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
DOMINO’S PIZZA INC., $55.98, symbol DPZ on New York, is the world’s largest chain of pizza stores that offer takeout and delivery. It operates10,040 outlets in the U.S. and over 70 other countries. Franchisees run most of these stores. Excluding one-time items, the company’s earnings per share rose 25.5% in the quarter ended March 24, 2013, to $0.59 from $0.47 a year earlier. Sales rose 8.6%, to $417.6 million from $384.6 million. Same-store sales rose 6.5% internationally and 6.2% in the U.S. Domino’s continues to boost its sales by aggressively promoting its new pizza recipes. It’s also profiting by moving into ordering online and through software applications, or apps, on smartphones. In addition, Domino’s still has lots of growth potential overseas....
DIEBOLD INC., $29.66, New York symbol DBD, makes automated teller machines (ATMs), vaults and building-security systems. This week, the company announced a major new restructuring plan, including job cuts, selling certain plants and merging customer service activities. These moves should cut its annual costs by $100 million to $150 million by the end of 2015. The lower costs will make Diebold more profitable, particularly as the uncertain economy prompts banks to cut spending on new ATMs. In the three months ended March 31, 2013, Diebold’s revenue fell 9.3%, to $633.5 million from $698.5 million a year earlier....
APPLE INC., $417.20, Nasdaq symbol AAPL, earned $9.5 billion, or $10.09 a share, in three months ended March 30, 2013. That’s down 17.9% from $11.6 billion, or $12.30 a share, a year earlier. Even so, the latest earnings beat the consensus estimate of $9.98 a share. Sales rose 11.3%, to $43.6 billion from $39.2 billion. That also beat the consensus estimate of $42.3 billion. The company sold 37.4 million iPhones, up 6.7% from a year earlier, and 19.5 million iPads, up 65.1%. It also sold 4.0 million Mac computers (down 1.6%) and 5.6 million iPods (down 26.6%). Apple recently launched a smaller, cheaper version of the iPad, called the iPad mini. It has also cut the selling price of older iPhones to help boost sales in developing markets. As a result, gross margin (gross profits as a percentage of sales) fell to 37.5% from 47.4%....
FAIR ISAAC CORP., $44.18, symbol FICO on New York, makes FICO Scores, a computer program that helps businesses make better decisions about customer creditworthiness. FICO Scores dominates this niche market. In addition, Fair Isaac continues to profit by selling software that helps credit card issuers control fraud and analyze cardholders’ spending patterns. In its fiscal 2013 second quarter, which ended March 31, 2013, Fair Isaac’s earnings per share before one-time items rose 4.4% from a year ago, to $0.69 from $0.66. Revenue rose 12.4%, to $179.3 million from $159.5 million. That’s largely because the company recently acquired Adeptra, which makes systems that let businesses communicate with customers through a range of channels, including voice, instant messaging, mobile applications and email. Fair Isaac continues to spend around 8% of its revenue on research. That lets it keep producing innovative new products that help it stay ahead of its competitors....
IBM reported disappointing earnings for the first quarter of 2013. That’s because businesses put off signing deals for new computers and related services due to the uncertain economy.
We like IBM’s long-term outlook as much as ever. The company is in a strong position to profit from several trends, including cloud computing and data analytics....
We like IBM’s long-term outlook as much as ever. The company is in a strong position to profit from several trends, including cloud computing and data analytics....
HEWLETT-PACKARD CO. $20 (New York symbol HPQ; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.9 billion; Market cap: $38.0 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.7%; TSINetwork Rating: Average; www.hp.com), like IBM (see left), wants to cut its reliance on selling computer hardware....
Two of our food stocks— Heinz and D.E. Master Blenders (see box this page)— have recently attracted takeover offers. These companies drew buyers for the same reasons we recommended them: their steady earnings and top brands.
We also like the outlook for the five food makers below, particularly ConAgra, our top pick for 2013....
We also like the outlook for the five food makers below, particularly ConAgra, our top pick for 2013....
D.E. MASTER BLENDERS 1753 N.V. $16 (U.S. over-the-counter market symbol DEMBF; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 594.9 million; Market cap: $9.5 billion; Price-to-sales ratio: 2.6; No dividends paid; TSINetwork Rating: Average; www.demasterblenders1753.com) makes coffee and tea under a variety of brands, including Senseo, Pickwick and Douwe Egberts....
NEWMONT MINING CORP. $34 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 496.8 million; Market cap: $16.9 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.0%; TSINetwork Rating: Average; www.newmont.com) produced 1.2 million ounces of gold in the first quarter of 2013, down 10.9% from a year earlier....
THE BOEING CO. $91 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 756.2 million; Market cap: $68.8 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.boeing.com) has received approval from U.S....