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
DELPHI ENERGY $1.16 (Toronto symbol DEE; TSINetwork Rating: Speculative) (403- 265-6171; www.delphienergy.ca; Shares outstanding: 131.2 million; Market cap: $152.2 million; No dividends paid) has raised $33 million in two share issues: the company sold 17.2 million shares at $1.45 each and 4.6 million shares for $1.75 each. The company produces and explores for oil (about 75% of production) and natural gas (25% of production). Delphi plans to use the proceeds from the share issues to pay down debt. As of June 30, 2012, its long-term debt was $134.4 million. That’s a high 88% of its $152.2-million market cap (or the value of all of its outstanding shares). However, that mainly reflects the drop in the company’s share price due to lower natural gas prices....
CHEMTRADE LOGISTICS INCOME FUND $15.49 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics. com; Units outstanding: 41.7 million; Market cap: $645.9 million; Dividend yield: 7.8%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base-metal processors. These companies create sulphur, acid and other by-products as part of their activities. Chemtrade converts these substances into useful chemicals, like sulphuric acid. In June 2011, Chemtrade bought Marsulex Inc. for $419.5 million. Marsulex provides a range of environmental services, including improving air quality and treating and handling industrial waste. In the three months ended September 30, 2012, Chemtrade’s revenue fell 10.3%, to $240.9 million from $268.5 million a year earlier. Cash flow per unit fell 25.0%, to $0.72 from $0.96. However, the decline was mostly due to a one-time accounting charge. The 2011 quarter was also particularly strong....
IAMGOLD $11.98 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464- 9999; www.iamgold.com; Shares outstanding: 376.5 million; Market cap: $4.5 billion; Dividend yield: 2.1%) fell 23% after it reported cash flow of $0.30 a share in the three months ended September 30, 2012. That was down sharply from $0.46 a share a year earlier. Gold prices remained steady, but production fell 7.7%, to 205,000 ounces from 225,000 ounces. IAMGold gets 85% of its production from mines it owns and operates, but output continues to lag at its other mines. IAMGold’s longer-term prospects are strong—new mines will double its production within five years. It also holds cash of $1.1 billion. However, its short-term growth prospects have slowed....
REITMANS (CANADA) LTD. $11.98 (Toronto symbol RET.A; TSINetwork Rating: Extra Risk) (514- 384-1140; www.reitmans.com; Shares outstanding: 65.5 million; Market cap: $784.7 million; Dividend yield: 6.7%) owns 918 women’s clothing stores across Canada. The chain consists of 360 Reitmans, 154 Penningtons, 152 Smart Set, 110 Addition Elle, 74 Thyme Maternity and 68 RW & Co. stores. In the three months ended July 28, 2012, Reitmans earned $27.4 million, or $0.42 a share. That was down 12.5% from $31.7 million, or $0.48 a share, a year earlier. Revenue was down 2.2%, to $279.5 million from $286.1 million. Same-store sales declined 1.3%....
WESTJET AIRLINES $18.55 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1- 877-493-7853; www.westjet.com; Shares outstanding: 126.9 million; Market cap: $2.4 billion; Dividend yield: 1.7%) reports that its revenue rose 11.8% in the three months ended September 30, 2012, to $866.5 million from $775.3 million a year earlier. Earnings jumped 79.9%, to $70.6 million from $39.3 million. That’s a new record for the second quarter. The higher revenue pushed up the company’s earnings. WestJet aims to start up its new shorthaul Canadian regional airline, which it has now named WestJet Encore, by the end of 2013. Encore will serve smaller centres with Bombardier turboprop planes....
STANTEC INC. $36.68 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 45.9 million; Market cap: $1.7 billion; Dividend yield: 1.6%) sells a range of consulting, project delivery, design and technology services. Stantec’s clients operate in a variety of industries, including transportation, construction and oil and gas. In the three months ended September 30, 2012, Stantec’s revenue rose 12.4%, to $483.7 million from $430.4 million a year earlier. Acquisitions were one reason for the gains. Stantec is also working on several new projects. Earnings rose 17.9%, to $34.1 million, or $0.74 a share, from $28.9 million, or $0.63. Stantec continues to grow by acquisition. In 2011, it bought five companies. Its purchases this year include engineering-consulting firm Cimarron Engineering, which develops, designs, installs and maintains oil and gas pipeline systems and station facilities. Demand for these services is growing quickly....
AIMIA INC. $14.80 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 172.3 million; Market cap: $2.6 billion; Dividend yield: 4.3%) has agreed to raise its stake in Club Premier Loyalty & Marketing, the loyalty program of Grupo Aeromexico, Mexico’s biggest airline. This move is part of Aimia’s plan to diversify its operations geographically. Aimia will pay $88 million U.S. to increase its interest to 49% from 29%. Grupo Aeromexico will continue to own 51%. Club Premier is Mexico’s leading loyalty program, with more than 2.8 million members and 50 partners. Club Premier members can earn and redeem points on Aeromexico, which offers 550 daily flights throughout the Americas and to Europe and Asia. As well, members can earn points on 14 other airlines, including Delta and Air France-KLM....
ATLANTIC TELE-NETWORK $36.75 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 15.6 million; Market cap: $573.3 million; Yield: 2.7%) reported strong earnings in the latest quarter, even though revenue declined.
In the three months ended September 30, 2012, Atlantic’s revenue fell 2.9%, to $188.8 million from $194.3 million a year earlier....
In the three months ended September 30, 2012, Atlantic’s revenue fell 2.9%, to $188.8 million from $194.3 million a year earlier....
FORTRESS PAPER $7.00 (Toronto symbol FTP; TSINetwork Rating: Extra Risk) (1-888- 820-3888; www.fortresspaper.com; Shares outstanding: 14.5 million; Market cap: $101.5 million; No dividends paid) lost $18.1 million, or $1.26 a share, in the three months ended September 30, 2012. A year earlier, it lost $7.7 million, or $0.54. Cash flow was negative $9.5 million, or $0.66 a share, in the latest quarter, compared to negative $3.7 million, or $0.26 a share. The company’s Dresden wallpaperproducts plant is profitable, but the Landqart security-paper operation is losing money because of the high Swiss franc. Increased competition is also making it difficult for Fortress to attract customers. As well, the Thurso dissolving pulp plant is having startup problems, and rising global production has pushed down selling prices sharply. Fortress holds cash of $83.8 million or $5.88 a share, but its long-term debt of $245 million is a very high 241% of its $101.5- million market cap. That’s a big risk factor, especially in a company that’s reporting negative cash flow....
INTUITIVE SURGICAL $526.46 (Nasdaq symbol ISRG; TSINetwork Rating: Average) (515-507-5000; www.intuitivesurgical.com; Shares outstanding: 39.8 million; Market cap: $21.0 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. This process is safer and much less invasive than regular surgery, and helps cut a patient’s recovery time and post-operative discomfort. It also reduces scarring and infection risk. In the three months ended September 30, 2012, Intuitive earned $183.3 million, or $4.59 a share. That’s up sharply from $122.4 million, or $3.13 a share, a year earlier. Revenue rose 20.4%, to $537.8 million from $446.7 million. Intuitive is debt-free, and holds cash of $2.7 billion, or $67.67 a share....