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
RUSSEL METALS $33.17 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 61.0 million; Market cap: $2.0 billion; Dividend yield: 4.2%) reports that its revenue rose 12.4% in the quarter ended March 31, 2014, to $924.0 million from $821.8 million a year earlier. Earnings gained 33.6%, to $29.0 million, or $0.47 a share. A year earlier, the company earned $21.7 million, or $0.36. Russel holds cash of $86.3 million, or $1.41 a share. Its long-term debt of $458.3 million is a reasonable 22.0% of its market cap. The stock yields 4.2%. The company gets about 35% of its revenue from customers in the oil and gas drilling industry. That, plus its exposure to fluctuating steel prices, adds risk. However, Russel’s long-term outlook remains positive, and it is well-positioned to gain as the economy recovers....
AEROPOSTALE $4.68 (New York symbol ARO; TSINetwork Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding: 78.5 million; Market cap: $378.4 million; No dividends paid) is undertaking a number of major initiatives to increase its sales and profits.
These moves are in response to the slow U.S....
These moves are in response to the slow U.S....
TOROMONT INDUSTRIES LTD. $26.96 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 76.9 million; Market cap: $2.1 billion; Dividend yield: 2.2%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc....
MONDELEZ INTERNATIONAL INC., $37.96, Nasdaq symbol MDLZ, took its current form on October 1, 2012, when the old Kraft Foods Inc. broke itself into two publicly traded companies: Mondelez, which focuses mainly on snack foods, and Kraft Foods Group, which makes a variety of grocery products. The stock rose 7% this week after Mondelez agreed to merge its packaged coffee business with European coffee maker D.E. Master Blenders. (In June 2012, the old Sara Lee Corp., a former recommendation of ours, spun off D.E. Master. It later accepted a friendly takeover offer from Joh A Benckiser, a privately held German firm.)...
SHERRITT INTERNATIONAL CORP., $4.60, symbol S on Toronto, has fended off an attempt by activist investor George Armoyan and his firm, Clarke Inc. (symbol CKI on Toronto), to place three of its nominees on Sherritt’s board of directors. Together, they would have held a third of Sherritt’s nine board seats. Shareholders voted against the new directors at the company’s annual meeting on May 6. Meanwhile, Armoyan has put forward a number of proposals for Sherritt to cut costs, reduce its debt and better align what he sees as the interests of shareholders, management and the board directors....
NEWELL RUBBERMAID INC., $28.88, New York symbol NWL, makes a variety of everyday items, such as trash cans and food-storage containers. Aside from Rubbermaid, its main brands include Sharpie, Paper Mate, Waterman and Levolor. In the three months ended March 31, 2014, Newell’s sales fell 0.7%, to $1.23 billion from $1.24 billion a year earlier. That’s partly because harsh winter weather kept many shoppers at home. As well, the company had to recall infant car seats to fix defective seat belts. Newell gets about a third of its sales from outside the U.S. If you disregard the negative impact of currency exchange rates, sales rose 0.7% in the quarter....
GOODYEAR TIRE & RUBBER, $25.29, symbol GT on New York, is the world’s largest tire maker, with 52 plants in 22 countries. In the quarter ended March 31, 2014, Goodyear’s sales fell 7.9%, to $4.5 billion from $4.9 billion a year earlier. North American sales declined 13.3%, to $1.9 billion from $2.2 billion. Sales also fell 13.2% in Asia and 17.7% in Latin America. That offset a slight increase in Europe. Harsh winter weather hurt North American car and truck sales, which cut demand for new tires. The weather also slowed customer traffic to retailers, which hurt sales of replacement tires. The weakening of the Brazilian, Venezuelan and Australian currencies against the U.S. dollar also lowered Goodyear’s revenue....
APPLE INC., $571.94, Nasdaq symbol AAPL, rose 9% this week after it announced several moves to enhance its investment appeal. These initiatives include raising its quarterly dividend by 7.9%, to $3.29 a share from $3.05. The new annual rate of $13.16 yields 2.3%. Apple also increased its share buyback program by $30 billion. It can now repurchase up to $90 billion worth of its stock by the end of 2015. That’s equal to 18% of its $492.9-billion market cap. Apple will also split its outstanding shares on a 7-for-1 basis in June 2014. In addition to making its shares more affordable, the split would make Apple a candidate for the Dow Jones Industrial Average. If Apple does join the widely followed Dow, mutual funds and exchange traded funds that mimic the index would have to buy the stock, which would push up the share price....
YAMANA GOLD INC., $8.38, symbol YRI on Toronto, has succeeded in its joint $3.9-billion bid with Agnico Eagle Mines (symbol AEM on Toronto) for Osisko Mining (symbol OSK). Goldcorp (symbol G) has withdrawn its offer. Agnico Eagle and Yamana will now each own half of Osisko’s assets, including the Canadian Malartic gold mine in Quebec. The acquisition lets Yamana diversify beyond South America and Mexico, where it has seven mines. It should also boost the company’s per-share cash flow. Yamana Gold is still a buy....