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
BAFFINLAND IRON MINES $1.51 (Toronto symbol BIM; TSINetwork Rating: Start-up) (416-364-8820; www.baffinland.com; Shares outstanding: 343.1 million; Market cap: $518.1 million; No dividends paid) is now the subject of a joint takeover bid. Luxembourg-based ArcelorMittal, the world’s largest steelmaker, and rival bidder Nunavut Iron Ore Acquisition have teamed up to make this new bid. The new offer is for $1.50 a share for all of Baffinland’s shares. If the bid is successful, Arcelor will own 70% of Baffinland, and Nunavut will own 30%. Baffinland is now trading at $1.51 a share, or slightly above the new bid. This indicates that investors are still hoping for an even higher price, perhaps from another global steel company or a Chinese state-owned resource firm....
SHERRITT INTERNATIONAL CORP. $8.76 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 294.3 million; Market cap: $2.6 billion; Dividend yield: 1.7%) is a diversified natural-resource company that produces nickel, cobalt, thermal coal, oil and gas. It also licenses its own mining technologies to other metals companies, and manages 376 megawatts of power-generation capacity in Cuba. Toronto-based Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to completing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off the east coast of Africa. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan....
PLEASE NOTE: Next week, Stock Pickers Digest, our newsletter for aggressive investors, will reveal its #1 pick for 2011. If you’re not already a Stock Pickers Digest subscriber, click here to learn how you can get one month—including the Stock Pickers Digest Stock of the Year—FREE. VERIZON COMMUNICATIONS INC., $35.46, New York symbol VZ, announced this week that it had signed a new multi-year deal with APPLE INC., $348.48, Nasdaq symbol AAPL. The agreement will let Verizon sell Apple’s hugely popular iPhone 4 smartphone, starting in February 2011. The deal should help both companies. Adding the iPhone will help Verizon compete with AT&T (see below), which until now had been the exclusive U.S. iPhone carrier....
PLEASE NOTE: Next week, Stock Pickers Digest will reveal its #1 pick for 2011. Don’t miss this unique opportunity to profit. ZARGON OIL & GAS LTD., $21.90, symbol ZAR on Toronto, is the new name of Zargon Energy Trust following its conversion to a dividend-paying corporation on January 7, 2011. The move is in response to Ottawa’s new tax on income trust distributions, which came into effect on January 1, 2011. Zargon must now pay corporate taxes. As a result, it plans to lower its monthly dividend by 22.2% with the February 2011 payment. That will give the stock a 7.7% yield....
PLEASE NOTE: Next week, The Successful Investor, our newsletter that focuses on high-quality Canadian stocks, will reveal its #1 pick for 2011. If you’re not already a Successful Investor subscriber, click here to learn how you can get one month—including our 2011 stock of the year—FREE. MOTOROLA MOBILITY HOLDINGS INC., $33.06, New York symbol MMI, makes mobile phones and home-entertainment equipment. This week, shareholders of the old Motorola Inc. (New York symbol MOT) received one share of Motorola Mobility for every eight Motorola shares they own. Following the distribution, the old Motorola changed its name to Motorola Solutions (see below) and consolidated its shares on a 1-for-7 basis....
PLEASE NOTE: Next week, The Successful Investor, our newsletter that focuses on high-quality Canadian stocks, will reveal its #1 pick for 2011. If you’re not already a Successful Investor subscriber, click here to learn how you can get one month—including our 2011 stock of the year—FREE. RUBY TUESDAY INC., $14.84, symbol RT on New York, reported earnings that beat the consensus estimate this week. As a result, the stock jumped over 13%. Ruby Tuesday owns 676 of its U.S. restaurants; franchisees operate 140 outlets in the U.S. and 58 overseas....
PLEASE NOTE: This is our last Hotline for 2010. Our next Hotline will go out on Friday, January 7, 2011. VISA INC., $66.90, New York symbol V, fell 16% this week. That’s because the Federal Reserve proposed new limits on fees banks can charge for debit-card transactions. Companies that process these transactions, such as Visa and MasterCard Inc. (New York symbol MA), charge banks a percentage of the transaction’s cost. Right now, the average debit-card fee is 1.14%, or $0.44 per transaction. The Federal Reserve, acting under new legislation to regulate financial companies following the 2008 credit crisis, proposes to cap these fees at $0.12 per transaction. The proposals could also make it easier for new competitors to process transactions....
PLEASE NOTE: This is our last Hotline for 2010. Our next Hotline will go out on Friday, January 7, 2011. BAFFINLAND IRON MINES, $1.32, symbol BIM on Toronto, has received a revised hostile, $1.35-a-share takeover offer from Nunavut Iron Ore Acquisition. Baffinland earlier rejected an $0.80-a-share takeover offer from Nunavut. That bid was followed by a $1.10-a-share friendly offer from Luxembourg-based ArcelorMittal, the world’s largest steelmaker....
Broadridge began trading on April 2, 2007, after former parent Automatic Data Processing Inc. (ADP) distributed its shares to its own stockholders as a special dividend, or “spinoff.” Like many spinoffs, Broadridge struggled at first. That’s partly because many ADP shareholders quickly sold their new shares. As well, institutional investors often ignore companies with smaller market caps (or the total value of shares outstanding). Broadridge later went into a deep slump over fears of big losses at its securities-clearing division during the 2008 credit crisis. However, as we’ve often pointed out, most spinoffs go on to produce above-average results over a period of years. Broadridge has rebounded strongly, partly because it decided to focus on helping companies communicate with their shareholders, which is less risky than securities clearing. Plus, it is using its improving earnings to buy other related firms and assets that will pay off for years to come....
Our stock recommendations seem to attract way more than an average number of takeover bids. We think this is because we zero in on a company’s earnings potential, rather than basing decisions on predictions for next year’s earnings. Corporate buyers and big investors usually see things the same way. Many investors tell us that until they began following our advice, they never had the pleasure of watching a stock they own jump 25% in a few days, due to takeover news. Though we’re used to takeovers, December was a record-setter. Three of our long-term buys jumped on takeover news: DEL MONTE FOODS CO. $19 (New York symbol DLM) has accepted a $19.00-a-share takeover offer from a private investor group. It has till January 8 to find a better offer. Otherwise, the deal should close in March 2011. Del Monte is a hold....