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.
Read More
Close
Growth Stocks Library Archives
AUTODESK INC. $33.46 (Nasdaq symbol ADSK; SI Rating: Average) (515-507-5000; www.autodesk.com; Shares outstanding: 229.3 million; Market cap: $7.7 billion) gets nearly 90% of its revenue from its AutoCAD software, which is the world’s top-selling computer-aided design program. About four million architects and engineers in over 100 countries use AutoCAD to design and test new buildings and products. Autodesk gets the remaining 10% of its revenue from programs that filmmakers use to create special effects. In its second quarter, which ended July 31, 2010, Autodesk earned $85 million, or $0.36 a share. That’s up 50.4% from $56.5 million, or $0.24 a share, a year earlier. These figures exclude several unusual items, including costs related to Autodesk’s restructuring plan. Under this plan, the company cut over 10% of its workforce and merged certain facilities. On that basis, the latest earnings beat the consensus estimate of $0.27 a share....
ADOBE SYSTEMS INC. $27.71 (Nasdaq symbol ADBE; SI Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 525.2 million; Market cap: $14.6 billion) earned $284 million, or $0.54 a share, in the three months ended September 3, 2010. That’s up 52.6% from $186.1 million, or $0.35 a share, a year earlier. Revenue rose 42.0%, to a record $990.3 million from $697.5 million The gains were largely due to strong sales of Adobe’s Creative Suite 5, which it launched in April 2010. Creative Suite 5, which accounts for about 55% of Adobe’s revenue, is a package of photo-editing and desktop-publishing programs. However, the software maker warned that the weaker economy could slow Creative Suite 5’s sales growth in the current quarter....
BELLATRIX EXPLORATION $3.87 (Toronto symbol BXE; SI Rating: Speculative) (403-266-8670; www.bellatrixexploration.com; Shares outstanding: 97.2 million; Market cap: $376.2 million; No dividends paid) produces oil and natural gas in Alberta, B.C. and Saskatchewan. Gas makes up about 73% of its output; the remaining 27% is oil. In the three months ended June 30, 2010, Bellatrix’s production fell 21.5%, to 7,671 barrels of oil equivalent per day (this measurement includes natural gas) from 9,767 barrels a year earlier. That’s mainly because Bellatrix sold properties that produced about 3,500 barrels per day in late 2009. Bellatrix’s cash flow per share fell 21.4% in the latest quarter, to $0.11 from $0.14. Higher oil and gas prices partly offset the lower production. Bellatrix’s total debt is $81.3 million, or a low 21.6% of its market cap....
WESTJET AIRLINES $11.71 (Toronto symbol WJA; SI Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 138.8 million; Market cap: $1.6 billion; No dividends paid) has signed a code-sharing agreement with Hong Kong’s Cathay Pacific Airlines. Code sharing lets airlines sell seats and move luggage under their own name onto another carrier’s flights. So, WestJet can now offer flights into overseas markets. The next step for WestJet is code sharing with a U.S. airline. The company had a deal with Southwest Airlines in 2008, but it fell through. However, the company is now reportedly in talks with American Airlines....
BMTC GROUP $23.75 (Toronto symbol GBT.A; SI Rating: Extra Risk) (514-648-5757; No web site; Shares outstanding: 50.9 million; Market cap: $1.2 billion; Dividend yield: 1.0%) is one of Quebec’s largest retailers of furniture, electronics and household appliances. It sells these products through its two affiliates: Brault & Martineau Inc. and Ameublements Tanguay. The company has 20 large stores in the Montreal, Quebec City, Repentigny, Laval, Saint-George, Sainte-Therese, Chicoutimi, Trois-Rivieres, Sherbrooke, Rimouski, Riviere-du-Loup and Gatineau areas. It also has six liquidation centres, six Sleep Gallery stores and two distribution and administration centres in Montreal and Quebec City. In the three months ended June 30, 2010, BMTC’s sales rose 1.4%, to $207.8 million from $205 million. Earnings per share were unchanged at $0.36....
