Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

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

Growth Stocks

E-commerce gains just add to your prospects

Loblaw investors saw its e-commerce revenue top $1 billion in 2019. That’s almost double the retailer’s 2018 revenue, yet it represents just 2% of annual sales. The impressive growth online highlights the expanding prospects for investors but also Loblaw’s success in adapting to rapidly changing consumer demands and the proliferation of online competitors.

The company’s own online presence includes new services such as home ordering and in-store pickup or delivery....

2 min read

Pat McKeough

Growth Stocks

Its outlook will boost your 57% gain

FAIR ISAAC CORP. $390 is a buy, but only for highly aggressive investors. The company (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 28.9 million; Market cap: $11.3 billion; Price-to-sales ratio: 9.5; Dividend suspended June 2017; TSINetwork Rating: Average; www.fico.com) is best known for its FICO Scores software....

1 min read

Pat McKeough

Growth Stocks

Investors should profit from their smaller size

These two industrial giants are aggressively shrinking their operations. That should improve their outlook as investors tend to prefer smaller, easier-to-understand businesses. Even so, we prefer ABB over GE for your new buying.

ABB LTD. ADRs $22 is a buy. The stock (New York symbol ABB; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs o/s: 2.1 billion; Market cap: $46.2 billion; P.S....

2 min read

Pat McKeough

Growth Stocks

These four offer investors healthy returns

Consumers continue to shift to more-healthful foods with less sugar and salt. That has forced many makers of packaged foods to improve the quality of their products—and so protect value for investors. Industry leaders are also using acquisitions to bolster their current offerings....

5 min read

Pat McKeough

Growth Stocks

Both these growth paths lead you to profits

We’ve said for a long time that growth by acquisition is inherently riskier than internal growth since it carries an above-average chance of unpleasant surprises. That’s because a buyer of something rarely knows as much about it as the seller.

Still, some companies do it a lot better than others—and successfully integrating acquisitions can spur strong growth and share-price jumps for their investors.

Stantec’s strategy of making small acquisitions is safer than making big purchases because any mistakes tend to be smaller....

2 min read

Pat McKeough

Growth Stocks

ResMed’s wider revenue stream will add to your 76% return

When a company moves into a new and exciting area, it can provide even more of a catalyst for strong investor returns. Here’s a stock using data it gathers to generate a new revenue stream and more. We think it will let you build on its 76% gain over the last year.

RESMED INC....

1 min read

Pat McKeough

Growth Stocks

Your 52% and 138% gains make these buys

Long-time readers know that we are constantly keeping you up to date on important news affecting the stocks we cover. And, of course, we also aim to highlight stocks with especially bright outlooks for TSI Power Growth Investors. Here are two buys that stand out this month:

CALIAN GROUP $47.00 (Toronto symbol CGY; TSINetwork Rating: Speculative) (613-599-8600; www.calian.com; Shares outstanding: 8.0 million; Market cap: $377.6 million; Dividend yield: 2.4%) has two main opertions: Business and Technology Services (contributing 70% of revenue) provides engineers, health-care workers and other skilled professionals on a contract basis; and Systems Engineering (30% of revenue) sells hardware and software for satellite and other communications systems.

In the quarter ended December 31, 2019, Calian’s revenue jumped 24.1%, to $99.2 million from $79.9 million a year earlier....

2 min read

Pat McKeough

Growth Stocks

Here’s a Power Buy with a Google pedigree

Rising employee healthcare costs are prompting many large employers to actively take steps to stem the flow of money they spend on employee medical costs. Primary care can be an effective cost-cutting tool, by helping patients better manage chronic diseases and keeping them out of more-expensive care settings like emergency rooms or urgent-care centres.

On January 31, 2020, 1Life sold 7.5 million shares of its stock to IPO investors at $14 a share....

1 min read

Pat McKeough

Growth Stocks

Tap these key trends for big returns

Alcon offers investors two exciting ways to profit. Not only does it give you exposure to rapidly expanding, worldwide demand for its contact lenses and cataract surgery products, but its global operations and technological leadership enhance the possibility of it attracting a lucrative takeover bid....

3 min read

Pat McKeough

Growth Stocks

Thomson investors will like this deal

THOMSON REUTERS CORP. $108 remains a buy. The company (Toronto symbol TRI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares o/s: 500.0 million; Market cap: $54.0 billion; Price-to-sales ratio: 9.2; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.thomsonreuters.com) continues to unlock value for investors....

1 min read

Pat McKeough

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Chuck Chakrapani, PhD
Investors Association of Canada
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Subscriber since 1996. Inner Circle Member Since 2006
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Inner Circle Pro subscriber

Browse Premium Topics

Cannabis

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.