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.
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Growth Stocks Library Archives
CHIPOTLE MEXICAN GRILL INC., $412.96, symbol CMG on New York, is a Denver-based Mexican restaurant chain. It charges slightly higher prices than fast food companies but offers better quality food, including naturally raised meat and superior decor and service. The stock continues to suffer as the company copes with food-safety concerns at its restaurants. In October and November 2015, E. coli infections sickened 52 people at Chipotle locations in nine states and forced the company to temporarily close some outlets. Recent norovirus outbreaks at restaurants in California and Massachusetts have added to the bad publicity. Norovirus, which causes stomach problems, is highly infectious, though not fatal....
PLEASE NOTE: This is our last Hotline for 2015. Our next Hotline will go out on Friday, January 8, 2016. 3M COMPANY, $146.92, New York symbol MMM, makes over 55,000 consumer and industrial goods, including Post-It notes, Scotch tape, Scotch-Brite cleaning products, Scotchguard fabric protection and Thinsulate insulation. Slowing sales of TV sets, smartphones and tablet computers are hurting demand for 3M’s films, adhesives and coatings. At the same time, weak demand for industrial machinery is cutting sales of its other products, like abrasives....
PLEASE NOTE: This is our last Hotline for 2015. Our next Hotline will go out on Friday, January 8, 2016. ATLANTIC TELE-NETWORK, $76.27, symbol ATNI on Nasdaq, owns wireless and wireline (traditional telephone and Internet) operations in the U.S. Southwest, New England, New York State, Guyana, Bermuda and parts of the Caribbean islands. The company continues to increase its wireless capacity and coverage. That’s paying off as customers use more mobile data for services like music downloads, mobile gaming and e-books....
INTACT FINANCIAL $88.92 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $11.7 billion; Dividend yield: 2.4%) is Canada’s largest provider of property and casualty insurance. Its brands include Intact Insurance, Canada BrokerLink and belairdirect. In the three months ended September 30, 2015, Intact’s revenue rose 9.4%, to $2.09 billion from $1.91 billion a year earlier. Revenue improved across all of the company’s insurance lines and geographic regions. Canadian Direct Insurance, which Intact purchased for $197 million in early 2015, also added to its sales. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C....
ALIMENTATION COUCHETARD $63.53 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 567.4 million; Market cap: $35.9 billion; Dividend yield: 0.4%) has agreed to buy Ireland’s Topaz chain. The price was not disclosed but is likely in the $400-million range. Topaz is the country’s leading operator of gas stations and convenience stores. The chain consists of 464 locations across Ireland. This purchase is smaller than Couche-Tard’s $2.7-billion purchase of Norway’s Statoil Fuel & Retail gas station chain in June 2012 and The Pantry, which it bought for $1.7 billion in March 2015. The Pantry operates 1,500 convenience stores in the U.S....
BIRCHCLIFF ENERGY $3.62 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Shares outstanding: 152.3 million; Market cap: $542.2 million; No dividends paid) develops, produces and explores for oil and gas, mainly in the Peace River Arch area near the Alberta/B.C. border. About 87% of its output is gas. The remaining 13% is oil. In the three months ended September 30, 2015, Birchcliff’s cash flow per share dropped 42.0%, to $0.29 from $0.50 a year earlier. Sharply lower oil and gas prices offset a 12.3% rise in daily production. The company continues to support its cash flow with cost cuts. As well, in response to low prices, Birchcliff cut back on exploration and development spending for 2015. It will likely spend $249 million during the full year, down 45.0% from $451 million in 2014. It hasn’t yet announced its 2016 spending plans....
MAJOR DRILLING $4.39 (Toronto symbol MDI; TSINetwork Rating: Speculative) (1-866- 264-3986; www.majordrilling.com; Shares outstanding: 80.1 million; Market cap: $360.6 million; Dividend yield: 0.9%) is a large contract driller that mainly serves the mining industry. In the three months ended October 31, 2015, Major’s revenue fell 2.9%, to $84.7 million from $87.2 million a year earlier. The company’s loss narrowed to $5.3 million, or $0.07 a share, from $10.1 million, or $0.13. However, the year-ago quarter included $2.8 million of pre-tax restructuring charges related to the closure of its operations in South Africa and Namibia....
FAIR ISAAC CORP. $92.85 (New York symbol FICO; TSINetwork Rating: Average) (415-472-2211; www.fairisaac.com; Shares outstanding: 31.1 million; Market cap: $2.8 billion; Dividend yield: 0.1%) makes FICO Scores, the program that dominates the market for software that businesses use to evaluate customer creditworthiness. Fair Isaac also profits by selling programs that help credit card issuers control fraud and analyze cardholders’ spending patterns. In its fiscal 2015 third quarter, which ended September 30, 2015, Fair Isaac’s revenue rose 5.0%, to $232.8 million from $221.6 million a year earlier. Sales at the company’s applications division (64% of the total) fell 1.6% on weaker demand for marketing and fraud-detection software. However, sales of creditscoring programs (25%) jumped 24.5%, while sales of analytics software (11%) gained 8.7%....
ADOBE SYSTEMS INC. $95.56 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 498.8 million; Market cap: $46.9 billion; No dividends paid) reported that its revenue jumped 21.7% in the three months ended November 27, 2015, to a record $1.31 billion from $1.07 billion a year earlier. The company’s earnings per share rose 59.0%, to $0.62 from $0.39. The gains came from rising demand for its subscription services, particularly the Creative Cloud package of photo-editing and desktop-publishing programs. However, the stock has gained 32% in the past year and now trades at a high 34.0 times the $2.81 a share Adobe will likely earn in fiscal 2016. Moreover, the company gets 40% of its revenue from outside the U.S., so the rising U.S. dollar is a risk factor....
LEON’S FURNITURE LTD. $14.05 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 71.4 million; Market cap: $1.0 billion; Dividend yield: 2.8%) has steadily opened new stores, growing from 27 in 2003 to 80 today. The company more than quadrupled in size overnight with its March 2013 purchase of its main rival, The Brick, for $700 million. The Brick has 221 locations across Canada; the chains continue to operate separately. In the three months ended September 30, 2015, the company’s sales rose 1.2%, to $538.1 million from $531.7 million a year earlier. On a same-store basis, sales gained 1.1%....