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
NEWELL RUBBERMAID INC., $29.32, New York symbol NWL, fell 6% this week after the company warned that its earnings for the first quarter of 2014 would miss the consensus forecast. Harsh winter weather has prompted many shoppers to stay home. That has hurt sales of Newell’s household products, like trash cans, pens and food-storage containers. As well, the company had to recall 3.8 million infant car seats to fix a defective seat belt. These factors will cut Newell’s first-quarter earnings by $0.03 to $0.04 a share. As a result, it will probably earn $0.33 a share, compared to the consensus estimate of $0.35....
SASOL LTD. (ADR), $52.87, symbol SSL on New York, has developed a technology to convert coal and natural gas into motor fuels. The company is now the world’s largest producer of fuel from coal at its facility in Secunda, South Africa. It also makes synthetic fuels from natural gas at plants in Qatar and Nigeria. In addition, Sasol has substantial chemical production interests and produces oil and gas in Africa. It’s also South Africa’s third-largest coal producer. In Sasol’s 2014 fiscal first half, which ended December 31, 2013, its revenue rose 23.1%, to 98.3 billion South African rand (1 rand = $0.10 U.S.) from 79.9 billion rand in the first half of fiscal 2013. Earnings per ADR rose 25.7%, to 30.19 rand from 24.01 rand. Oil prices were relatively flat, and chemical prices were higher. The U.S. dollar also rose against the South African rand, which increased the value of Sasol’s sales outside South Africa....
DOMINO’S PIZZA INC., $79.34, symbol DPZ on New York, is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 10,800 outlets in the U.S. and over 70 other countries. Franchisees run most of them. In the three months ended December 29, 2013, the company’s earnings per share rose 21.9%, to $0.78 from $0.64 a year earlier, beating the consensus estimate of $0.76. Sales gained 5.0%, to $566.5 million from $539.7 million. Same-store sales rose 7.0% internationally and 3.7% in the U.S. Domino’s continues to boost its sales by aggressively promoting its new pizza recipes. It’s also profiting as more customers order online and through smartphone apps. In addition, Domino’s still has lots of growth potential overseas....
ARCHER DANIELS MIDLAND CO., $41.33, New York symbol ADM, processes corn, wheat, soybeans, canola, flax seed, peanuts, cocoa and other crops into a wide variety of food ingredients, such as flour, oils and sweeteners. It is also the largest maker of ethanol from corn in the U.S. The company owns port facilities, inland grain elevators and an oilseed processing plant in Ukraine. These assets continue to operate normally, despite the political turmoil in that country. As well, the new Ukrainian government has pledged to protect the country’s large agricultural industry. The country accounts for 17% the world’s wheat exports and 16% of its corn shipments....
VERIZON COMMUNICATIONS INC., $47.56, New York symbol VZ, has completed its purchase of the 45% of Verizon Wireless that it didn’t already own from U.K.-based Vodafone Group (Nasdaq symbol VOD). The company now owns 100% of Verizon Wireless, which sells wireless services to 102.8 million subscribers in the U.S. In 2013, it supplied 67% of Verizon’s revenue and 81% of its earnings. Verizon paid $130 billion in cash and shares for Vodafone’s stake. To put that in context, Verizon’s market cap (or the total value of all its outstanding shares) is $196.7 billion....
ACI WORLDWIDE INC., $59.84, symbol ACIW on Nasdaq, makes software that processes transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. Its products also help cut fraud. In the quarter ended December 31, 2013, ACI’s revenue rose 26.4%, to $283.2 million from $224.1 million a year earlier. That’s mainly due to contributions from two acquisitions it made in 2013: Online Resources Corp., which it bought for $126.6 million, and Official Payments Holdings ($109.0 million). These moves helped ACI further expand into online banking and bill payments. Earnings per share rose 3.2% to $1.30 from $1.26....
The new Affordable Care Act (or Obamacare) has forced pharmaceutical firms like Pfizer to cut the price of prescription drugs they sell through the Medicaid program. The new law will also increase the use of cheaper generic competitors.
However, Obamacare also extends health coverage to 32 million more Americans, which will push up demand for all drugs....
However, Obamacare also extends health coverage to 32 million more Americans, which will push up demand for all drugs....
YUM! BRANDS INC. $73 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 442.9 million; Market cap: $32.3 billion; Price-to-sales ratio: 2.6; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.yum .com) will soon start selling breakfast foods and coffee through 5,500 of its Taco Bell outlets in the U.S.
The new breakfast menu features the Waffle Taco, a warm waffle wrapped around either bacon or sausage, with scrambled eggs, cheese and maple syrup....
The new breakfast menu features the Waffle Taco, a warm waffle wrapped around either bacon or sausage, with scrambled eggs, cheese and maple syrup....
A great way for investors to gain international exposure is through multinationals that trade on New York as American Depositary Receipts (ADRs). To qualify as ADRs, they have to conform to U.S. accounting and listing requirements, which cuts their risk.
These three foreign firms lead their industries and are expanding in fast-growing markets....
These three foreign firms lead their industries and are expanding in fast-growing markets....
MOLSON COORS BREWING CO. $57 (New York symbol TAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 184.2 million; Market cap: $10.5 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.6%; TSINetwork Rating: Average; www.molson coors.com) continues to make progress integrating StarBev LP, which it bought for $3.4 billion in June 2012....