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
WESTJET AIRLINES $26.90 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1- 877-493-7853; www.westjet.com; Shares outstanding: 127.8 million; Market cap: $3.5 billion; Dividend yield: 1.8%) continues to benefit as lower oil prices cut its fuel costs. Fuel typically accounts for a third of the airline’s operating expenses. In the three months ended March 31, 2015, WestJet’s earnings per share gained 58.0%, to $1.09 from $0.69. Revenue rose 4.0%, to $1.08 billion from $1.04 billion. The company’s load factor fell to 81.6% from 83.1% (load factor is the percentage of available seats occupied by paying passengers). However, revenue from other sources jumped 63.9% after WestJet began charging a $25 fee for each checked bag on its domestic and U.S.-bound routes in the fourth quarter of 2014. It also added new planes to its fleet, increasing its capacity by 4.7%....
BMTC GROUP $16.25 (Toronto symbol GBT; TSINetwork Rating: Extra Risk) (514-648-5757; No website; Shares outstanding: 43.1 million; Market cap: $799.9 million; Dividend yield: 1.5%) recently received shareholder approval for its plan to simplify its capital structure by moving from two share classes to one. As a result, it has converted all of its class A (one vote per share) and B shares (20 votes per share) into a single class of common shares (one vote per share). The common shares trade on the Toronto exchange under the new GBT symbol. Meanwhile, BMTC earned $59,000, or nil per share, in the quarter ended March 31, 2015, compared to a loss of $1.5 million, or $0.03 a share, a year earlier. Sales rose 2.9%, to $149.3 million from $145.1 million. Same-store sales gained 1.6%....
RESTAURANT BRANDS INTERNATIONAL $41.07 (New York symbol QSR; TSINetwork Rating: Average) (212-333-3810; www.rbi.com; Shares outstanding: 467.0 million; Market cap: $19.2 billion; Dividend yield: 1.0%) is the world’s thirdlargest fast-food operator, after McDonald’s and Yum Brands, with 14,387 Burger King outlets and 4,724 Tim Hortons locations in 100 countries. Excluding one-time items, Restaurant Brands earned $0.18 a share in the three months ended March 31, 2015, up 38.5% from $0.13 a year earlier. Sales crept up to $932.0 million from $931.6 million, but that’s because the high U.S. dollar cut the contribution from Restaurant Brands’ overseas operations. On a constant-currency basis, sales gained 10.6%. Same-store sales rose 5.3% at Tim Hortons, thanks to new menu items like Philly steak and cheese and crispy chicken sandwiches. Burger King’s same-store sales rose 4.6%, also thanks to new products, such as a spicy BLT sandwich, and special promotions....
TOROMONT INDUSTRIES LTD. $31.87 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667- 5511; www.toromont.com; Shares outstanding: 77.5 million; Market cap: $2.5 billion; Dividend yield: 2.1%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. It also makes refrigeration systems through its CIMCO division. The company completed the spinoff of Enerflex Ltd. (see right) in 2011. Shareholders received shares of both the new Toromont Industries and Enerflex. In the three months ended March 31, 2015, revenue rose 9.1%, to $340.2 million from $311.7 million a year earlier. Earnings gained 8.1%, to $20.1 million, or $0.26 a share, from $18.6 million or $0.24. The first quarter is typically Toromont’s slowest because of winter shutdowns in the construction industry....
AGT FOOD & INGREDIENTS INC., $28.51, symbol AGT on Toronto, buys and processes a range of pulses—which include peas, beans, lentils and chickpeas—as well as other specialty crops. The Saskatchewan-based company owns 13 processing plants in Canada, nine in Turkey, four in Australia, two in the U.S., one in China and one in South Africa. Before one-time items, AGT earned $0.42 a share in the quarter ended March 31, 2015, up 162.5% from $0.16 a year earlier. Revenue gained 23.7%, to $385.2 million from $311.3 million. The increases came from recent acquisitions and higher processing activity....
SYMANTEC CORP., $24.48, Nasdaq symbol SYMC, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers. In its fiscal 2015 fourth quarter, which ended April 3, 2015, Symantec earned $299 million, or $0.43 a share. That fell short of the consensus estimate of $0.44. The latest earnings are also down 10.2% from $333 million, or $0.48 a share, a year earlier. The decline is partly because Symantec is hiring more programmers as it expands its cybersecurity operations. However, the company’s restructuring, which includes cancelling unprofitable deals to pre-install software on new computers and simplifying its product lines, saved it $150 million in fiscal 2015....
DUN & BRADSTREET CORP., $125.84, New York symbol DNB, provides credit reports on over 230 million companies. Its clients use this information to make lending and buying decisions. In 2010, the company sold subsidiary Dun & Bradstreet Credibility Corp. (DBCC) to private investors. DBCC sells credit reports and related services to small businesses in the U.S. and pays licensing fees to use the Dun & Bradstreet brand. DBCC’s new owners focused on developing products specifically for small businesses. Since the sale, DBCC has doubled its annual revenue to $135 million....
DOREL INDUSTRIES INC., $34.25, symbol DII.B on Toronto, makes a range of items, including ready-to-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 March 31, 2015, Dorel’s sales rose 2.7%, to $665.5 million from $647.7 million a year earlier (all figures except share price in U.S. dollars). Sales rose 17.2% at the home furnishing division and 2.0% at the juvenile-products business. These gains offset a 4.8% decline at the sports segment. Earnings fell 53.2%, to $0.36 a share from $0.77, falling well short of the consensus forecast of $0.60. However, Dorel gets half of its sales from outside of the U.S., and the high U.S. dollar cut its earnings by $0.30 a share in the latest quarter. Costs related to its plan to shift manufacturing of juvenile products to Asia from North America and Europe also weighed on its earnings....
APPLE INC., $128.95, Nasdaq symbol AAPL, sold 61.2 million iPhones in its latest quarter, up 39.9% from 43.7 million a year earlier. That’s largely due to strong demand in developing countries. For example, Apple sold more iPhones in China (including Hong Kong and Taiwan) than in the U.S. As a result, the company’s earnings jumped 32.7% in its fiscal 2015 second quarter, which ended March 28, 2015, to $13.6 billion from $10.2 billion a year earlier. Per-share profits gained 40.4%, to $2.33 from $1.66, on fewer shares outstanding. That easily beat the consensus estimate of $2.17. Sales rose 27.1%, to $58.0 billion from $45.6 billion, also beating the consensus forecast of $56.1 billion....
TEMPUR SEALY INTERNATIONAL INC., $61.35, symbol TPX on New York, makes and distributes mattresses and neck pillows made of its Tempur material, which conforms to the body to provide support and alleviate pressure points. The company is benefiting from its $1.3-billion purchase of rival Sealy in March 2013. The move let it diversify into traditional spring-coil beds. Excluding integration costs, Tempur Sealy’s earnings rose 4.6% in the three months ended March 31, 2015, to $34.1 million from $32.6 million a year earlier. Per-share earnings gained 3.8%, to $0.55 from $0.53, on more shares outstanding. That beat the consensus estimate of $0.48. On a constant-currency basis, earnings per share jumped 20%....