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
YAMANA GOLD $15.95 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 745.4 million; Market cap: $12.2 billion; Dividend yield: 0.7%) owns six operating gold mines in Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina, and has four other properties in advanced stages of development. In the three months ended June 30, 2011, Yamana’s revenue jumped 63.1%, to $573.3 million from $351.4 million a year earlier (all figures except share price and market cap in U.S. dollars). Cash flow per share rose 69.2%, to $0.44 from $0.26. The company raised its production, and gold prices hit new record highs. During the quarter, Yamana produced 278,737 ounces of gold, up 10.1% from 253,264 ounces a year earlier. Its selling price for gold rose 25.6%....
IMPERIAL METALS $22.45 (Toronto symbol III; TSINetwork Rating: Speculative) (604-669-8959; www.imperialmetals.com; Shares outstanding: 37.5 million; Market cap: $800.5 million) owns the Mount Polley copper/gold mine and the Huckleberry copper/molybdenum mine, both in B.C. The company’s cash flow per share rose 30.4% in the three months ended June 30, 2011, to $0.30 from $0.23. Higher gold and copper prices were the main reason for the gains. Imperial aims to use the cash flow from its existing mines to build a $228-million open-pit mine on its Red Chris copper/gold property in northwestern B.C. The company bought Red Chris in 2007....
PASON SYSTEMS $12.77 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 91.3 million; Market cap: $1.0 billion; Dividend yield: 2.8%) rents equipment for monitoring and managing oil and gas rigs. It also sells communications systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas companies and drilling contractors throughout Canada, the U.S., Mexico and Argentina. In the three months ended June 30, 2011, Pason’s revenue rose 22.3%, to $62.4 million from $51.0 million a year earlier. The company benefited as its clients increased their drilling, especially for shale gas and oil. Earnings rose 33.5%, to $8.2 million, or $0.10 a share, from $6.2 million, or $0.08 a share. The increased drilling pushed up Pason’s earnings. Strong demand also let the company raise its prices. Cash flow per share rose 21.7%, to $0.28 from $0.23....
COMPUTER MODELLING GROUP $13.93 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403- 531-1300; www.cmgroup.com; Shares outstanding: 37.6 million; Market cap: $502.5 million; Dividend yield: 3.2%) reports that its revenue rose 32.2% in the three months ended June 30, 2011, to $15.9 million from $12.1 million a year earlier. Earnings rose 57.6%, to $6.7 million, or $0.18 a share, from $4.2 million, or $0.12 a share....
CIMAREX ENERGY $66.72 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 86.1 million; Market cap: $5.5 billion; Dividend yield: 0.6%) produces and explores for oil and natural gas. Gas makes up 55% of its output. Cimarex’s properties are in the Mid-Continent region of the U.S., which includes Oklahoma, Kansas and Texas; the Permian Basin of western Texas and southeastern New Mexico; and the Texas Gulf Coast. In the three months ended June 30, 2011, Cimarex’s production averaged a record 585.7 million cubic feet of natural gas equivalent per day (including oil). That’s down 1.5% from a year earlier. The company did not offset natural declines at its Gulf Coast wells with new production....
ALIMENTATION COUCHE-TARD $28.34 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 242.4 million; Market cap: $6.9 billion; Yield: 0.9%) is the largest convenience-store operator in Canada, with over 2,000 outlets. It also has nearly 3,700 U.S. stores. In the three months ended July 17, 2011, Couche-Tard’s earnings rose 9.9% to $139.5 million, or $0.76 a share. A year earlier, it earned $126.9 million, or $0.68 a share (all figures except share prices in U.S. dollars). Sales rose 23.9%, to $5.2 billion from $4.2 billion. The gains came from higher fuel prices, the stronger Canadian dollar and higher merchandise sales. Couche-Tard continues to introduce new products with higher profit margins, including new drinks and improved fresh and take-out food....
DOREL INDUSTRIES $23.55 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com;Shares outstanding: 32.8 million; Market cap: $729.3 million; Dividend yield: 2.5%) makes a wide range of products, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; home furnishings, including chairs, tables, bunk beds, futons and step stools; and recreational products, including bicycles. It has 4,700 employees, and plants in 19 countries. In the three months ended June 30, 2011, Dorel’s sales rose 1.9%, to $619.0 million from $607.7 million a year earlier (all figures except share price in U.S. dollars). The recreational/leisure division’s sales rose 15.9%, mainly on strong demand for bicycles. That offset lower sales at the other divisions. Still, earnings per share fell 30%, to $0.70 from $1.00 a year earlier, due to rising shipping and raw-material costs. The company didn’t pass on all of these price increases to its customers, due to continuing economic weakness in the U.S. and Europe....
THE CHURCHILL CORP. $13.98 (Toronto symbol CUQ: TSINetwork Rating: Speculative) (780-454-3667; www.churchillcorporation.com; Shares outstanding: 24.6 million; Market cap: $338.2 million; Dividend yield: 3.4%) continues to win new contracts for its Stuart Olson Dominion Construction division. The latest is a $98-million deal to build an office tower in B.C. The company expects to begin construction in March 2012, and should finish the building in April 2015. Churchill has also won a $60-million contract to renovate the Tache Hall Music Art and Theatre complex for the University of Manitoba. The company plans to start work in October 2011, and complete the project by July 2014....
MOSAID TECHNOLOGIES INC. $38.90 (Toronto symbol MSD; TSINetwork Rating: Extra Risk) (613-599-9539; www.mosaid.com; Shares outstanding: 12.1 million; Market cap: $466.2 million; Dividend yield: 2.6%) has rejected the $38-a-share, all-cash takeover offer from Wi-LAN Inc. (symbol WIN on Toronto) as too low. Mosaid mainly licenses patented computer chip and telecommunications technology, including patents for technology used in smartphones and laptops. The company has formed a special committee of its board of directors to look at ways to maximize shareholder value. It has also retained Barclays Capital Canada and GMP Securities as financial advisors, and Davies Ward Phillips & Vineberg LLP as legal advisors to the special committee. Mosaid is now trading at $38.90 a share, or 2.4% above Wi-LAN’s bid. This indicates that investors are anticipating that Mosaid will be able to attract a higher offer from Wi-LAN or another bidder....
CAMECO CORP. $20.73 (Toronto symbol CCO; TSINetwork Rating: Extra Risk) (306-956-6200; www.cameco.com; Shares outstanding: 395.4 million; Market cap: $8.1 billion; Dividend yield 1.9%) has launched a hostile takeover bid for Hathor Exploration (symbol HAT on Toronto). Cameco is offering $520 million, or $3.75 a share. Hathor’s main exploration properties are on the east side of the Athabasca Basin. Right now, it is focusing its exploration on the Roughrider zone at its Midwest Northeast property, where it has found significant uranium mineralization over the last couple of years. Roughrider could hold as much as 57.9 million pounds of uranium. It is also near Cameco’s Rabbit Lake mill. Cameco holds cash of $1.2 billion, or $3.30 a share, so it can easily afford to buy other mining firms that enhance its long-term growth prospects....