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
HEWLETT-PACKARD CO. $14 (www.hp.com) recently wrote down its August 2008 purchase of Electronic Data Systems, provides computer services to large government agencies and corporations. It also wrote down its August 2011 purchase of U.K.-based Autonomy Corp., whose products help businesses organize a variety of information....
Wall Street Stock Forecaster Hotline. Friday, December 14, 2012 Dear client,...
Stock Pickers Digest Hotline. Friday, December 14, 2012 Dear client,...
WESTJET AIRLINES $20.05 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 133.8 million; Market cap: $2.7 billion; Dividend yield: 1.6%) serves 81 destinations in North America, Central America and the Caribbean. Its fleet of 100 modern Boeing 737s are 30% more fuel efficient than older jets. WestJet is scheduled to receive 35 more 737s through 2018. In the three months ended September 30, 2012, the company’s revenue rose 11.8%, to $866.5 million from $775.3 million a year earlier. Demand for its flights remains high, and it has entered into new partnerships with other airlines. Earnings per share jumped 89.3%, to $0.53 from $0.28. WestJet has a hidden asset in its non-union workforce, which helps keep its costs down. Many flyers also find that its service is friendlier than unionized airlines. As well, most of its workers are shareholders....
WestJet (see left) was trading at $14.10 when we made it our #1 Stock of the Year for 2011. It was a year late getting started, but it’s now hitting new highs. Alimentation Couche-Tard $49.82, symbol ATD.B on Toronto, was our #1 pick for 2012 in Stock Pickers Digest at $30.55. Its shares are now up 63.1%. Canadian Pacific $98.57, symbol CP on Toronto, was our 2012 #1 pick for The Successful Investor at $69. It’s up 42.9%....
AEROPOSTALE INC. $13.20 (New York symbol ARO; TSINetwork Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding: 81.3 million; Market cap: $1.1 billion; No dividends paid) is a mall-based retailer of casual clothing and accessories. It now has 994 stores in the U.S., Canada and Puerto Rico, and mainly targets 14- to 17-year-old women and men. Aeropostale’s 99 P.S. from Aeropostale stores in the U.S. are aimed at seven- to 12-year-old elementary-school children. In the three months ended October 27, 2012, Aeropostale’s sales rose 1.6%, to $605.9 million from $596.5 million a year earlier. Same-store sales fell 2%, compared with a 9% decline a year ago. Sales from the company’s e-commerce business increased 12%, to $51.1 million from $45.7 million. Aeropostale’s earnings rose 3.5%, to $24.9 million from $24.1 million a year earlier. Earnings per share rose 3.3%, to $0.31 from $0.30, on fewer shares outstanding. The latest earnings also beat the consensus estimate of $0.29 a share....
ALIMENTATION COUCHE-TARD $49.82 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 179.4 million; Market cap: $8.9 billion; Dividend yield: 0.6%) saw its sales rise 80.8% in the latest quarter, mostly due to its $2.7-billion acquisition of Norway’s Statoil Fuel & Retail (all figures except share price and market cap in U.S. dollars). Earnings per share rose 53.2%, to $0.95 from $0.62. The company’s profit growth has slowed lately, largely because of a price war among U.S. cigarette makers. This is sharply lowering Couche-Tard’s profit margins. High gasoline prices are causing motorists to cut back on driving. That’s hurting fuel sales volumes, which is cutting the profit margins on the fuel the company does sell....
WAJAX CORP. $39.60 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.7 million; Market cap: $661.3 million; Dividend yield: 8.2%) sells and services heavy equipment, including cranes and forklifts. It also sells related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions). Wajax operates through 118 dealerships across Canada. Its customers are in the natural resource, construction, manufacturing, industrial processing and transportation industries. In the quarter ended September 30, 2012, Wajax’s revenue fell 1.5%, to $356.4 million from $361.9 million a year earlier. Earnings fell 9.4%, to $16.2 million, or $0.97 a share, from $17.9 million, or $1.08 a share....
AIMIA INC. $14.72 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 172.3 million; Market cap: $2.5 billion; Dividend yield: 4.4%) saw its revenue rise 1.0% in the nine months ended September 30, 2012, to $1.63 billion from $1.61 billion a year earlier. Excluding one-time items, earnings per share rose 33.8%, to $1.03 from $0.77. The company’s cost per mile awarded dropped significantly, partly because it is making better use of its computer systems. Redemptions also fell. Aimia continues to diversify its operations geographically. That’s offsetting the risk of its Canadian business: Air Canada, a major Aeroplan partner, is vulnerable to labour disputes that can disrupt its service....
TRILOGY ENERGY CORP. $28.25 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290- 2900; www.trilogy.com; Shares outstanding: 116.5 million; Market cap: $3.3 billion; Dividend yield: 1.5%) owns oil and gas properties in the Kaybob and Grande Prairie areas of central Alberta. About 62% of Trilogy’s production is natural gas. The remaining 38% is oil. In the three months ended September 30, 2012, Trilogy produced 33,412 barrels of oil equivalent per day (including gas). That’s up 15.1% from 29,035 barrels a year earlier. But even with the higher production, a 40.1% decline in gas prices pushed down the company’s cash flow per share by 21.6%, to $0.40 from $0.51. Trilogy pays out just 26% of its cash flow as dividends. That gives it a low 1.5% yield, but it’s also letting the company maintain an active drilling program. In the first three quarters of 2012, Trilogy spent $274 million on exploration and development, up 10.5% from $248 million in the same period a year earlier. The company drilled 55 wells, up 25.0% from 44....