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.
Read More
Close
Growth Stocks Library Archives
INTACT FINANCIAL CORP. $63.96 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 129.6 million; Market cap: $8.3 billion; Dividend yield: 2.5%) is Canada’s largest provider of property and casualty insurance, based on premiums. Its brands include Intact Insurance, Canada BrokerLink, belairdirect and Grey Power. In the three months ended March 31, 2012, Intact’s revenue rose 47.9%, to $1.58 billion from $1.07 billion. That was mainly due to the contribution from AXA Canada, which Intact bought from Paris-based ASX Group for $2.6 billion last year. AXA Canada is the country’s sixth-largest home, auto and commercial insurer. It also gives Intact a presence in Quebec, B.C. and Atlantic Canada....
Facebook is selling shares to the public. Starting May 18, the stock will trade on Nasdaq under the symbol FB. Due to strong investor demand, the issue price will likely be between $34 and $38 a share, up from an earlier range of $28 to $35. It’s entirely possible that this new issue will shoot up on the first day it trades, but as a company to invest in, at the price they’re selling it for, we don’t recommend the shares. Here’s a link to a video with my thoughts on Facebook’s share issue on our tsinetwork.ca website: http://tsinet.ca/Lb1m6s...
ACI WORLDWIDE $40.01 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 39.8 million; Market cap: $1.6 billion; No dividends paid) makes software that is used to process transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. In mid-February 2012, ACI completed its purchase of S1 Corp. for $540 million in cash and stock. This acquisition is a good fit: S1 sells transaction software for banks, credit unions, retailers and other payment processors. It has over 3,000 clients worldwide. In the first quarter of 2012, ACI’s revenue rose 31.6%, to $137.6 million from $104.5 million a year earlier. The gain was largely due to S1’s $22.5-million contribution. Without acquisition-related costs, earnings per share rose sharply, to $0.28 from $0.05....
TEMPUR-PEDIC $49.38 (New York symbol TPX; TSINetwork Rating: Speculative) (800- 878-8889; www.tempurpedic.com; Shares outstanding: 63.8 million; Market cap: $3.2 billion; No dividends paid) reported higher sales and earnings in the latest quarter. However, the company’s earnings estimate for 2012 was below expectations. The stock has since dropped 41%. In the three months ended March 31, 2012, Tempur-Pedic’s earnings per share rose 26.5%, to $0.86 from $0.68. Sales rose 18.0%, to $384.4 million from $325.8 million. Tempur-Pedic expects to earn $3.80 to $3.95 a share in 2012 on revenue of $1.6 billion to $1.65 billion. That’s below the consensus estimate of $3.97 a share on revenue of $1.66 billion....
SHERRITT INTERNATIONAL $5.26 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 296.7 million; Market cap: $1.6 billion; Dividend yield: 2.9%) is a diversified natural resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 376 megawatts of power generation capacity in Cuba. Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to finishing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan. It is also Canada’s largest thermal coal producer. In the three months ended March 31, 2012, Sherritt’s revenue fell 2.6%, to $462.2 million from $474.5 million a year earlier. Lower nickel prices were the main reason for the decline. Cash flow fell 17.0%, to $117 million, or $0.40 a share, from $141 million, or $0.48 a share. That was due to the lower revenue and higher production costs....
PASON SYSTEMS $14.24 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403- 301-3400; www.pason.com; Shares outstanding: 81.9 million; Market cap: $1.1 billion; Dividend yield: 3.1%) reported 31.8% higher revenue in the three months ended March 31, 2012, to $111.7 million from $84.7 million a year earlier. Many of the company’s clients increased their drilling, especially for shale gas and oil. Earnings jumped 66.0%, to $29.5 million, or $0.36 a share, from $17.8 million, or $0.22 a share. Pason has raised its semi-annual dividend by 10%, to $0.22 from $0.20. The shares now yield 3.1%. The company is heavily reliant on the resource sector. However, Pason’s revenue and earnings should keep rising as oil and gas drilling continues to increase....
WESTJET AIRLINES $15.48 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 130.8 million; Market cap: $2.0 billion; Dividend yield: 1.6%) serves 76 destinations in North America and the Caribbean. Its fleet of 98 modern Boeing Next-Generation 737s are 30% more fuel efficient than older aircraft. WestJet is scheduled to receive 37 more 737s through 2018. In the three months ended March 31, 2012, West- Jet’s revenue rose 15.3%, to $781.5 million from $692.2 million a year earlier. Earnings jumped 41.6%, to $68.3 million from $48.2 million. That’s a new record for the first quarter. It also marks the company’s 28th consecutive quarter of profitability. The higher revenue was the main reasons for the gain. Earnings per share rose 47.1%, to $0.50 from $0.34, on fewer shares outstanding....
IAMGOLD $9.38 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 376.1 million; Market cap: $3.5 billion; Dividend yield: 2.7%) is buying Trelawney Mining and Exploration (symbol TRR on Toronto). Prices of junior mining stocks are depressed, so IAMGold is getting a bargain at $608 million, or $3.30 for each Trelawney share. That’s a premium on the $2.30 it was trading at before IAMGold’s offer, but it’s well below the high of $5.91 that Trelawney shares hit in July 2011. Trelawney’s Cote Lake gold project, located between Timmins and Sudbury, could hold as much as 6.9 million ounces of gold. The deal also lets IAMGold expand its operations in politically safe countries; its biggest mines are in Suriname and Burkina Faso in West Africa....
Natural gas prices recently dropped below $2 U.S. per thousand cubic feet, their lowest level in 10 years. That’s because new shale gas discoveries and record warm temperatures have increased inventories. Prices have since moved up somewhat, to $2.70. The low prices have pushed down shares of producers that rely heavily on natural gas, including Bellatrix Exploration and Delphi Energy (below). Even so, the long-term outlook for natural gas prices, and for both these stocks, remains positive. BELLATRIX EXPLORATION $3.49 (Toronto symbol BXE; TSINetwork Rating: Speculative) (403-266- 8670; www.bellatrixexploration.com; Shares outstanding: 107.5 million; Market cap: $375.2 million; No dividends paid) produces oil and natural gas in Alberta, B.C. and Saskatchewan. Gas makes up about 61% of its output; the remaining 39% is oil....
THE CHURCHILL CORP. $12.40 (Toronto symbol CUQ; TSINetwork Rating: Speculative) (780-454-3667; www.churchillcorporation.com; Shares outstanding: 24.3 million; Market cap: $301.3 million; Dividend yield: 3.9%) reports that its revenue rose 9.4% in the three months ended March 31, 2012, to $333.3 million from $304.7 million a year earlier. That’s because the industrial services company’s mining and oil sands clients increased their construction activity. Even so, earnings fell 46.6%, to $3.1 million, or $0.13 a share, from $5.8 million, or $0.24 a share. That was mostly due to lowprofit- margin contracts that the company took on as part of its recent acquisitions, or when its markets were more competitive in late 2008, 2009 and early 2010. Most of these unfavourable deals should be completed by the end of this year. Churchill is still a buy.