ZARGON ENERGY TRUST $19.63 (Toronto symbol ZAR.UN; SI Rating: Speculative) (403-264-9992; www.zargon.ca; Units outstanding: 23.7 million; Market cap: $465.2 million; Dividend yield: 11.0%) has bought privately held Oakmont Energy for about $9.45 million. The purchase price consists of 336,000 Zargon units, plus Zargon will assume about $3.45 million of net debt (including adjustments and transaction costs). Oakmont produces about 280 barrels of oil equivalent per day (this measurement includes natural gas). This will only increase Zargon’s daily output by about 2.8%, bringing it to roughly 10,330 barrels per day. However, Oakmont holds about $7.6 million of unused tax losses that Zargon can use to offset its earnings when the federal government’s tax on income trusts comes into effect on January 1, 2011. Along with its producing properties, Oakmont also brings significant oil-development potential. Zargon is still a buy.
AMERIGO RESOURCES $0.88 (Toronto symbol ARG; SI Rating: Speculative) (604-681-2802; www.amerigoresources.com; Shares outstanding: 170.9 million; Market cap: $150.4 million; No dividends paid) has moved up 52% since June on higher copper prices. Copper is up 38% during that period, to a two-year high of $3.81 U.S. a pound. Rising demand from China is the main reason for the price rise. Amerigo processes copper and molybdenum from the waste rock from Chile’s El Teniente, the world’s largest copper mine. The company gets 94% of its revenue by processing copper. The remaining 6% comes from molybdenum. In the three months ended June 30, 2010, Amerigo’s revenue was $32.4 million, up 79.5% from $18.1 million a year earlier. (All figures except share price and market cap in U.S. dollars.) The company earned $2 million, or $0.01 a share, compared to a loss of $2.3 million, or $0.02 a share. Cash flow was $4.7 million, or $0.03 a share, in the latest quarter....
GABRIEL RESOURCES $5.84 (Toronto symbol GBU; SI Rating: Speculative) (416-955-9200; www.gabrielresources.com; Shares outstanding: 342.6 million; Market cap: $2.0 billion; No dividends paid) jumped 30% in September after a committee of members of several Romanian government ministries confirmed that the environmental-permitting process for Gabriel’s Rosia Montana gold project will continue. The environmental-impact assessment will likely take three to six months, and will be overseen by the Romanian Ministry of Environment and Forestry. The mine still faces further environmental and political opposition. However, the European Union has stated that the project complies with its environmental regulations. As well, Romania’s current ruling coalition appears to be softening its objections to a mine....
ALIMENTATION COUCHE-TARD $23.22 (Toronto symbol ATD.B: SI Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 183.6 million; Market cap: $4.3 billion; Dividend yield: 0.7%) has dropped its $2-billion U.S. hostile takeover bid for Casey’s General Stores (symbol CASY on Nasdaq). Couche-Tard allowed its tender offer for all of Casey’s shares to expire at 5:00 p.m. on September 30. Couche-Tard, which was offering $38.50 U.S. a share, decided not to compete with convenience-store operator 7-Eleven’s offer of $40 a share, or $2.1 billion. Casey’s now trades at $42.24, which suggests that investors expect a still higher offer, even though Couche-Tard has dropped out of the bidding. Even without the takeover, we still like Couche-Tard’s growth prospects. Meanwhile, the company has enhanced its reputation as a disciplined bidder that does not overpay for acquisitions....
BAFFINLAND IRON MINES $0.99 (Toronto symbol BIM; SI Rating: Start-up) (416-364-8820; www.baffinland.com; Shares outstanding: 342.9 million; Market cap: $339.5 million; No dividends paid) is the subject of a hostile, $274.3-million takeover offer from Nunavut Iron Ore Acquisition Inc., which is wholly owned by privately held Iron Ore Holdings, LP. Nunavut is offering $0.80 in cash for each share of Baffinland. The company currently owns about 6% of Baffinland. Other shareholders who hold a combined 9.3% stake in Baffinland have also agreed to tender their shares to the offer. Baffinland is now trading at $0.99, or 23.8% above Nunavut’s bid. This indicates that investors expect a much higher bid from Nunavut or another buyer....