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
CHIPOTLE MEXICAN GRILL $514.01 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.2 million; Market cap: $14.8 billion; No dividends paid) has implemented a number of measures to address food-safety concerns after E. coli sickened 52 customers late last year at its restaurants in nine states. The measures include: changes to food preparation and handling practices such as shredding cheese before it gets to its stores, blanching some produce in boiling water before serving and new rules for marinating chicken and steak. Chipotle will also implement regular training on safety standards for all workers. As well, it now offers paid sick leave to keep workers at home when they are ill....
SYMANTEC CORP. $19.97 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 675.5 million; Market cap: $12.8 billion; Dividend yield: 1.5%) has completed the sale of its Veritas Technologies subsidiary to the Carlyle Group (Nasdaq symbol CG). This business makes products for data backup and recovery. Symantec received $6.6 billion in cash ($5.3 billion after taxes). It also retained a $400 million equity stake in Veritas. Symantec has earmarked $2.3 billion of the proceeds for share repurchases it aims to complete by March 2017. The company has also lowered its regular quarterly dividend by 50.0%, to $0.075 a share from $0.15, because of the Veritas sale. The new annual rate of $0.30 yields 1.5%. It will, however, pay a special dividend of $4.00 a share on March 22, 2016....
COLLIERS INTERNATIONAL GROUP $44.51 (Toronto symbol CIG ; TSINetwork Rating: Extra Risk) (1-202-695-4200; www.colliers.com; Shares outstanding: 37.2 million; Market cap: $1.7 billion; Dividend yield: 0.2%) is one of the world’s top three commercial real estate firms, offering a range of services in the U.S., Canada, Europe, Australia, New Zealand, Asia and Latin America. Colliers continues to fuel its growth through acquisitions. Its latest is WPM Group NV, the leading property management firm in the Netherlands. The purchase price was not disclosed. Founded in 1987, WPM employs 180 people from five offices. Colliers will combine WPM with its existing operations in the Netherlands. The new unit will have 4.5 million square feet of real estate under management....
STANTEC INC. $32.04 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 94.4 million; Market cap: $3.0 billion; Dividend yield: 1.3%) continues to grow by acquisition. Its latest is VOA Associates, a 280-person architecture and planning firm based in Chicago. VOA’s recent Chicago projects include the 32-story Wabash “vertical campus” Building at Roosevelt University and waterfront reconstruction of the landmark Navy Pier. Stantec cuts its costs by sharing administrative expenses, financing and employee benefits among its divisions. But continually buying new firms adds risk, including the risk of writedowns....
WYNDHAM WORLDWIDE $68.94 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973-753-6000; www.wyndhamworldwide.com; Shares outstanding: 116.1 million; Market cap: $7.6 billion; Dividend yield: 2.4%) is one of the world’s largest hospitality companies, with 7,800 franchised hotels worldwide. It also manages vacation resorts, rental properties, luxury clubs and timeshares. The company has 112,000 vacation-rental properties in 100 countries. In the three months ended December 31, 2015, Wyndham’s revenue rose 6.5%, to $1.31 billion from $1.23 billion a year earlier. Earnings per share rose 8.9% before onetime items, to $0.98 from $0.90. The company is raising its quarterly dividend by 19.0%, to $0.50 from $0.42. The stock now yields 2.5%....
GOODYEAR TIRE & RUBBER CO. $30.78 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 268.9 million; Market cap: $8.2 billion; Dividend yield: 0.9%) is one of the world’s largest tire makers, with 52 plants in 22 countries. In the three months ended December 31, 2015, Goodyear’s revenue fell 6.7%, to $4.06 billion from $4.36 billion a year earlier. The rising U.S. dollar lowered the value of the company’s foreign sales (particularly in Europe and Brazil) by $339 million. Excluding one-time items, earnings rose 12.0%, to $257.0 million, or $0.93 a share. A year earlier, the company earned $166.0 million, or $0.59 a share....
BOEING CO., $108.63, New York symbol BA, fell 11% this week on news that the U.S. Securities and Exchange Commission is investigating how the company accounts for the development costs of its 747 and 787 jet airliners. Accounting rules let Boeing spread the huge upfront costs of designing and building new planes over several years, instead of recognizing these outlays when they occur. The SEC is looking into Boeing’s estimate of these costs, as well as its projected aircraft sales. If the company has to change these estimates, that could take it longer to recoup its development costs....
TOROMONT INDUSTRIES LTD., $28.56, symbol TIH on Toronto, distributes a range of industrial equipment, including machinery made by Caterpillar Inc. It also makes refrigeration systems through its CIMCO division. In the three months ended December 31, 2015, the company’s revenue rose 1.4%, to $472.0 million from $465.7 million a year earlier. However, earnings fell 2.8%, to $44.4 million, or $0.57 a share, from $45.7 million, or $0.59. Toromont saw weaker demand from customers in construction and mining. The company had to cut its prices to compete, and that lowered its profit margins and earnings....
ALPHABET INC., Nasdaq symbols GOOG (class C non-voting), $683.57, and GOOGL (class A voting), $703.76, is the new holding company for Google’s Internet search business and its smaller, riskier operations. These smaller businesses, which the company calls “Other Bets,” sell home thermostats and high-speed Internet and digital TV services. In the three months ended December 31, 2015, Alphabet’s revenue rose 17.8%, to $21.3 billion from $18.1 billion a year earlier, beating the consensus forecast of $20.8 billion. The main search engine business accounted for 99% of the total. That division’s revenue gained 17.7%. The number of paid clicks on advertisers’ ads jumped 31%, helping offset a 13% drop in the average amount advertisers paid per click. More people are using mobile devices to access the Internet, but advertisers pay lower rates for mobile ads because they’re harder to see on smaller screens. Revenue from Other Bets (1% of revenue) jumped 42.5%....
WESTJET AIRLINES LTD., $16.29, symbol WJA on Toronto, reported lower revenue and profits in the latest quarter. Weakness in the Alberta market offset the benefit of 25% lower fuel prices. Fuel typically accounts for a third of the airline’s operating expenses. In the three months ended December 31, 2015, WestJet’s revenue fell 3.6%, to $958.7 million from $994.4 million a year earlier. Earnings fell 30.1%, to $63.4 million, or $0.51 a share. A year earlier, they were $90.7 million, or $0.71 a share. Aside from the revenue drop, higher costs, including maintenance and salaries, contributed to the earnings decline. The latest quarter also included a pre-tax foreign exchange loss of $10.0 million. Since the end of the quarter, though, the company’s load factor has improved—it rose to 80.1% in January 2016 from 79.5% in January 2015. (Load factor is the percentage of seats occupied by paying passengers.)...