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
CAMPBELL SOUP CO. $43 (www.campbellsoupcompany.com) reported that its sales rose 2.7% in the fiscal year ended August 3, 2014, to $8.3 billion from $8.05 billion in fiscal 2013. That’s mainly due to acquisitions and price increases, which offset weaker sales of canned soup in the U.S. Earnings per share fell 1.2%, to $2.45 from $2.48. However, the company plans to launch 200 new products in fiscal 2015, which should help raise its annual sales to $10 billion within the next five years. Buy. VERIZON COMMUNICATIONS INC. $50 (www.verizon.com) has increased its quarterly dividend by 3.8%, to $0.55 a share from $0.53. The new annual rate of $2.20 yields 4.4%. Best Buy. CHEVRON CORP. $124 (www.chevron.com) plans to sell $10 billion worth of less-important assets over the next three years. That’s equal to 4% of its $235.2-billion market cap. It will invest the cash in bigger projects, like two offshore gas projects in Australia. Best Buy.
CONAGRA FOODS INC., $33.61, New York symbol CAG, rose 4% this week after reporting better-than-expected earnings.
In its fiscal 2015 first quarter, which ended August 24, 2014, ConAgra’s earnings form ongoing operations fell 16.6%, to $111.2 million, or $0.25 a share....
In its fiscal 2015 first quarter, which ended August 24, 2014, ConAgra’s earnings form ongoing operations fell 16.6%, to $111.2 million, or $0.25 a share....
CARFINCO FINANCIAL GROUP INC., $11.33, symbol CFN on Toronto, is the subject of a friendly takeover bid from Banco Santander of Spain (ADR symbol SAN on New York). The offer is for $11.25 a share in cash. Carfinco will also pay a special dividend of up to $0.10 a share when the deal closes. Carfinco is now trading at $11.33, which is just about equal to the value of the cash and special dividend. The company’s directors and executive officers, who collectively own a 12.9% stake, have agreed to support the deal. However, Carfinco could attract a rival bid, or significant shareholders, such as mutual funds, could hold out for a higher offer....
CHEMTRADE LOGISTICS INCOME FUND $20.95 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics.com; Units outstanding: 60.2 million; Market cap: $1.3 billion; Dividend yield: 5.7%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and basemetal processors. These companies create by-products like sulphur and acid, which Chemtrade turns into useful chemicals like sulphuric acid. In the three months ended June 30, 2014, Chemtrade’s revenue rose 30.4%, to $318.1 million from $217.5 million a year earlier. The gain was largely due to General Chemical Corp., which Chemtrade bought for $860.9 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....
TIM HORTONS $88.70 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 132.8 million; Market cap: $11.8 billion; Dividend yield: 1.4%) has accepted a friendly takeover offer from Burger King Worldwide (New York symbol BKW). Tim Hortons shareholders can opt to receive $88.50 a share in cash or 3.0879 Burger King shares (currently worth $105.54). Burger King will limit the overall cash payout, so most investors will likely receive $65.50 in cash and 0.8025 of a share, for a total value of $90.54....
REITMANS (CANADA) LTD. $6.17 (Toronto symbol RET.A; TSINetwork Rating: Extra Risk) (514-384- 1140; www.reitmans.com; Shares outstanding: 64.5 million; Market cap: $395.9 million; Dividend yield: 3.2%) owns 900 women’s clothing stores across Canada. The chain consists of 343 Reitmans, 143 Penningtons, 113 Smart Set, 102 Addition Elle, 76 RW & Co. and 68 Thyme Maternity stores. It also has 21 Thyme Maternity boutiques in some Canadian Babies “R” Us locations. In the three months ended August 2, 2014, Reitmans’ sales rose 1.9%, to $258.3 million from $253.4 million a year earlier. Same-store sales increased 4.6%....
ALIMENTATION COUCHE-TARD $35.09 (Toronto symbol ATD.B; TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 565.8 million; Market cap: $20.0 billion; Dividend yield: 0.5%) reported higher sales and record earnings in the latest quarter, as well as a dividend increase. In the three months ended July 20, 2014, Couche-Tard’s sales rose 3.2%, to $9.2 billion from $8.9 billion a year earlier. Per-share earnings gained 23.1%, to $0.48 from $0.39. The company raised its quarterly dividend by 12.5% with the September 2014 payment, to $0.045 a share from $0.04. The stock now yields 0.5%....
CHESAPEAKE ENERGY $25.35 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chkenergy.com; Shares outstanding: 665.8 million; Market cap: $16.9 billion; Dividend yield: 1.4%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 72% gas and 28% oil. Chesapeake’s shares have nearly doubled since mid- 2012, when activist investor Carl Icahn bought a stake in the firm. Icahn, who has a history of pushing companies to make changes that raise shareholder value, subsequently replaced four of Chesapeake’s eight board members with his nominees. The company also pushed out controversial co-founder, CEO and chairman Aubrey K. McClendon. The company continues to restructure by selling non-essential properties and assets. That lets it pay down debt and focus on areas with strong potential....
AMAZON.COM $324.00 (Nasdaq symbol AMZN; TSINetwork Rating: Extra Risk) (206- 266-1000; www.amazon.com; Shares outstanding: 462.0 million; Market cap: $149.7 billion; No dividends paid) has acquired gaming network Twitch Interactive for about $970 million in cash. The company reportedly outbid Google. Twitch, which was founded in 2011, is a popular Internet video channel for broadcasting and watching people playing video games. The website is estimated to be the fourth-largest source of U.S. Internet traffic, behind Netflix, Google and Apple. Gaming—especially mobile gaming—is a new area of focus for Amazon. Twitch is a leader, with more than 55 million users. It generates revenue from both subscriptions and advertising....
PASON SYSTEMS $32.79 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 82.7 million; Market cap: $2.7 billion; Dividend yield: 2.1%) is trading near all-time highs as it continues to benefit from the boom in U.S. shale oil and gas drilling. Pason rents equipment for monitoring and managing oil and gas rigs. It also sells communication technology, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas producers and drilling contractors in Canada, the U.S., Mexico, Argentina and Australia. In the three months ended June 30, 2014, the company’s revenue rose 26.1%, to $103.8 million from $82.4 million a year earlier. Pason saw higher sales in all markets, but especially in the U.S....