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
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....
RUSSEL METALS $21.53 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 67.0 million; Market cap: $1.3 billion; Dividend yield: 5.6%) is one of North America’s largest metal distributors. The company serves its roughly 30,000 customers through a network of 50 locations in Canada and 12 in the U.S. In the three months ended June 30, 2011, Russel’s earnings per share rose 26.8%, to $0.52 from $0.41 a year earlier. Revenue rose 22.1%, to $618.6 million from $506.6 million. The company distributed more steel during the quarter, even though flooding in western Canada pushed down demand for pipe for oil drilling. Steel prices weakened, but the company was able to keep its profits high, because it does a good job of controlling its costs....
GOOGLE INC., $524.85, Nasdaq symbol GOOG, has paid an undisclosed sum for privately held Zagat, which publishes reviews of restaurants, hotels, theatres and other tourist attractions in over 100 countries. Zagat, which was founded in 1979, bases its ratings on information it receives from consumer surveys. It then sells this information through printed guides and its web site. Zagat will give Google access to local content that is not available to other Internet-search providers. As well, the company can add Zagat’s reviews to its other services, like Google Maps, which displays street maps and helps users find their way to their destinations. Zagat’s reviews should also enhance the appeal of mobile devices powered by Google’s Android operating system....
IAMGOLD CORP., $22.39, symbol IMG on Toronto, owns the Niobec niobium mine in Quebec. Niobium is a rare metal that when used as an additive makes steel stronger, more heat resistant and easier to weld. Niobium is widely used in automobiles and oil and gas pipes. Right now, China accounts for about 25% of worldwide niobium consumption. IAMGold’s Niobec mine produces about 8% of the world’s niobium supply. The company is considering selling a 10% to 20% stake in Niobec, and using the proceeds to fund the mine’s expansion. After that, the company will consider selling more of the mine. IAMGold’s plan for Niobec looks especially attractive this week, after a consortium of five state-owned Chinese companies announced that they are buying 15% of the world’s largest niobium producer for $1.95 billion in cash. Brazil’s Companhia Brasileira de Metalurgia e Mineraçào, or CBMM, produces more than 80% of the world’s niobium supply....
AT&T INC., $28.05, New York symbol T, fell 3% this week after the Department of Justice said it would launch a court challenge to block the company’s deal to buy rival wireless carrier T-Mobile from Germany’s Deutsche Telekom AG. Adding T-Mobile would make AT&T the largest wireless carrier in the U.S., with 132 million subscribers. Regulators feel that the purchase would give AT&T too much control over the wireless market, and lead to higher rates for customers. AT&T is paying $39 billion ($25 billion in cash, and $14 billion in stock) for T-Mobile. That’s equal to 23% of AT&T’s $166.2-billion market cap. If the deal falls through, AT&T will pay Deutsche Telekom $3 billion, and give it the rights to some of its wireless spectrum....
CAMECO CORP., $22.23, symbol CCO on Toronto, 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. This region contains all of Canada’s producing uranium mines, and accounts for 23% of global production. Right now, Hathor is exploring for uranium at its Midwest Northeast project, which is close to producing properties owned by Cameco and AREVA of France....
APPLE INC., $383.58, Nasdaq symbol AAPL, announced this week that Steve Jobs has resigned as its chief executive officer. However, he will continue as chairman of Apple’s board of directors. Jobs’ health has been an ongoing risk factor for Apple investors. That’s because has played a large role in developing some of Apple’s most successful products, such as the iPhone and iPad. The stock fell 6% on the news, but quickly recovered. That’s because Jobs has hired executives who will probably continue to create innovative products....