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
TOROMONT INDUSTRIES LTD. $28.65 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 77.1 million; Market cap: $2.2 billion; Dividend yield: 2.1%) reported revenue of $467.4 million in the three months ended September 30, 2014. That’s down 6.2% from $498.3 million a year earlier. Earnings declined 7.9%, to $40.0 million from $43.5 million. Per-share earnings fell 8.8%, to $0.52 from $0.57, on more shares outstanding. However, the lower results were mostly because the year-earlier quarter included Toromont’s biggest-ever mining order: an $82-million delivery to the Baffinland iron ore project....
WYNDHAM WORLDWIDE $79.11 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 123.7 million; Market cap: $9.8 billion; Dividend yield: 1.8%) is one of the world’s largest hospitality companies, with 7,600 franchised hotels worldwide. Wyndham also manages vacation resorts, rental properties, luxury clubs and time-shares. It now has 107,000 vacation-rental properties in 100 countries. In the three months ended September 30, 2014, the company’s revenue rose 6.1%, to $1.51 billion from $1.43 billion a year earlier. Wyndham gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up its occupancy rate by 2.0%....
DOREL INDUSTRIES $37.53 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.2 billion; Dividend yield: 3.6%) reported revenue of $673.0 million in the three months ended September 30, 2014. That’s up 10.8% from $607.3 million a year earlier (all figures except share price and market cap in U.S. dollars). Earnings per share jumped 32.7% in the latest quarter, to $0.73 from $0.55. Sales of its highly profitable Cannondale and Pacific Cycle premium bikes remain strong. As well, Brazilian bike maker Caloi posted its first profit since Dorel’s recent purchase of a 70% stake in the company. The stock trades at just 10.4 times Dorel’s forecast 2015 earnings of $3.61 a share....
COMPUTER MODELLING GROUP $12.59 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgl.ca; Shares outstanding: 78.8 million; Market cap: $990.2 million; Dividend yield: 3.2%) sells software and consulting services that help oil and gas producers use advanced recovery techniques to get more out of their wells. In the quarter ended September 30, 2014, Computer Modelling’s revenue rose 14.8%, to $19.7 million from $17.2 million a year earlier. Earnings gained 33.3%, to $7.5 million, or $0.09 a share, from $5.6 million or $0.07. The company cut its costs, pushing its earnings higher. Computer Modelling holds cash of $65.4 million, or $0.83 a share, and has no debt. The stock yields 3.2%....
TIM HORTONS $92.84 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 132.6 million; Market cap: $12.3 billion; Div. yield: 1.4%) had sales of $909.2 million in the three months ended September 30, 2014, up 10.2% from $825.4 million a year earlier. Earnings per share fell 2.2%, to $0.74 from $0.75. The company has accepted a friendly takeover offer from Miami-based Burger King Worldwide (New York symbol BKW). If you exclude unusual items, such as $27.3 million in takeover-related costs, Tim Hortons earned $0.95 a share in the quarter, up 25.0% from $0.76 a year earlier. Under the deal, Tim Hortons’ shareholders can opt to receive $88.50 a share in cash or 3.0879 Burger King shares worth a total of $113.51 (all amounts in Canadian dollars)....
WAJAX CORP. $35.46 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.8 million; Market cap: $595.0 million; Dividend yield: 6.8%) 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, 2014, Wajax’s revenue rose 6.2%, to $359.5 million from $338.5 million a year earlier. All of its segments reported higher sales, including mining and forestry....
WAL-MART STORES INC., $82.96, New York symbol WMT, rose 5% this week after reporting better-than-expected quarterly results. In the third quarter of its 2015 fiscal year, which ended October 31, 2014, Wal-Mart’s earnings fell 0.4%, to $3.71 billion from $3.73 billion a year earlier. However, earnings per share rose 0.9%, to $1.15 from $1.14, on fewer shares outstanding. That beat the consensus estimate of $1.12. Revenue rose 2.9%, to $119.0 billion from $115.7 billion, also exceeding the consensus forecast of $118.4 billion. If you disregard unfavourable currency rates, Wal-Mart’s sales would have risen 3.1% in the latest quarter....
CHEMTRADE LOGISTICS INCOME FUND, $21.40, symbol CHE.UN on Toronto, is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base metal processors, whose operations create sulphur, acid and other by-products. Chemtrade converts these substances into useful chemicals, like sulphuric acid. The company reported that its revenue rose 56.9% in the quarter ended September 30, 2014, to $324.6 million from $206.9 million a year earlier. That’s largely due to General Chemical Corp., which Chemtrade bought for $900 million U.S. in January 2014. General makes a range of chemicals, including aluminum sulphate, aluminum chlorohydrate and ferric sulphate (all of which are used in water treatment), as well as ingredients for prescription drugs, nutritional supplements and veterinary products....
RUSSEL METALS INC., $31.50, symbol RUS on Toronto, reported strong quarterly results this week. In the three months ended September 30, 2014, Russel’s revenue rose 30.4%, to $1.04 billion from $796.8 million a year earlier. The company’s metal-services business raised its prices in response to higher demand, increasing its revenue by 14% in the latest quarter. The energy products division, which supplies pipes for oil and gas exploration and development, saw its revenue jump 41%....
SYMANTEC CORP., $24.97, Nasdaq symbol SYMC, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers. In its fiscal 2015 second quarter, which ended October 3, 2014, Symantec’s earnings fell 7.5%, to $332 million from $359 million a year earlier. Per-share earnings declined 5.9%, to $0.48 from $0.51, on fewer shares outstanding. Even so, that beat the consensus forecast of $0.43. Revenue declined 1.2%, to $1.62 billion from $1.64 billion, but still matched the consensus estimate....