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.
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Growth Stocks Library Archives
INTUITIVE SURGICAL $510 (Nasdaq symbol ISRG; TSINetwork Rating: Average) (515-507-5000; www.intuitivesurgical.com; Shares outstanding: 40.2 million; Market cap: $20.5 billion; No dividends paid) makes the da Vinci, a computerized surgical system.
Guided by a miniature camera connected to a 3-D monitor, surgeons use the da Vinci to operate by remotely manipulating tiny robotic arms....
Guided by a miniature camera connected to a 3-D monitor, surgeons use the da Vinci to operate by remotely manipulating tiny robotic arms....
PFIZER INC., $29.09, New York symbol PFE, sold 19.8% of its animal-health subsidiary to the public in February 2013. This business, ZOETIS INC., $30.80, New York symbol ZTS, makes drugs and vaccines for livestock and pets. Next week, Pfizer plans to hand out its remaining 80.2% of Zoetis to its own shareholders. Investors will be able to swap all or part of their Pfizer shares for Zoetis stock. Pfizer shareholders can tender some or all of their stock for Zoetis shares. Pfizer has designed the offer so that its investors get Zoetis shares at a 7% discount. For each $100 worth of Pfizer shares tendered, holders could receive a maximum of $107.52 worth of Zoetis. Pfizer has also structured the exchange so that participating investors will not have to pay capital gains taxes until they sell their new shares....
DOREL INDUSTRIES, $35.10, symbol DII.B on Toronto, fell over 10% this week after it announced that its earnings will fall below expectations in the current quarter. Dorel makes a wide range of products, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational products, mainly bicycles. Continued poor weather across the U.S., Canada and Europe has led to lower-than-expected sales volumes, particularly for bicycles (which account for roughly 34% of Dorel’s sales). The slowdown has also prompted the company’s competitors in the bicycle industry to cut their prices....
INTERNATIONAL BUSINESS MACHINES CORP., $206.35, New York symbol IBM, is paying an undisclosed sum for SoftLayer Technologies. Based in Dallas, Texas, this privately held firm sells online data-storage space and related services to 21,000 business clients. It has 13 data centres in the U.S., Asia and Europe. IBM expects to complete this purchase by September 30, 2013. Demand for cloud computing, which mainly involves storing data on remote, secure servers, is growing strongly. That’s because it gives cost-conscious businesses access to better services and software without the high cost of buying and setting up their own servers. SoftLayer’s technology will enhance IBM’s cloud-computing expertise and help it increase its annual revenue from this field to $7 billion by 2015. To put that in context, IBM’s total revenue was $104.5 billion in 2012....
WESTJET AIRLINES LTD., $21.70, symbol WJA on Toronto, reports that its load factor fell slightly in May 2013, to 78.5% from 79.2% a year earlier. Load factor is the percentage of available seats that are occupied by paying passengers. However, the decline was only slight, even though the company increased its capacity by 9.1% to meet higher demand. Revenue passenger miles (the total number of paying passengers on each plane multiplied by the distance travelled in miles) rose 8.2% in the latest quarter. Demand for the company’s flights remains high, and it has entered into new partnerships with other airlines; these were the main reasons for the increased number of passengers....
TEMPUR-PEDIC INTERNATIONAL INC., $42.28, symbol TPX on New York, is changing its name to Tempur Sealy International. Its stock will continue to trade under the TPX symbol. Tempur-Pedic completed its $1.3-billion purchase of rival Sealy Corp. in March 2013. This was a major acquisition for Tempur-Pedic, but it lets the company diversify into the market for traditional spring-coil beds. That should help it offset rising competition in its current business. The company makes and distributes Swedish mattresses and neck pillows made from its proprietary Tempur material, which conforms to the body to provide support and help alleviate pressure points. Simmons Bedding Co. and Serta Inc. have both successfully launched memory-foam mattresses that directly compete with Tempur-Pedic’s products....
YUM BRANDS INC., $67.75, New York symbol YUM, has opened a new KFC fried chicken restaurant in Ulaanbaatar, the capital city of Mongolia. This is the first fast-food restaurant in Mongolia. The local franchisee that owns and operates this outlet plans to open 15 more over the next five years. This business’s outlook is bright. Mongolia’s economy is growing strongly, and chicken is becoming more popular. Yum and its partner will also develop new dishes that cater to local tastes....
Big telecom companies like AT&T and Verizon continue to spend large sums upgrading their networks. That hurts their current earnings. However, these investments help them keep up with rising demand for faster wireless and Internet access, and this expands their long-term growth potential.
Better networks will also help AT&T and Verizon hang on to customers in the face of new competition from Google (see right).
We like the outlook for both stocks, but value-seeking investors may prefer AT&T for its lower p/e ratio and higher dividend yield.
AT&T INC....
Better networks will also help AT&T and Verizon hang on to customers in the face of new competition from Google (see right).
We like the outlook for both stocks, but value-seeking investors may prefer AT&T for its lower p/e ratio and higher dividend yield.
AT&T INC....
GOOGLE INC. $868 (Nasdaq symbol GOOG; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 331.8 million; Market cap: $288.0 billion; Priceto- sales ratio: 5.5; No dividends paid; TSINetwork Rating: Above Average; www.google.com) now sells Internet and TV services through its own fibreoptic networks in Kansas City, Missouri, Austin, Texas, and Provo, Utah....
Windstream and Frontier serve rural areas and smaller cities, so they face less competition than larger telecom firms like AT&T and Verizon. That should help them maintain their dividends. However, their high debt levels and p/e ratios add risk.
WINDSTREAM CORP....
WINDSTREAM CORP....