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
PLEASE NOTE: Next week, Stock Pickers Digest, our newsletter for aggressive investors, will reveal its #1 pick for 2012. ALCOA INC., $9.80, New York symbol AA, plans to cut its aluminum production by 12% in 2012. The move is in response to falling aluminum prices, which are down 27% from their 2011 peak. As part of this plan, the company will permanently close its smelter in Tennessee and shut down part of a smelter in Texas. It will also cut production at high-cost smelters in Italy and Spain....
PLEASE NOTE: Next week, Stock Pickers Digest will reveal its #1 pick for 2012. Don’t miss this unique opportunity to profit. RUGGEDCOM INC., $24.76, symbol RCM on Toronto, is still the target of a hostile takeover bid from U.S. cable and networking equipment manufacturer Belden Inc. RuggedCom makes computer-networking equipment that is used in harsh environments. Belden recently reaffirmed its offer of $22 in cash for each RuggedCom share....
PLEASE NOTE: Next week, The Successful Investor, our newsletter that focuses on high-quality Canadian stocks, will reveal its #1 pick for 2012. Don’t miss this unique opportunity to profit. MACY’S INC., $34.56, New York symbol M, rose 7% this week after it reported better-than-expected sales for December 2011. Same-store sales during the month were 6.2% higher than in December 2010. That beat the consensus estimate of a 5% rise. The company now expects same-store sales for its full 2012 fiscal year, which ends January 31, 2012, to be 5.3% higher than fiscal 2011. That’s up from its earlier prediction of a gain of 4.8% to 5.0%....
PLEASE NOTE: Next week, The Successful Investor, our newsletter that focuses on high-quality Canadian stocks, will reveal its #1 pick for 2012. Don’t miss this unique opportunity to profit. DEVON ENERGY CORP., $64.76, symbol DVN on New York, has agreed to sell a one-third interest in five shale oil and gas fields to giant Chinese state-owned petroleum and chemical company Sinopec (symbol SNP on New York). Shale oil and shale gas are trapped in rock formations. To extract them, companies must pump water and chemicals into the rock. This fractures the rock and releases the oil or gas....
PLEASE NOTE: This is our last Hotline for 2011. Our next Hotline will go out on Friday, January 6, 2012. AT&T INC., $29.66, New York symbol T, has cancelled its plan to buy rival wireless carrier T-Mobile from Germany’s Deutsche Telekom AG. Adding T-Mobile would have made AT&T the largest wireless carrier in the U.S., with 132 million subscribers. However, the company doesn’t believe that regulators will approve the purchase....
PLEASE NOTE: This is our last Hotline for 2011. Our next Hotline will go out on Friday, January 6, 2012. EUROPEAN GOLDFIELDS, $12.13, symbol EGU on Toronto, is now the subject of a friendly takeover bid from Eldorado Gold (symbol ELD on Toronto). The offer is for 0.85 of an Eldorado share and $0.0001 in cash for each European Goldfields share. European Goldfields’ board of directors has approved the takeover. European Goldfields’ Skouries and Olympias gold projects in Greece and its Certej project in Romania would be good fits for Eldorado, which has mines in Greece and Turkey....
Gold prices have moved down from their peak of $1,918 an ounce in August 2011 to today’s price of $1,595. Gold could move higher in the long term, but it will remain volatile. In addition, a deeper drop is by no means out of the question. We continue to recommend that you focus your gold investing on gold-mining stocks and avoid buying gold bullion, gold coins (unless you collect them as a hobby) or certificates representing an interest in bullion. That’s because these investments have hidden costs, such as insurance and storage, that dramatically cut their value over time. Newmont remains our top choice among gold stocks. Most of its production comes from politically stable areas, such as North America and Australia. As well, its new dividend policy gives investors an opportunity to automatically profit when gold prices rise....
INTEL CORP. $23 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.1 billion; Market cap: $117.3 billion; Price-to-sales ratio: 2.3; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.intel.com) warned that its revenue in the fourth quarter of 2011 will fall to $13.7 billion, down from its earlier forecast of $14.7 billion. Factories in Thailand produce half of the world’s computer hard drives, and flooding in that country has led to shortages. As a result, computer makers have cut production and are ordering fewer chips from Intel. Chip sales should rise over the next few months as hard-drive production returns to normal. As well, the shortage will not affect demand for Intel’s more-profitable server chips. Moreover, Intel gets 57% of its revenue from fast-growing markets in Asia, and just 13% from Europe....
The three companies below aim to complete corporate breakups in 2012. Breakups generally help unlock hidden value and lead to above-average results in the years after the split. (See two good examples of strong post-split performance — Moody’s and Dun & Bradstreet — also in this issue). Moreover, the new, smaller companies could become attractive takeover candidates. KRAFT FOODS INC. $36 (New York symbol KFT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.8 billion; Market cap: $64.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.kraft.com) plans to break itself into two separate, publicly traded companies by the end of 2012. One company will sell snack foods, such as Oreo cookies, Cadbury chocolates, Trident gum and Tang powdered beverages. This business will have annual sales of $32 billion, with 42% of that coming from developing markets, such as China, Brazil and India....
FORD MOTOR CO. $10 (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.8 billion; Market cap: $38.0 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.0%; TSINetwork Rating: Extra Risk; www.ford.com) stopped paying dividends in June 2006 to conserve cash for a major restructuring plan. This plan helped turn the company around, and it is now seeing stronger vehicle sales. As a result, it will resume quarterly dividend payments of $0.05 a share. The $0.20 annual rate yields 2.0%. In light of the new dividend, we’ve upgraded Ford’s TSINetwork Rating from Speculative to Extra Risk....