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
DOMINO’S PIZZA $26.01 (New York symbol DPZ; TSINetwork Rating: Average)(734-930-3030; www.dominos.com; Shares outstanding: 60.8 million; Market cap: $1.6 billion; No dividends paid) reports that in the three months ended June 19, 2011, it earned $25.2 million, or $0.40 a share. That’s up 11.5% from $22.6 million, or $0.37 a share, a year earlier. Sales rose 6.2%, to $384.9 million from $362.4 million. Same-restaurant sales rose 4.5% in the U.S. and 7.4% internationally. The consensus estimates were for earnings of $0.36 a share on sales of $372 million. The company paid more for food ingredients, but that was offset by lower costs for labour, rent and interest....
MOSAID TECHNOLOGIES INC. $39.66 (Toronto symbol MSD; TSINetwork Rating: Extra Risk) (613-599-9539; www.mosaid.com; Shares outstanding: 12.1 million; Market cap: $479.9 million; Dividend yield: 2.5%) is now the subject of a takeover bid from Wi-LAN Inc. (symbol WIN on Toronto). The offer is for $38 a share in cash for all of Mosaid’s shares. Mosaid mainly licenses patented computer chip and telecommunications technology, including patents for technology used in smartphones and laptops. Mosaid is now trading at $39.66 a share, or above Wi-LAN’s bid. This indicates that investors are anticipating a higher or rival offer....
DUNDEE REIT $30.90 (Toronto symbol D.UN; TSINetwork Rating: Speculative) (416-365-3535; www.dundeereit.com; Shares outstanding: 58.9 million; Market cap: $2.0 billion; Dividend yield: 7.1%) will buy 29 office buildings in Ontario and Alberta for $831.8 million. The sellers are U.S.-based Blackstone Real Estate Advisors LP and Canadian firm Slate Properties. As part of the agreement, Dundee will sell off five of these properties for $142 million. The 24 properties it will keep are worth $689.8 million, and cover 2.7 million square feet. Eleven of these buildings are in Toronto’s financial district, two are outside the city’s downtown, two are in Ottawa, five are in Calgary and four are in Edmonton. The deal should close on August 15, 2011. Dundee has now spent $1.6 billion on acquisitions in 2011. That follows $900 million of acquisitions in 2010....
GOODYEAR TIRE & RUBBER CO. $13.34 (New York symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 247.0 million; Market cap: $3.4 billion; No dividends paid) is the world’s largest tire maker. The company operates over 60 plants in 25 countries. In the three months ended June 30, 2011, the company’s sales rose 24.1%, to a record $5.6 billion from $4.5 billion a year earlier. North American sales climbed 17.7%. Sales rose 33.5% in Europe, the Middle East and Africa; 21.0% in Latin America; and 36.4% in the Asia-Pacific region. Before one-time items, the company earned $0.65 a share, compared with $0.12 a share a year earlier. The latest earnings were much higher than the consensus estimate of $0.27 a share. The record sales and a shift toward higher-priced items were the main reasons for the higher earnings. The company also cut its costs, including pension expenses....
MACY’S INC., $25.55, New York symbol M, operates 850 Macy’s and Bloomingdale’s department stores in 45 states. It also sells goods over the Internet. The company reported higher-than-expected sales and earnings this week. In the three months ended July 30, 2011, Macy’s earnings rose 63.9%, to $241 million from $147 million a year earlier. Earnings per share rose 57.1%, to $0.55 from $0.35, on more shares outstanding. That was well ahead of the consensus estimate of $0.48 a share. Sales rose 7.3%, to $5.9 billion from $5.5 billion. That beat the consensus sales estimate of $5.8 billion. Same-store sales rose 6.4%. The company continues to benefit from its plan to tailor its merchandise to local tastes. Its private-label products are also selling well. In addition, Macy’s has been improving its customer service. That helps build customer loyalty....
CALIAN TECHNOLOGIES, $19.10, symbol CTY on Toronto, operates in two areas: the business and technology services division, which accounts for 74% of Calian’s revenue, provides engineers, health-care workers and other professionals to clients on a contract basis. The systems-engineering division contributes the remaining 26% of revenue, and sells hardware and software that is used for testing, operating and managing satellite and other communication systems. In the three months ended June 30, 2011, Calian’s revenue rose 1.7%, to $58.5 million from $57.6 million a year earlier. However, earnings fell 10.2%, to $3.5 million or $0.45 a share, from $3.8 million or $0.49 a share. This was mostly due to a slowdown in government contracts during the spring federal election campaign, and the higher Canadian dollar....
When investors see a day like Thursday, with a drop of more than 500 points in the Dow Jones Industrials, they can’t help but wonder if we face a replay of the 2007-2009 market plunge. However, though today’s situation could turn out badly, that’s not inevitable. It’s much different from a few years ago. The 2007-2009 drop was mostly about the collapse of the housing boom and everything that went with it. Today there is no boom that could deflate and bring down the economy. Today’s problem grows out of government attempts at ‘fixing’ the economy in recent years. These fixes, which were mostly unsuccessful, bloated government spending and created huge debts. Today’s main market worry is how the U.S. federal government will attempt to fix its budget deficit and bring its debt down to a manageable level. To top things off, the Obama administration has also brought in big changes in health care, union and environmental rules and so on. Some of these changes face court challenges and political opposition. But some are sure to survive and go into effect. Others are sure to follow....
When investors see a day like Thursday, with a drop of more than 500 points in the Dow Jones Industrials, they can’t help but wonder if we face a replay of the 2007-2009 market plunge. However, though today’s situation could turn out badly, that’s not inevitable. It’s much different from a few years ago. The 2007-2009 drop was mostly about the collapse of the housing boom and everything that went with it. Today there is no boom that could deflate and bring down the economy. Today’s problem grows out of government attempts at ‘fixing’ the economy in recent years. These fixes, which were mostly unsuccessful, bloated government spending and created huge debts. Today’s main market worry is how the U.S. federal government will attempt to fix its budget deficit and bring its debt down to a manageable level. To top things off, the Obama administration has also brought in big changes in health care, union and environmental rules and so on. Some of these changes face court challenges and political opposition. But some are sure to survive and go into effect. Others are sure to follow....
TUPPERWARE BRANDS CORP., $62.49, New York symbol TUP, makes high-quality household products, including plastic food and beverage containers and educational toys. It also makes wide range of cosmetics, bath oils and fragrances. Tupperware reported better-than-expected quarterly earnings this week. However, the company makes many of its products from oil-based plastic resins, and the cost of these materials is rising. That will probably slow Tupperware’s earnings growth in the second half of 2011. That caused the stock to fall 12%. In the three months ended July 2, 2011, Tupperware’s sales rose 18.5%, to $669.9 million from $565.1 million a year earlier. The company gets over 70% of its sales from outside the U.S. If you exclude the positive impact of currency-exchange rates, sales would have risen 9% in the latest quarter. Earnings rose 34.4%, to $1.25 a share from $0.93. That beat the consensus estimate of $1.18 a share....
ACI WORLDWIDE, $36.17, symbol ACIW on Nasdaq, makes software used to process transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. In March 2011, ACI bought ICD Corp. for an undisclosed amount. ICD has over 140 customers who use its software to authorize credit- and debit-card transactions through over 70 different payment processors, including banks and credit-card companies. ACI’s revenue rose 22.7% in the three months ended June 30, 2011, to $113.4 million from $92.4 million a year earlier. The company earned $9.8 million, or $0.29 a share, compared to a loss of $150,000, or nil per share, a year earlier. The company holds cash of $170.8 million, or $4.98 a share....