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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Growth Stocks Library Archives
Understanding our recommendations: Power Buy—These stocks are our top choices for new buying now. We feel each currently offers the best combination of fundamentals (earnings, sales, cash flow and so on) plus external factors (industry trends and the current share price) to give it a chance of above-average gains. Buy—high-quality stocks with strong growth prospects. However, they are likely to grow at a slower rate than our Power Buys. Sell—these are stocks that no longer inspire our confidence. As Power Growth Investor focuses on maximizing profits for aggressive investors, we prefer to sell poorly performing stocks instead of holding them and waiting for a rebound.
You should remain wary of stocks that attract broker/media attention because of high-profile products or services, and their business models. Here’s a closer look at one stock with risks that prospective investors should take into consideration:
ALLBIRDS INC., $4.09, (Nasdaq symbol BIRD; TSINetwork Rating: Extra Risk) (allbirds.com; Shares o/s: 8.2 million; Market cap: $33.7 million; No dividends paid) is a global “lifestyle” brand that aims to make more sustainable footwear and apparel products without the use of synthetic petroleum-based fibres like polyester.
ALLBIRDS INC., $4.09, (Nasdaq symbol BIRD; TSINetwork Rating: Extra Risk) (allbirds.com; Shares o/s: 8.2 million; Market cap: $33.7 million; No dividends paid) is a global “lifestyle” brand that aims to make more sustainable footwear and apparel products without the use of synthetic petroleum-based fibres like polyester.
Artificial intelligence (AI) is an example of an investment idea that could boost your investment returns, or, more likely, end up costing you money. All in all, we think that the biggest, surest gains from AI will come from investing in established businesses that are already profitable and growing, and that can gain all the more by applying AI to their operations.
ACI WORLDWIDE, $42.90, is a buy. The firm (Nasdaq symbol ACIW; TSINetwork Rating: Extra Risk) (Shares outstanding: 103.1 million; Market cap: $4.4 billion; No dividends paid) is the leading software provider for processing transactions by credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank systems. Its products also work to cut fraud.
RESTAURANT BRANDS INTERNATIONAL, $68.02, is a buy. The company (New York symbol QSR; TSINetwork Rating: Average) (www.rbi.com; Shares o/s: 457.2 million; Market cap: $31.1 billion; Dividend yield: 3.7%) gives you exposure to the world’s third-largest fast-food operator. That’s after McDonald’s (No. 1) and Yum Brands (No. 2). The company has outlets in over 100 countries, comprised of Burger King, Tim Hortons (coffee and donuts), Popeyes Louisiana Kitchen (fried chicken) and Firehouse Subs locations.
AMAZON.COM INC., $231.31, remains a buy. The company (Nasdaq symbol AMZN; TSINetwork Rating: Average) (www.amazon.com; Shares outstanding: 10.7 billion; Market cap: $2.5 trillion; No dividends paid) now plans to spend $35 billion across its businesses in India over a five-year period.
ADOBE INC., $294.23, is a buy. The company (Nasdaq symbol ADBE; TSINetwork Rating: Average) (www.adobe.com; Shares outstanding: 418.5 million; Market cap: $120.8 billion; No dividends paid) is now spending $1.9 billion to acquire Semrush Holdings (symbol SEMR on Nasdaq).
EXPEDIA GROUP INC., $271.56, is a buy. The stock (Nasdaq symbol EXPE; TSINetwork Rating: Average) (www.expediagroup.com; Shares outstanding: 142.6 million; Market cap: $33.3 billion; Dividend yield: 0.6%) continues to trade near all-time highs for our subscribers.
TOROMONT INDUSTRIES LTD. $171 (www.toromont.com) is a buy. The company distributes bulldozers, backhoe loaders and drills, mainly in eastern Canada and the U.S. It also makes refrigeration systems. The stock has gained 50% in the past year as new infrastructure projects in Ontario and Quebec are spurring demand for Toromont’s heavy equipment. The stock trades at 25.0 times the projected 2026 earnings of $6.84 a share; that’s an acceptable p/e in light of the company’s strong reputation and high market share. Toromont is a buy.
THOMSON REUTERS CORP. $177 is a buy for long-term gains. The company (Toronto symbol TRI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 450.5 million; Market cap: $79.7 billion; Price-to-sales ratio: 7.7; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.thomsonreuters.com) sells specialized information (mainly through electronic channels) to professionals in the legal, and tax and accounting fields. It also owns the Reuters news service.