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
It appears we worried some of our readers a few weeks ago, when we advised selling a number of our former buys and dropped them from our recommendations. Several readers asked if this was due to a change in our views about the market. In fact, we chose those stocks as sells due to our low expectations for the stocks themselves, not for the market as a whole. But stock-market trends did figure in our timing. After the sharp upturn in the market that began last summer, it’s only natural to brace for a period of stagnation or weakness. Our sells were all stocks that had been mediocre performers recently. In a bad market, they faced above-average risk of a sizeable drop....
Bank stocks tend to account for the bulk of most investors’ Finance-sector holdings. Banks are writing down fewer loans as the economy recovers and borrowers pay back their loans, but demand for new mortgages and other loans remains weak. To diversify your Finance holdings, we recommend investing in non-bank financial-services companies, such as these six. We have a high opinion of all of them, but not all are buys right now. VISA INC. $78 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 830.1 million; Market cap: $64.7 billion; Price-to-sales ratio: 7.5; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest retail electronic-payments network. The company processes credit, debit, prepaid and commercial payments under the Visa, Visa Electron, Interlink and PLUS brands....
GENERAL MILLS INC. $39 (New York symbol GIS, Conservative Growth Portfolio, Consumer sector; Shares outstanding: 638.4 million; Market cap: $24.9 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.generalmills.com) is buying 51% of the private company that makes Yoplait yogurt, as well as 50% of the company that holds the licensing rights to the brand....
APACHE CORP. $124 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 383.4 million; Market cap: $47.5 billion; Price-to-sales ratio: 3.5; Dividend yield: 0.5%; TSINetwork Rating: Average; www.apachecorp.com) plans to spend $8.1 billion to develop its oil and natural-gas projects in 2011, up 8.3% from its earlier estimate of $7.5 billion....
NVIDIA CORP. $18 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 595.1 million; Market cap: $10.7 billion; Price-to-sales ratio: 3.1; No dividends paid; TSINetwork Rating: Average; www.nvidia.com) is buying privately held Icera, which designs energy-efficient chips for cellphones....
The March 2011 earthquake and tsunami severely disrupted the operations of these two Japanese carmakers. Honda appears to be in a better position to recover from the disaster than Toyota.
TOYOTA MOTOR CO. ADRs $82 (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.7 billion; Market cap: $139.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.3%; TSINetwork Rating: Above Average; www.toyota.com) makes 40% of its vehicles in Japan....
TOYOTA MOTOR CO. ADRs $82 (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.7 billion; Market cap: $139.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.3%; TSINetwork Rating: Above Average; www.toyota.com) makes 40% of its vehicles in Japan....
SONY CORP. ADRs $28 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $28.0 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.0%; TSINetwork Rating: Average; www.sony.com) had to shut down its PlayStation Network for nearly a month because online intruders stole personal data....
INTEL CORP. $23 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.3 billion; Market cap: $121.9 billion; Price-to-sales ratio: 2.6; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.intel.com) has raised its quarterly dividend by 15.9%, to $0.21 a share from $0.18125. The new annual rate of $0.84 yields 3.7%. This is the second time Intel has raised its payout in the last six months. Meanwhile, Intel is focusing on developing new chips for mobile devices, like tablet computers. That will help it offset slowing personal computer sales. As well, demand for its chips for server computers is rising as more people use mobile devices to access the Internet. Intel expects revenue from chips for servers and storage devices to more than double in the next five years, to $20 billion from $8.7 billion in 2010. It reported overall revenue of $43.6 billion in 2010....
J.C. PENNEY CO. INC. $36 (New York symbol JCP; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 229.9 million; Market cap: $8.3 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.2%; TSINetwork Rating: Average; www.jcpenney.com) reported that its sales rose 0.4% in the three months ended April 30, 2011, to $3.94 billion from $3.93 billion a year earlier....
THE BOEING CO. $76 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 738.3 million; Market cap: $56.1 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.boeing.com) has struggled in the past few years, mostly due to production problems with its new 787 Dreamliner passenger jet.
The plane is now three years behind schedule....
The plane is now three years behind schedule....