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
WESTJET AIRLINES LTD., $21.36, symbol WJA on Toronto, moved up almost 7% this week after reporting record quarterly earnings. In the three months ended June 30, 2013, the company’s earnings rose 5.2%, to $44.7 million from $42.5 million a year earlier. That marks WestJet’s 33rd consecutive quarter of profitability. Earnings per share rose 9.7%, to $0.34 from $0.31, on fewer shares outstanding. Revenue increased 4.3%, to $843.7 million from $809.3 million a year earlier. WestJet shares fell as low as $19.65 earlier this week after reaching an all-time high of $25.47 in April 2013. The decline was mostly due to investor concern that the company’s profit growth could slow if it can’t fill the new planes it’s adding to the same level as its current fleet. That includes its new Canadian regional airline, WestJet Encore, which launched in June 2013....
AT&T INC. $35.60, New York symbol T, has agreed to buy Leap Wireless International (Nasdaq symbol LEAP), which provides wireless service to 4.6 million pay-as-you-go subscribers in 35 U.S. states under the Cricket brand. Regulators must still approve the deal, but AT&T expects to close it in the next six to nine months. The company will pay $4.0 billion, which includes Leap’s $2.8 billion of debt. To put that in context, AT&T earned $3.8 billion in the three months ended June 30, 2013. That’s down 2.1% from $3.9 billion a year earlier. However, due to fewer shares outstanding, earnings per share rose 7.6%, to $0.71 from $0.66. If you exclude a gain on the sale of part of its stake in a Mexican phone company, AT&T would have earned $0.67 a share in the latest quarter. That missed the consensus estimate of $0.68....
AIMIA INC., $15.35, symbol AIM on Toronto, rose as high as $16.63 this week after the Canadian Competition Tribunal dismissed a complaint that Visa Canada and MasterCard impose anti-competitive rules on merchants. Merchants want to place surcharges on consumers’ credit card purchases to offset fees they pay to Visa and MasterCard. Credit card companies and the banks that issue the cards currently split these fees, which range from 1.5% to 3%. The merchants also wanted to be able to choose not to accept premium credit cards, which charge higher fees. The current rules, set by credit card issuers, prohibit merchants from doing either of these things. Visa and MasterCard currently process over 90% of credit card transactions in Canada....
CISCO SYSTEMS INC. $26 (Nasdaq symbol CSCO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.3 billion; Market cap: $137.8 billion; Priceto- sales ratio: 2.9; Dividend yield 2.6%; TSINetwork Rating: Average; www.cisco.com) is a leading maker of hardware and software that links and manages computer networks....
Like Cisco (see page 71), sales and earnings growth at these four technology giants have waned, as they turn into traditional cyclical growth stocks that are more sensitive to swings in the overall economy.
However, they are still leaders in their fields....
However, they are still leaders in their fields....
INTERNATIONAL BUSINESS MACHINES CORP. $197 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $216.7 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.ibm.com) continues to enjoy strong demand for its software, as it helps businesses analyze large amounts of data and improve their efficiency....
CINTAS CORP. $48 (Nasdaq symbol CTAS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 122.3 million; Market cap: $5.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.3%; TSINetwork Rating: Average; www.cintas- .com) designs and makes uniforms, which it sells to over 900,000 businesses, mainly in North America....
FEDEX CORP. $106 (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 316.6 million; Market cap: $33.6 billion; Price-to-sales ratio: 0.8; Dividend yield: 0.6%; TSINetwork Rating: Average; www.fedex.com) delivers packages and documents in the U.S....
These two leading banks continue to benefit as more borrowers repay their loans on time. That’s helping them offset weaker demand for new residential mortgages and business loans. As well, both firms continue to cut costs, which gives them more room to raise their dividends.
WELLS FARGO & CO....
WELLS FARGO & CO....
MCDONALD’S CORP. $97 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.0 billion; Market cap: $97.0 billion; Price-to-sales ratio: 3.6; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.mcdonalds.com) plans to open its first restaurant in Vietnam next year.
This new outlet will face strong competition from other U.S....
This new outlet will face strong competition from other U.S....