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.
Read More
Close
Growth Stocks Library Archives
WESTJET AIRLINES $24.67 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 125.8 million; Market cap: $3.1 billion; Dividend yield: 2.3%) serves 93 destinations in North America, Central America, the Caribbean and Europe. Its fleet of 107 modern Boeing 737s are 30% more fuel efficient than older jets. In June 2013, the company launched WestJet Encore, its Canadian regional airline. This business now operates 22 Bombardier Q400 NextGen turboprop planes, which seat 78 passengers. The Canadian airline market remains highly competitive, especially with Air Canada expanding its Rouge budget airline to serve more leisure destinations in Europe, the Caribbean, Mexico and the U.S. However, WestJet is now taking delivery of its Boeing 767 widebody aircraft. That will let it compete with Air Canada internationally; it could add more cities in Europe, as well as South America or Asia....
DOREL INDUSTRIES $34.73 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-934- 3034; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.2 billion; Dividend yield: 4.6%) makes a number of items, including readyto- assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and sporting goods, mainly bicycles. In the three months ended June 30, 2015, Dorel’s sales rose 2.1%, to $669.6 million from $655.8 million a year earlier (all amounts except share price and market cap in U.S. dollars). Even with the higher sales, earnings fell 16.2%, to $16.6 million, or $0.51 share, from $19.8 million, or $0.61 a share. The high U.S. dollar cut $0.23 a share from the company’s international earnings....
BROADRIDGE FINANCIAL SOLUTIONS $55.76 (New York symbol BR; TSINetwork Rating: Average) (201-714-3000; www.broadridge.com; Shares outstanding: 119.9 million; Market cap: $6.7 billion; Dividend yield: 2.2%) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. The company processes 90% of all proxy votes in the U.S. and Canada. Without one-time items, Broadridge earned $171.5 million in its fiscal 2015 fourth quarter, which ended June 30, 2015. That’s up 18.6% from $144.6 million a year earlier. Earnings per share rose 20.7%, to $1.40 from $1.16, on fewer shares outstanding. Revenue gained 4.9%, to $929.6 million from $885.9 million. The company continues to add new clients and is doing a good job of holding on to existing ones. Recurring fee revenue rose 7% in the latest quarter and accounted for 65% of the total....
ACI WORLDWIDE $22.65 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402- 390-7600; www.tsainc.com; Shares outstanding: 117.8 million; Market cap: $2.7 billion; No dividends paid) reported revenue of $265.8 million in the three months ended June 30, 2015, up 4.3% from $254.8 million a year earlier. The company earned $0.26 a share, up sharply from $0.12. Cost-cutting measures helped improve the latest quarterly results. ACI’s growth by acquisition has increased its goodwill and intangible assets to $1.0 billion, or a high 37.0% of its market cap. The company is well positioned to benefit from the global shift toward online payments. However, the stock trades at a high 30.2 times ACI’s forecast 2015 earnings of $0.75 a share. Any major problems integrating its acquisitions could sharply cut that estimate....
MITEL NETWORKS $10.41 (Toronto symbol MNW; TSINetwork Rating: Extra Risk) (613-592-2122; www.mitel.ca; Shares outstanding: 120.0 million; Market cap: $1.2 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 June 30, 2015, Mitel’s revenue rose slightly, to $292.3 million from $291.7 million a year earlier (all figures except share price and market cap in U.S. dollars). Earnings per share fell 14.3%, to $0.18 from $0.21, as the stronger dollar lowered the value of the company’s international sales. However, the latest earnings matched the consensus estimate....
CHESAPEAKE ENERGY $7.34 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chk.com; Shares outstanding: 665.1 million; Market cap: $5.2 billion; No dividends paid) has eliminated its dividend to conserve cash in the face of low oil and gas prices. The company had been paying a quarterly dividend of $0.0875 a share. The cut will save it $240 million a year. As well, Chesapeake will spend $3.5 billion to $4.0 billion on exploration and development in 2015, down from its earlier estimate of $4.0 billion to $5.0 billion. It spent $5.8 billion in 2014. The stock now trades at just 1.3 times the company’s annual cash flow of $5.52 a share, based on the latest quarter....
GOODYEAR TIRE & RUBBER CO. $32.22 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 269.6 million; Market cap: $8.8 billion; Dividend yield: 0.7%) is the world’s largest tire maker, with 50 plants in 22 countries. In the three months ended June 30, 2015, Goodyear’s revenue fell 10.4%, to $4.17 billion from $4.66 billion a year earlier. The rising U.S. dollar cut the contribution from the company’s foreign sales (particularly in Europe and Brazil) by $401 million. Excluding one-time items, earnings rose 1.8%, to $229.0 million, or $0.84 a share, well ahead of the consensus estimate of $0.74. A year earlier, the company earned $225.0 million, or $0.80 a share....
RESTAURANT BRANDS INTERNATIONAL $42.61 (New York symbol QSR; TSINetwork Rating: Average) (905-845-6511; www.rbi.com; Shares outstanding: 467.0 million; Market cap: $19.9 billion; Dividend yield: 1.1%) is the world’s thirdlargest fast-food operator, after McDonald’s and Yum Brands, with 14,528 Burger King outlets and 4,776 Tim Hortons locations. In the three months ended June 30, 2015, the company earned $142.7 million, up 27.3% from $112.1 million a year earlier. Earnings per share gained 25.0%, to $0.30 from $0.24, on more shares outstanding. Overall sales fell 1.6%, to $1.04 billion from $1.06 billion. That’s because the high U.S. dollar hurt the contribution from Restaurant Brands’ overseas operations....
INTACT FINANCIAL $92.22 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $12.2 billion; Dividend yield: 2.3%) is Canada’s largest provider of property and casualty insurance. Its brands include Intact Insurance, Canada BrokerLink and belairdirect. In the three months ended June 30, 2015, Intact’s revenue rose 6.0%, to $2.34 billion from $2.21 billion a year earlier. Revenue improved across all of the company’s insurance lines and geographic regions. Its $197-million acquisition of Canadian Direct Insurance in early 2015 also added to its sales. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C. Earnings rose 1.9%, to $210 million, or $1.56 a share, from $206 million, or $1.53. Intact continues to write more-profitable insurance policies and cut its operating costs....
AGT FOOD & INGREDIENTS $29.79 (Toronto symbol AGT; TSINetwork Rating: Extra Risk) (306-525-4490; www.alliancegrain.com; Shares outstanding: 23.1 million; Market cap: $684.0 million; Dividend yield: 2.0%) earned $0.44 a share in the three months ended June 30, 2015, up 2.3% from $0.43 a year earlier. Revenue gained 5.1%, to $378.2 million from $359.8 million. The gains 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....