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.
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RTX CORP. $192 is a buy. The company (New York symbol RTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.3 billion; Market cap: $249.6 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.rtx.com) took its current form in 2020 through the merger of United Technologies and Raytheon.
On top of that, Restaurant Brands has increased its dividend each year for the past 10 years. The current annual rate of $2.60 yields a solid 3.5%.
ABB LTD. (ADR) $87 is a buy. This Swiss-based company (Over-the-counter Pink Sheets symbol ABBNY; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.8 billion; Market cap: $156.6 billion; Price-to-sales ratio: 5.1; Dividend yield: 1.4%; TSINetwork Rating: Above Average; www.abb.com) is a leading maker of electrical transformers, transmission systems and circuit breakers for electrical utilities.
It will probably take at least a year before Visa can begin processing domestic transactions in China.
EBAY INC. $123 is a buy. The company (Nasdaq symbol EBAY; Aggressive Growth Portfolio; Finance sector; Shares outstanding: 445.0 million; Market cap: $54.7 billion; Price-to-sales ratio: 4.2; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.ebay.com) operates online auction websites in over 190 countries that let users buy and sell a wide variety of goods.
The company launched Walmart+ service in September 2020, when many shoppers were trying to avoid stores because of COVID-19.
Even after these facilities are up and running, Cisco will continue to benefit from ongoing upgrades needed to handle new and faster AI models. The company also typically bundles its hardware with its cybersecurity software. The result is strong recurring revenue that cuts its risk.
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. TP—Take Profits; these are more aggressive stocks that have given us a quick return and we therefore recommend investors lock in a gain by selling all or part of their holdings. That also frees up cash for new investment in our Power Buys.