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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Meanwhile, Apache produced 486,409 barrels of oil equivalent a day in the three months ended September 30, 2015, up 6.8% from 455,295 a year earlier. The gain mainly came from improving efficiency at the company’s international operations, including its offshore wells in the North Sea.
However, lower oil prices resulted in a $0.05-a-share loss, compared to a profit of $1.27 a share a year earlier. Even so, that was much better than the consensus estimate of a $0.36-a-share loss. Revenue dropped 56.5%, to $1.5 billion from $3.4 billion.
OUR RECOMMENDATION: Apache is still a hold.
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Before one-time items, AGT earned $0.51 a share in the three months ended September 30, 2015, up 10.9% from $0.46 a year earlier. Revenue gained 26.1%, to $362.8 million from $287.7 million. The increases came from recent acquisitions and higher processing activity.
AGT continues to benefit from its plan to focus on more-profitable products, such as ingredients and packaged foods, as opposed to simply cleaning, splitting and bagging bulk crops. Food makers use these ingredients in products such as baked goods, soups and beverages, as well as pet food and animal feed.
The stock trades at a low 13.2 times the $2.38 a share AGT will probably earn in 2016. It yields 1.9%.
OUR RECOMMENDATION: AGT Food & Ingredients is a buy.
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In its fiscal 2015 fourth quarter, which ended September 26, 2015, the company sold 48.0 million iPhones, up 22.3% from 39.3 million a year earlier, mainly due to strong demand in China. Even so, that missed the consensus forecast of 48.7 million.
Overall earnings jumped 31.4% to $11.1 billion from $8.5 billion. Per-share profits gained 38.0%, to $1.96 from $1.42, on fewer shares outstanding, beating the consensus estimate of $1.88.
Sales rose 22.3%, to $51.5 billion from $42.1 billion, also exceeding the consensus forecast of $51.1 billion.
In addition to strong demand for the iPhone (63% of total sales), sales of Mac computers (13%) gained 3.9%, while sales of software, music and movies (10%) rose 10.4%. The company bundles its new Apple Watch with other products, like iPods and Beats headphones. Sales in this category (6%) jumped 60.7%.
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In the three months ended September 30, 2015, Wyndham’s revenue rose 3.3%, to $1.56 billion from $1.51 billion a year earlier.
The company continues to buy back its stock, including 2.1 million shares for $170 million in the latest quarter. That’s partly why its per-share earnings rose 6.6% before one-time items, to $1.78 from $1.67, beating the consensus estimate of $1.70.
Wyndham’s shares moved up on both the improved results and reports that at least three big Chinese companies are competing to win Beijing’s approval to bid for Starwood Hotels & Resorts Worldwide (symbol HOT on New York). Starwood controls brands like Westin, Sheraton, W Hotels and St. Regis and has more than 1,200 properties worldwide. The company now has a market cap of $13.6 billion.
Earlier this year, China’s Anbang Insurance Group paid nearly $2 billion for the Waldorf-Astoria Hotel on New York’s Park Avenue, a record price for a U.S. hotel. As well, Sunshine Insurance Group, another Chinese insurer, paid $230 million—or more than $2 million a room—for New York’s Baccarat Hotel. That was an all-time high on a per-room basis.
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