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
AASTRA TECHNOLOGIES, $19.82, symbol AAH on Toronto, develops and markets products and systems for accessing communication networks, including the Internet. Its technology is centred around business telephone systems and includes products that integrate land lines and mobile phones. In the three months ended December 31, 2012, the company’s sales fell 12.3%, to $175.2 million from $199.7 million a year earlier. Sales declined in all regions, including Western Europe, where Aastra gets the majority of its revenue. Excluding the impact of foreign exchange rates, sales declined 7.1% from a year earlier. Earnings per share rose sharply, to $2.42 from $1.30, due to a number of one-time items, including income-tax recoveries. Without those items, Aastra would have earned $1.15 a share in the latest quarter....
WAL-MART STORES INC., $70.40, New York symbol WMT, reported better-than-expected earnings this week. In its 2013 fiscal year, which ended January 31, 2013, Wal-Mart’s sales rose 5.0%, to $469.2 billion from $447.0 billion in fiscal 2012. Acquisitions added $4.0 billion to its 2013 sales. However, unfavourable currency exchange rates cut sales by $4.5 billion. If you disregard currency rates, Wal-Mart’s sales would have risen 5.1%. Sales at the company’s U.S. stores (which supply 59% of the total) rose 3.9%, and same-store sales gained 1.8%. That’s mainly because Wal-Mart’s ongoing cost cuts are giving it more room to cut its prices. Sales at the international stores (29% of the total) gained 7.4%, while sales at the company’s Sam’s Club warehouse outlets (12%) rose 4.9%....
FIRSTSERVICE CORP., $32.12, symbol FSV on Toronto, serves the following areas of the real estate market: commercial real estate, residential property management and property improvement. In the three months ended December 31, 2012, the company’s revenue rose 6.3%, to $632.5 million from $594.9 million a year earlier (all figures except share prices in U.S. dollars). Excluding one-time items, earnings per share jumped 30.8%, to $0.68 from $0.52. Revenue rose at two of FirstService’s three divisions: commercial real estate (up 23%) and residential property management (up 10%)....
McDonald’s continues to benefit from its ongoing plan to serve better food and upgrade its restaurants. Since 2003, this strategy has helped the company increase its annual sales by 3% to 5%. Its yearly profits have grown at a much faster pace of 6% to 7%.
These gains may seem modest compared to fast-growing technology companies, like Google....
These gains may seem modest compared to fast-growing technology companies, like Google....
YUM! BRANDS INC. $65 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 451.0 million; Market cap: $29.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.yum- .com) was the first fast-food chain to enter China, in 1987....
Most income-seeking investors focus on utilities or banks instead of stocks in the more cyclical industrial sector. However, these four industrial firms are leaders in their niche industries, which helps cut their risk. As well, they have long histories of maintaining or raising their dividends, even during economic slowdowns.
GENUINE PARTS CO....
GENUINE PARTS CO....
APACHE CORP. $75 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 392.0 million; Market cap: $29.4 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.1%; TSINetwork Rating: Average; www.apachecorp.com) spent $16 billion buying oil and gas properties in the past three years, which helped increase its long-term debt to $11.4 billion....
MONDELEZ INTERNATIONAL INC. $27 (Nasdaq symbol MDLZ; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.8 billion; Market cap: $48.6 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.mondelezinternational.com) makes cookies and biscuits (Oreo, Chips Ahoy and Ritz); chocolate bars (Cadbury, Toblerone) and gum and candy (Trident, Chiclets and Halls cough drops).
On October 1, 2012, the old Kraft Foods broke itself into two publicly traded companies: Mondelez and Kraft Foods Group (Nasdaq symbol KRFT).
In its first quarter as a separate company, which ended December 31, 2012, Mondelez’s revenue fell 1.9%, to $9.5 billion from $9.7 billion a year earlier....
On October 1, 2012, the old Kraft Foods broke itself into two publicly traded companies: Mondelez and Kraft Foods Group (Nasdaq symbol KRFT).
In its first quarter as a separate company, which ended December 31, 2012, Mondelez’s revenue fell 1.9%, to $9.5 billion from $9.7 billion a year earlier....
PROCTER & GAMBLE CO. $77 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $207.9 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.pg.com) is one of the world’s largest makers of household and personal-care products....
These two software makers continue to spend heavily on research. That hurts their earnings, but it helps them compete in their rapidly changing industry. Right now, we prefer Symantec for new buying.
ADOBE SYSTEMS INC. $39 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 498.8 million; Market cap: $19.5 billion; Price-to-sales ratio: 4.4; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) earned $307.9 million in the fourth quarter of its 2012 fiscal year, which ended November 30, 2012....
ADOBE SYSTEMS INC. $39 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 498.8 million; Market cap: $19.5 billion; Price-to-sales ratio: 4.4; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) earned $307.9 million in the fourth quarter of its 2012 fiscal year, which ended November 30, 2012....