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
MITEL NETWORKS $11.40 (Toronto symbol MNW; TSINetwork Rating: Extra Risk) (613-592-2122; www.mitel.ca; Shares outstanding: 120.3 million; Market cap: $1.4 billion; No dividends paid) develops and markets products centred on business telephone systems, including technology that integrates land lines and mobile phones. The company also offers call centre and videoconferencing products. In the three months ended September 30, 2015, Mitel’s revenue rose 7.2%, to $293.7 million from $274.0 million a year earlier (all figures except share price and market cap in U.S. dollars). However, earnings per share fell 33.3%, to $0.12 from $0.18, as the stronger dollar lowered the value of the company’s international sales. Even so, that beat the consensus estimate of $0.07 a share....
DOREL INDUSTRIES $30.78 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-934-3034; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.0 billion; Dividend yield: 5.1%) reports that its sales rose 0.9% in the three months ended September 30, 2015, to $679.3 million from $673.0 million a year earlier (all figures except share price and market cap in U.S. dollars). Earnings fell 35.1%, to $0.48 a share from $0.74. However, Dorel gets half of its sales from outside the U.S., and the high U.S. dollar cut its earnings by $0.28 a share in the latest quarter. Costs related to the company’s plan to shift juvenile-product manufacturing to Asia also weighed on its earnings. The stock trades at a low 7.9 times Dorel’s forecast 2016 earnings of $2.94 a share. It yields a high 5.1%....
RUSSEL METALS $19.08 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 61.7 million; Market cap: $1.2 billion; Dividend yield: 8.0%) is one of North America’s largest metal distributors, serving 39,000 clients at 53 locations in Canada and 12 in the U.S. In the three months ended September 30, 2015, Russel’s revenue fell 25.5%, to $773.4 million from $1.04 billion a year earlier. Sales mainly declined because revenue fell 40% at the company’s energy products division, which sells pipes to oil and gas drillers. Earnings dropped sharply, to $12.8 million, or $0.21 a share, from $33.0 million, or $0.54. The latest figure included a $2-million charge related to a more than 7% cut to the company’s workforce. Russel’s earnings fell faster than revenue because steel prices moved down in the latest quarter. That hurts its profit margins and causes it to suffer losses on its inventory....
AEROPOSTALE INC. $0.68 (New York symbol ARO; TSINetwork Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding: 79.6 million; Market cap: $53.3 million; No dividends paid) recently opened its first location in Ireland, at Dublin’s Liffey Valley Shopping Centre, one of the country’s biggest malls. The Dublin store is operated through a licensing agreement with Shuz 4 U International Ltd. Over the next five years, Aeropostale expects to open 10 more locations in Western Europe through this partnership. The company should be able to repeat its previous success at attracting new customers, but its sales may remain weak in the near term....
SHERRITT INTERNATIONAL $0.79 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 293.9 million; Market cap: $226.3 million; No dividends paid) is now focused on nickel production, with operations in Cuba and Canada. As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba. In the three months ended September 30, 2015, the company’s revenue fell 25.3%, to $76.9 million from $102.9 million a year earlier, mostly due to lower oil and gas prices. Cash flow per share fell sharply, to $0.05 from $0.16....
DELPHI ENERGY $0.72 (Toronto symbol DEE; TSINetwork Rating: Speculative) (403- 265-6171; www.delphienergy.ca; Shares outstanding: 155.5 million; Market cap: $110.4 million; No dividends paid) develops, produces and explores for oil and natural gas. About 70% of its output is gas; the remaining 30% is oil. In the three months ended September 30, 2015, Delphi’s production fell 16.6%, to 7,888 barrels of oil equivalent a day from 9,461 a year earlier, after the company sold some fields. The lower output and a 31.4% average decline in oil and gas prices cut cash flow per share to $0.06 from $0.09. The company will need improved oil and gas prices to move significantly higher, but its long-term outlook is positive....
WAJAX CORP. $16.96 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:20.0 million; Market cap: $349.7 million; Dividend yield: 5.9%) sells and services cranes, forklifts and other heavy equipment. It also provides related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions). The company’s customers are in the natural resource, construction, manufacturing and transportation industries. In the three months ended September 30, 2015, Wajax’s revenue fell 19.1%, to $290.9 million from $359.5 million a year earlier, as mining, oil and gas and oil sands firms made fewer purchases. Earnings declined 32.0%, to $7.5 million, or $0.38 a share, from $11.1 million, or $0.66....
GOODYEAR TIRE & RUBBER CO. $33.45 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 268.9 million; Market cap: $8.7 billion; Dividend yield: 0.8%) is the world’s largest tire maker, with 52 plants in 22 countries. In the three months ended September 30, 2015, Goodyear’s revenue fell 10.2%, to $4.18 billion from $4.66 billion a year earlier. The rising U.S. dollar cut the value of the company’s foreign sales (particularly in Europe and Brazil) by $430 million. Earnings rose 12.0%, to $271.0 million, or $0.99 a share. A year earlier, the company earned $242.0 million, or $0.87 a share....
WYNDHAM WORLDWIDE $77.38 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 116.1 million; Market cap: $8.9 billion; Dividend yield: 2.2%) has now added all of its hotel rooms to the TripAdvisor Instant Booking platform. With Instant Booking, travellers click on the “Book on TripAdvisor” button to set up a reservation. TripAdvisor is the world’s largest travel site. It reaches over 340 million unique visitors a month and has more than 225 million traveller reviews and opinions. It launched its Instant Booking platform in the U.S. in June 2014 and has since expanded it to the U.K., with other international markets to follow. Wyndham Worldwide is a hold....
INTACT FINANCIAL $88.20 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341- 1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $11.5 billion; Dividend yield: 2.4%) is Canada’s largest provider of property and casualty insurance, based on premiums. 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. Earnings rose 7.6%, to $199 million, or $1.47 a share, from $185 million, or $1.37....