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
CALIAN GROUP LTD., $18.26, symbol CTY on Toronto, is the new name of Calian Technologies effective today. The company will also change its stock symbol to CGY from CTY on April 5, 2016. Calian is making the name change because of its expansion into new areas such as healthcare through its Business and Technology Services unit. That subsidiary supplies 70% of Calian’s revenue and provides corporate clients with engineers, health care workers and other skilled professionals on a contract basis. The company’s Systems Engineering business (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems....
WAL-MART STORES INC., $69.06, New York symbol WMT, has successfully defeated a new law in Puerto Rico that would have tripled the tax bill for companies with local yearly revenue of $2.75 billion or higher. Wal-Mart operates 48 retail stores on the island. It is the only company that would have been affected by the law. A federal judge has now struck down the tax plan. Wal-Mart will still go ahead and shut down seven of its Puerto Rico stores. That’s part of the previously announced closure of 269 underperforming locations. Worldwide, the retailer has over 11,500 outlets....
IAMGOLD CORP., $2.76, symbol IMG on Toronto, has a joint venture with Calibre Mining (symbol CXB on Toronto) to explore the Eastern Borosi silver/gold project in Nicaragua. The partners plan to spend $1.5 million U.S. this year on a 5,500-metre drilling program. They have already completed 11,400 metres of drilling since they formed their joint venture in May 2014. The drilling results have so far included several high-grade mineral showings. They include a 12.9m drilling section that graded at a high 8.73 grams per tonne of gold and 11.5 grams per tonne of silver....
GENERAL ELECTRIC CO., $31.11, New York symbol GE, is in a strong position to profit as the U.S. government normalizes relations with Cuba. This week, the company and the Cuban government agreed to explore potential deals. For example, GE’s turbines and expertise would help modernize Cuba’s oil-fired power plants. It’s also likely the Cuban government will want to upgrade its hospitals with GE’s X-ray, MRI (magnetic resonance imaging), ultrasound machines and other medical products. OUR RECOMMENDATION: GE is a buy....
EBAY INC. $24 (Nasdaq symbol EBAY; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $28.8 billion; Price-to-sales ratio: 3.3; No dividends paid; TSINetwork Rating: Above Average; www.ebay.com) operates online auction websites in over 30 countries. Sellers pay fees to list and sell their goods through these sites. In the past few years, eBay has expanded the availability of new merchandise: new items at fixed prices now account for 80% of eBay’s total transactions. The company also operates several other popular websites, including StubHub (ticket sales for live events), Shopping.com (comparison shopping) and Rent.com (apartment and house rentals). These services are in addition to its local websites. As a group, they sell classified ads in over 1,000 cities....
ALPHABET INC. (Nasdaq symbols GOOG $741 [class C: non-voting] and GOOGL $760 [class A: one vote per share]; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 688.3 million; Market cap: $517.8 billion; Price-tosales ratio: 6.8; No dividends paid; TSINetwork Rating: Above Average; www.abc.xyz) is the new holding company for Google’s Internet search business and its smaller, riskier operations. These smaller businesses, which it calls “Other Bets,”offer home thermostats and high-speed Internet and digital TV services. Among these Other Bets is Boston Dynamics, a firm developing advanced robotic technologies. Alphabet purchased this company in 2013. However, developing commercially viable robots is taking much longer than Alphabet anticipated. As a result, the company is now planning to sell Boston Dynamics. While the sale will have little impact on Alphabet’s overall revenue and earnings, it illustrates the benefits of the company’s reorganization. It also shows its dedication to develop profitable new businesses....
AGILENT TECHNOLOGIES INC. $40 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 327.8 million; Market cap: $13.1 billion; Price-to-sales ratio: 3.2; Dividend yield: 1.2%; TSINetwork Rating: Average; www.agilent.com) makes testing equipment for medical research labs. In November 2015, the company paid $242 million for Seahorse Bioscience. This firm makes equipment that lab researchers use to measure cellular response to new drugs. That helps pharmaceutical firms develop new treatments for cancer and infectious diseases. The company also enhanced its product line by purchasing Cartagenia, a Belgian firm that makes software for Agilent’s medical-testing equipment. It paid $60 million euros for this business....
MCKESSON CORP. $157 (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 229.0 million; Market cap: $36.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.mckesson .com) is buying the Rexall chain of 470 drug stores in Canada for $2.2 billion. The company expects to complete the purchase by the end of 2016. McKesson already distributes prescription drugs and other products to Rexall, and this familiarity helps cut the risk of an unpleasant surprise. Excluding integration charges and currency exchange rates, the company expects the new operations will add to its earnings in the first year. McKesson is a hold.
APACHE CORP. $50 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 378.3 million; Market cap: $18.9 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.0%; TSINetwork Rating: Average; www.apachecorp.com) continues to sell overseas properties to focus on its less-risky onshore oil and gas operations here in North America. As a result, its production in 2015 fell 9.9%, to 486,775 barrels a day from 540,212 in 2014. Due to lower oil and gas prices, it lost $130 million, or $0.34 a share, in 2015 compared to a profit of $2.0 billion, or $5.21. The company plans to spend $1.4 billion to $1.8 billion on capital projects in 2016, down from $4.7 billion in 2015. That should let it continue to pay quarterly dividends of $0.25 a share, for an annualized yield of 2.0%. In 2015, dividend payments totaled $377 million....
DIAGEO PLC ADRs $107 (New York symbol DEO; Conservative Growth Portfolio, Consumer sector; ADRs outstanding: 630.0 million; Market cap: $67.4 billion; Price-to-sales ratio: 4.4; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.diageo.com) is the world’s largest premium alcoholic beverage company. Its major brands include Guinness stout, Smirnoff vodka, Johnnie Walker whisky and Captain Morgan rum. Diageo recently sold its wine operations in Australia and its Jamaican brewing operations. That freed up cash it can use to expand its main spirits businesses. They include its upcoming deal to buy Australian whisky maker Starward. In the six months ended December 31, 2015, Diageo’s sales fell 5.0% to 5.6 billion pounds from 5.9 billion a year earlier (1 pound=$1.85 Canadian). If you exclude the brands that Diageo recently sold and the negative impact of currency exchange rates, sales gained 1.8%. Earnings per ADR fell 4.7%, to 2.05 pounds from 2.15. (Each American Depositary Receipt represents four common shares.)...