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
J.P. MORGAN CHASE & CO., $66.47, New York symbol JPM, has agreed to settle charges that it colluded with other major banks to manipulate foreign exchange rates between December 2007 and January 2013. As a result, Morgan will pay a total of $892.0 million in fines. To put that in perspective, the bank earned $5.9 billion, or $1.45 a share, in the three months ended March 31, 2015. Morgan has already set aside funds to cover potential lawsuit payouts, including this one, so this week’s settlement will not hurt its current earnings. It has also strengthened oversight over its trading operations....
INTACT FINANCIAL $89.80 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $11.8 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 March 31, 2015, Intact’s revenue rose 5.3%, to $1.57 billion from $1.50 billion a year earlier. The company earned $186 million, or $1.37 a share, up 44.2% from $129 million, or $0.94. The latest results reflect a $64-million reduction in catastrophic losses, mostly related to weather. That helped Intact report an improved combined ratio, or claims paid out divided by premiums taken in (the lower, the better) of 93.4%, down from 97.1%....
GOODYEAR TIRE & RUBBER $31.26 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330- 796-2122; www.goodyear.com; Shares outstanding: 269.8 million; Market cap: $8.4 billion; Dividend yield: 0.8%) is the world’s largest tire maker, with 52 plants in 22 countries. In the quarter ended March 31, 2015, Goodyear’s sales fell 10.0%, to $4.02 billion from $4.47 billion a year earlier. The rising U.S. dollar lowered the value of the company’s foreign sales. Excluding one-time items, earnings per share fell 3.6%, to $0.54 from $0.56, but that was much better than the consensus estimate of $0.44. Record North American earnings let Goodyear offset the effects of the higher U.S. dollar....
BROADRIDGE FINANCIAL SOLUTIONS $55.54 New York symbol BR; TSINetwork Rating: Average) (201-714-3000; www.broadridge.com; Shares outstanding: 120.9 million; Market cap: $6.5 billion; Dividend yield: 2.0%) 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 $58.8 million, or $0.47 a share, in its fiscal 2015 third quarter, which ended March 31, 2015. That’s up 6.7% from $55.1 million, or $0.44 a share, a year earlier. The company continues to add new clients and is doing a good job of holding on to existing ones. Broadridge typically makes about half of its profits in its fiscal fourth quarter, which ends June 30. That’s the busiest period for processing proxies and annual reports for its clients....
SYMANTEC CORP. $25.03 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (408-517- 8000; www.symantec.com; Shares outstanding: 682.4 million; Market cap: $17.1 billion; Dividend yield: 2.4%) earned $0.43 a share in the three months ended April 3, 2015, down from $0.48 a year earlier. However, the decline was partly because the company is hiring more programmers to expand its cybersecurity operations. Symantec still plans to split into two publicly traded firms. One will keep the Symantec name and focus on antivirus and security software and services. The other, called Veritas Technologies, will consist of the company’s information-management operations, which make products for data backup and recovery. Symantec aims to complete the breakup by the end of 2015. Meanwhile, the stock trades at just 13.5 times this year’s forecast earnings....
The near-term direction of oil and gas prices remains uncertain, so we think the best way to cut risk is to look for companies with rising production that are trading at reasonable multiples to cash flow. Here are two with sound long-term prospects. DEVON ENERGY CORP. $65.82 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235- 3611; www.dvn.com; Shares outstanding: 411.0 million; Market cap: $26.6 billion; Dividend yield: 1.5%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 40% gas and 60% oil. The company narrowed its focus with its July 2014 sale of some of its properties to Linn Energy for $2.3 billion. The deal included holdings in the Rockies, the onshore Gulf Coast and the Mid-Continent region (which includes Oklahoma, Kansas and Texas)....
CAMECO CORP. $19.24 (Toronto symbol CCO; TSINetwork Rating: Extra Risk) (306- 956-6200; www.cameco.com; Shares outstanding: 395.8 million; Market cap: $7.8 billion; Dividend yield 2.1%) reports that its per-share profits doubled in the three months ended March 31, 2015, to $0.18 from $0.09 a year earlier. Revenue rose 35.0%, to $565.8 million from $419.2 million. Uranium sales volumes rose 1.4%, while prices in Canadian dollars gained 4.3%. Uranium’s outlook is improving: China is building 23 nuclear reactors and Japan plans to restart some of its facilities after the 2011 tsunami damaged the Fukushima nuclear plant....
NEW GOLD $3.86 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 508.9 million; Market cap: $2.1 billion; No dividends paid) has four mines: the Mesquite project in the U.S., Cerro San Pedro in Mexico, the Peak mine in Australia and the New Afton mine in B.C. New Gold also owns 30% of the El Morro copper/ gold project in Chile, 100% of the Blackwater property in B.C. and 100% of Ontario’s Rainy River project. In the three months ended March 31, 2015, the company’s cash flow per share fell 27.8%, to $0.13 from $0.18 a year earlier. Gold production rose 4.0%, to 94,977 ounces from 91,317, but an 11.2% fall in copper output from New Afton, along with lower realized gold prices, cut New Gold’s cash flow....
NISSAN MOTOR (ADR) $21.01 (Nasdaq symbol NSANY; TSINetwork Rating: Above Average) (310-771-3111; www.nissan-global.com; Shares outstanding 2.3 billion; Market cap: $47.7 billion; Dividend yield: 2.8%) is Japan’s secondlargest automaker, after Toyota. In April 2015, the company sold a record 109,848 vehicles in the U.S., up 5.7% from April 2014. However, that missed the consensus forecast of a 7.7% gain. Truck sales (44% of the total) rose 23.1%, thanks to new models such as its updated Rogue (up 44.5%) and Murano (up 72.9%) sport utility vehicles....
WYNDHAM WORLDWIDE $86.49 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 120.0 million; Market cap: $10.4 billion; Dividend yield: 1.9%) is one of the world’s largest hospitality companies, with 7,670 franchised hotels worldwide. Wyndham also manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has 109,000 vacation-rental properties in 100 countries. In the three months ended March 31, 2015, Wyndham’s revenue rose 5.8%, to $1.26 billion from $1.19 billion a year earlier. The company gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped increase its occupancy rate by 0.6%....