division that provides aftermarket services.
In the three months ended June 30, 2015, Enerflex’s revenue fell 8.3%, to $389.7 million from $424.9 million a year earlier. But earnings per share more than doubled, to $0.34 from $0.15. International contributions from the Axip businesses pushed up earnings and almost offset weaker revenue in the U.S. and Canada. However, falling oil and gas prices are now hurting the company’s orders.
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TOROMONT INDUSTRIES LTD. $36.75 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667- 5511; www.toromont.com; Shares outstanding: 77.6 million; Market cap: $2.9 billion; Dividend yield: 1.9%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. It also makes refrigeration systems through its CIMCO division.
The company completed the spinoff of Enerflex Ltd. (see right) in 2011. Shareholders received shares of both the new Toromont Industries and Enerflex.
In the quarter ended June 30, 2015, Toromont’s revenue rose 16.6%, to $484.5 million from $415.6 million a year earlier. Earnings gained 26.1%, to $36.4 million, or $0.47 a share, from $28.9 million or $0.37.
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The company completed the spinoff of Enerflex Ltd. (see right) in 2011. Shareholders received shares of both the new Toromont Industries and Enerflex.
In the quarter ended June 30, 2015, Toromont’s revenue rose 16.6%, to $484.5 million from $415.6 million a year earlier. Earnings gained 26.1%, to $36.4 million, or $0.47 a share, from $28.9 million or $0.37.
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SYMANTEC CORP. $21.86 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527- 8000; www.symantec.com; Shares outstanding: 680.7 million; Market cap: $14.8 billion; Dividend yield: 2.7%) sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers.
In 2014, Symantec said it would split into two publicly traded firms. One would keep the Symantec name and focus on antivirus and security software and services. The other, called Veritas Technologies, would consist of the company’s information management business, which makes products for data backup and recovery.
However, Symantec has now decided to sell Veritas to a group of private investors for $8.0 billion. It expects to close the deal on January 1, 2016.
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In 2014, Symantec said it would split into two publicly traded firms. One would keep the Symantec name and focus on antivirus and security software and services. The other, called Veritas Technologies, would consist of the company’s information management business, which makes products for data backup and recovery.
However, Symantec has now decided to sell Veritas to a group of private investors for $8.0 billion. It expects to close the deal on January 1, 2016.
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CAMECO CORP. $18.16 (Toronto symbol CCO; TSINetwork Rating: Extra Risk) (306-956-6200; www.cameco.com; Shares outstanding: 395.8 million; Market cap: $7.3 billion; Dividend yield 2.2%) has rebounded 10.8% after falling to $16.73 on July 17, 2015. That’s partly because Japan’s Kyushu Electric Power Company has restarted one of its nuclear reactors. This is the first nuclear station to restart since the country’s government shut them all down after the March 2011 earthquake and tsunami damaged the Fukushima plant, allowing radiation to escape. Kyushu plans to restart a second reactor in October.
Japan’s return to nuclear power likely won’t spur uranium prices, at least in the short term. That’s because the country’s power companies will have to use up their large inventories before buying more.
However, uranium’s long-term outlook is bright, particularly as China and India plan to build 93 new reactors by 2040.
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Japan’s return to nuclear power likely won’t spur uranium prices, at least in the short term. That’s because the country’s power companies will have to use up their large inventories before buying more.
However, uranium’s long-term outlook is bright, particularly as China and India plan to build 93 new reactors by 2040.
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TEMPUR SEALY $78.04 (New York symbol TPX; TSINetwork Rating: Speculative) (800-878-8889; www.tempursealy.com; Shares outstanding: 61.9 million; Market cap: $4.8 billion; No dividends paid) has been forced to make changes to its management and board of directors after activist investor H Partners Management, which holds 10% of Tempur Sealy’s shares, won the support of enough investors at the company’s May 8, 2015, annual meeting.
H Partners believes Tempur Sealy has performed poorly compared to other mattress makers since it acquired rival Sealy in March 2013.
After the meeting, chief executive officer Marc Sarvaray, chairman P. Andrews McLane and board director Christopher Mastro resigned. H Partners executive Usman Nabi took Mastro’s spot on the board. Timothy Yaggi, Tempur Sealy’s current chief operating officer, became interim CEO as a search committee made up of Nabi and three independent directors looks for a replacement for Sarvaray. Board member Frank Doyle became chairman.
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H Partners believes Tempur Sealy has performed poorly compared to other mattress makers since it acquired rival Sealy in March 2013.
After the meeting, chief executive officer Marc Sarvaray, chairman P. Andrews McLane and board director Christopher Mastro resigned. H Partners executive Usman Nabi took Mastro’s spot on the board. Timothy Yaggi, Tempur Sealy’s current chief operating officer, became interim CEO as a search committee made up of Nabi and three independent directors looks for a replacement for Sarvaray. Board member Frank Doyle became chairman.
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AIMIA INC. $12.27 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-897-6800; www.aimia.com; Shares outstanding: 160.8 million; Market cap: $2.0 billion; Dividend yield: 6.2%) has announced that its members can now earn and redeem points for travel on Brazilian airline Avianca. This brings Aeroplan’s total number of airline partners to 34.
