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
GOODYEAR TIRE & RUBBER, $24.23, symbol GT on New York, rose over 18% this week after reporting sharply higher earnings in the latest quarter. In the three months ended September 30, 2014, Goodyear’s revenue fell 6.9%, to $4.7 billion from $5.0 billion a year earlier. The company sold 2% fewer tires worldwide, including a 4% drop in North America as car dealers stocked up on cheaper Chinese-made tires ahead of an expected U.S. tariff aimed at limiting sales of imported tires for less than the cost of production. But even with the lower revenue, earnings, excluding one-time items, jumped 39.9%, to $242.0 million, or $0.87 a share. That was well ahead of the consensus estimate of $0.70. A year earlier, the company earned $173.0 million, or $0.68 a share....
VISA INC., $241.43, New York symbol V, hit an all-time high of $242.50 this week after reporting better-than-expected quarterly results. In its fiscal 2014 fourth quarter, which ended September 30, 2014, Visa’s earnings rose 13.8%, to $1.4 billion from $1.2 billion a year earlier. Per-share earnings gained 17.8%, to $2.18 from $1.85, on fewer shares outstanding. The latest earnings exclude a $450-million lawsuit settlement. On that basis, they beat the consensus estimate of $2.10 a share. Revenue rose 8.6%, to $3.23 billion from $2.97 billion, also beating the consensus forecast of $3.19 billion....
APPLE INC., $105.22, Nasdaq symbol AAPL, hit a new all-time high of $105.49 (split-adjusted) this week on strong demand for the latest version of its iPhone smartphone. In its fiscal 2014 fourth quarter, which ended September 27, 2014, earnings rose 12.7%, to $8.5 billion from $7.5 billion a year earlier. The company spent $45.0 billion on share buybacks in the past year. As a result, earnings per share jumped 20.3%, to $1.42 from $1.18. That beat the consensus estimate of $1.31. Sales in the quarter gained 12.4%, to $42.1 billion from $37.5 billion. That also beat the consensus forecast of $39.9 billion....
MITEL NETWORKS, $9.49, symbol MNW on Toronto, has offered to buy ShoreTel Inc. (symbol SHOR on Nasdaq) for $540 million U.S. in cash. However, ShoreTel has rejected the $8.10 U.S.-a-share bid. Ottawa-based Mitel provides business phone systems and communications-focused software, while Sunnyvale, California-based ShoreTel makes phone and contact centre systems and software. The acquisition would be a good fit for Mitel, because ShoreTel does more than 90% of its business in the U.S. That would let Mitel quickly expand its phone and contact centre systems business in that market. As well, Mitel aims to move increasingly toward cloud-based products. This is where software and services are sold through subscriptions accessed over the Internet rather than as one-time sales. ShoreTel is well advanced in this area....
Procter & Gamble’s sales have slowed in recent years, mainly due to competition from cheaper generic brands. In response, the company is eliminating less profitable household goods and cutting costs. It’s also doing a good job of developing new products and finding new markets for existing ones. These moves will give Procter more room to adjust its prices without hurting its profit margins. They’ll also provide more cash for share buybacks and dividend hikes. PROCTER & GAMBLE CO. $84 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $226.8 billion; Price-to-sales ratio: 2.9; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.pg.com) began operating in 1837 and is now one of the world’s largest makers of household and personal care products....
INTERNATIONAL BUSINESS MACHINES CORP. $162 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 997.6 million; Market cap: $161.6 billion; Priceto- sales ratio: 1.8; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.ibm.com) is selling its computer chip manufacturing operations to Globalfoundries Inc. However, IBM will not get any payment for these assets. Instead, it will pay $1.5 billion to Globalfoundries to take over this money-losing business. IBM has also agreed to buy chips from Globalfoundries for the next 10 years. This move is part of IBM’s plan to focus on its more-profitable computer services and software divisions....
These four firms provide vital services to banks, credit card companies and other financial clients. They’re also market leaders with well-established brands, which makes it hard for competitors to lure away their customers. Even so, not all of them are buys right now. STATE STREET CORP. $68 (New York symbol STT; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 423.5 million; Market cap: $28.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 1.8%; TSINetwork Rating: Average; www.statestreet.com) sells accounting and administrative services to large institutional investors, like mutual funds and pension plans. The company’s fee income rises and falls with the value of the mutual funds and other securities it administers. Thanks to improving stock markets and new contracts, its assets under custody and administration rose to $28.4 trillion as of June 30, 2014, up 10.3% from a year earlier....
PEPSICO INC. $94 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $141.0 billion; Price-to-sales ratio: 2.2; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.pepsico.com) has launched Pepsi True, a new cola that has 30% less sugar than regular Pepsi. This new drink uses stevia, an all-natural sweetener without the calories or health drawbacks of sugar. Pepsi True will also contain no artificial sweeteners or high-fructose corn syrup. The launch follows a nine-year decline in U.S. soft drink sales as a result of increased health concerns spurred by research linking these drinks to obesity and other conditions....
MONSANTO CO. $113 (New York symbol MON, Aggressive Growth Portfolio; Manufacturing & Industry sector; Shares outstanding: 524.4 million; Market cap: $59.3 billion; Price-to-sales ratio: 3.9; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.monsanto.com) gets 70% of its revenue from genetically modified seeds for corn, soybeans and other crops. The remaining 30% comes from selling herbicides, mainly under the Roundup brand. In its 2014 fiscal year, which ended August 31, 2014, Monsanto’s earnings rose 10.4%, to $2.7 billion from $2.5 billion in 2013. Per-share earnings gained 13.5%, to $5.22 from $4.60, on fewer shares outstanding. Without unusual items, such as costs to settle a lawsuit, earnings per share rose 14.7%, to $5.23 from $4.56. Sales rose 6.7%, to $15.9 billion from $14.9 billion. Seed sales gained 3.9%, as record soybean seed demand offset weaker sales of corn seeds. Sales of other agricultural products rose 13.1%....
SNAP-ON INC. $126 (New York symbol SNA; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 58.1 million; Market cap: $7.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.4%; TSINetwork Rating: Average; www.snapon.com) makes tools for auto mechanics and sells them through a fleet of franchised vans that visit garages. It also makes specialized tools for mining companies, electrical power plant operators and other industrial customers. The company plans to spend $75 million to $80 million in 2014 on upgrades to its distribution network, developing new products and expanding in emerging markets (overseas customers supply around a third of its revenue). Snap-On is also fueling its growth with acquisitions. In May 2013, it bought Challenger Lifts for $38.2 million. This business makes systems that raise cars off the ground. The purchase contributed $39.3 million to Snap-On’s 2013 revenue of $3.1 billion....