Avianca offers 200 daily flights to 23 cities throughout Brazil, operating from its main hub at São Paulo-Guarulhos International Airport.
Aimia is a buy.
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Avianca offers 200 daily flights to 23 cities throughout Brazil, operating from its main hub at São Paulo-Guarulhos International Airport.
Aimia is a buy.
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AGT FOOD & INGREDIENTS $29.79 (Toronto symbol AGT; TSINetwork Rating: Extra Risk) (306-525-4490; www.alliancegrain.com; Shares outstanding: 23.1 million; Market cap: $684.0 million; Dividend yield: 2.0%) earned $0.44 a share in the three months ended June 30, 2015, up 2.3% from $0.43 a year earlier.
Revenue gained 5.1%, to $378.2 million from $359.8 million. The gains came from recent acquisitions and higher processing activity.
AGT continues to benefit from its plan to focus on more-profitable products, such as ingredients and packaged foods, as opposed to simply cleaning, splitting and bagging bulk crops. Food makers use these ingredients in products such as baked goods, soups and beverages, as well as pet food and animal feed.
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Revenue gained 5.1%, to $378.2 million from $359.8 million. The gains came from recent acquisitions and higher processing activity.
AGT continues to benefit from its plan to focus on more-profitable products, such as ingredients and packaged foods, as opposed to simply cleaning, splitting and bagging bulk crops. Food makers use these ingredients in products such as baked goods, soups and beverages, as well as pet food and animal feed.
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CHEMTRADE LOGISTICS INCOME FUND $18.83 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics.com; Units outstanding: 69.0 million; Market cap: $1.3 billion; Dividend yield: 6.3%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base metal processors, whose operations create sulphur, acid and other by-products. Chemtrade converts these substances into useful chemicals, like sulphuric acid.
In the three months ended June 30, 2015, Chemtrade’s revenue rose 9.3%, to $338.8 million from $310.1 million a year earlier. The gain mainly came from the higher U.S. dollar, which increased the contribution from its operations in that country.
The trust’s overall cash flow rose 5.3%, to $47.0 million from $44.6 million, but cash flow per share declined 8.1%, to $0.68 from $0.74, on more shares outstanding.
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In the three months ended June 30, 2015, Chemtrade’s revenue rose 9.3%, to $338.8 million from $310.1 million a year earlier. The gain mainly came from the higher U.S. dollar, which increased the contribution from its operations in that country.
The trust’s overall cash flow rose 5.3%, to $47.0 million from $44.6 million, but cash flow per share declined 8.1%, to $0.68 from $0.74, on more shares outstanding.
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INTACT FINANCIAL $92.22 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $12.2 billion; Dividend yield: 2.3%) is Canada’s largest provider of property and casualty insurance. Its brands include Intact Insurance, Canada BrokerLink and belairdirect.
In the three months ended June 30, 2015, Intact’s revenue rose 6.0%, to $2.34 billion from $2.21 billion a year earlier. Revenue improved across all of the company’s insurance lines and geographic regions. Its $197-million acquisition of Canadian Direct Insurance in early 2015 also added to its sales. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C.
Earnings rose 1.9%, to $210 million, or $1.56 a share, from $206 million, or $1.53. Intact continues to write more-profitable insurance policies and cut its operating costs.
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In the three months ended June 30, 2015, Intact’s revenue rose 6.0%, to $2.34 billion from $2.21 billion a year earlier. Revenue improved across all of the company’s insurance lines and geographic regions. Its $197-million acquisition of Canadian Direct Insurance in early 2015 also added to its sales. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C.
Earnings rose 1.9%, to $210 million, or $1.56 a share, from $206 million, or $1.53. Intact continues to write more-profitable insurance policies and cut its operating costs.
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RESTAURANT BRANDS INTERNATIONAL $42.61 (New York symbol QSR; TSINetwork Rating: Average) (905-845-6511; www.rbi.com; Shares outstanding: 467.0 million; Market cap: $19.9 billion; Dividend yield: 1.1%) is the world’s thirdlargest fast-food operator, after McDonald’s and Yum Brands, with 14,528 Burger King outlets and 4,776 Tim Hortons locations.
In the three months ended June 30, 2015, the company earned $142.7 million, up 27.3% from $112.1 million a year earlier.
Earnings per share gained 25.0%, to $0.30 from $0.24, on more shares outstanding. Overall sales fell 1.6%, to $1.04 billion from $1.06 billion. That’s because the high U.S. dollar hurt the contribution from Restaurant Brands’ overseas operations.
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In the three months ended June 30, 2015, the company earned $142.7 million, up 27.3% from $112.1 million a year earlier.
Earnings per share gained 25.0%, to $0.30 from $0.24, on more shares outstanding. Overall sales fell 1.6%, to $1.04 billion from $1.06 billion. That’s because the high U.S. dollar hurt the contribution from Restaurant Brands’ overseas operations.
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