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
BREAKWATER RESOURCES $0.39 (Toronto symbol BWR; SI Rating: Speculative) (416-363-4798; www.breakwater.ca; Shares outstanding: 700.8 million; Market cap: $273.3 million; No dividends paid) is a Canadian-based mining company that mainly produces zinc. Breakwater has mines in Canada, Chile and Honduras. The company earned $0.01 a share in the three months ended December 31, 2009. A year earlier, it lost $0.12 a share. Breakwater’s cash flow was $0.016 a share in the latest quarter. Early last year, Breakwater raised $23 million in a share issue. That let the company pay off $16 million of debt that was due immediately. It now holds cash of $41.8 million, and has $8 million of long-term debt....
STORNOWAY DIAMOND CORP. $0.66 (Toronto symbol SWY; SI Rating: Start-up) (888-338-2200; www.stornowaydiamonds.com; Shares outstanding: 288.4 million; Market cap: $189.4 million; No dividends paid) has revealed an updated preliminary economic assessment of its 50%-owned Renard diamond project in Quebec. This new study predicts Renard could be nearly twice as profitable as expected. Stornoway now envisions a bigger mine at the site. This mine would produce almost 30 million carats of diamonds over its 25-year life. At today’s prices, these diamonds would be worth a total of about $4 billion. There is also potential to further expand the mine’s reserves through exploration. The company aims to complete a full feasibility study and make a production decision by the end of 2011. If it goes ahead, Renard could be Quebec’s first diamond mine....
BIRCHCLIFF ENERGY $9.00 (Toronto symbol BIR; SI Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Units outstanding: 124.1 million; Market cap: $1.1 billion: No dividends paid) trades at a high multiple to cash flow because investors expect its production to rise as much as 40% over the next year or so. That would substantially boost cash flow. Birchcliff develops, produces and explores for oil and natural gas in Alberta’s Peace River Arch area. In the three months ended December 31, 2009, the company’s cash flow per share was $0.17. That’s down 22.7% from $0.22 a year earlier. That’s because lower gas prices offset higher oil prices in the quarter. Lower gas prices also prompted the company to cut back on drilling. That lowered production by 8.8%, to 10,515 barrels per day from 11,524 barrels....
AMAZON.COM $146.43 (Nasdaq symbol AMZN; SI Rating: Extra Risk) (206-266-1000; www.amazon.com; Shares outstanding: 445.5 million; Market cap: $65.2 billion; No dividends paid) has received approval from the federal government to open a $20-million distribution centre in Canada. In 2002, the government let Amazon open a Canadian web site, www.amazon.ca, but would not let the company build a warehouse because of concerns about foreign ownership of Canadian cultural industries. Right now, Canadian orders are handled in the United States, and shipped into the country through a subsidiary of Canada Post. The new warehouse should help Amazon cut its costs. That should let it gain market share in Canada by lowering the prices of its books and merchandise....
DOREL INDUSTRIES $36.35 (Toronto symbol DII.B; SI Rating: Extra Risk) (514-731-0000; www.dorel.com;Shares outstanding: 32.9 million; Market cap: $1.2 billion; Dividend yield: 1.4%) makes a wide range of products, including bicycles, ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs (including Eddie Bauer and Disney Baby licensed products); home furnishings, including chairs, tables, bunk beds, futons and step stools; and recreational products. In the three months ended December 31, 2009, Dorel’s revenue rose 13.6%, to $545.3 million from $479.9 million a year earlier. (All figures except share price in U.S. dollars.) Revenue was up across all three of the company’s divisions: The recreational/leisure segment reported 11.3% higher revenue; the juvenile division’s revenue rose 13.1%; and home furnishings gained 18.4%....
DEVON ENERGY $67.59 (New York symbol DVN; SI Rating: Speculative) (405-235-3611; www.devonenergy.com; Shares outstanding: 446.8 million; Market cap: $30.2 billion; Dividend yield: 1.0%) has agreed to sell its shallow-water properties in the Gulf of Mexico to Apache Corp. for $1.05 billion. To put the purchase price in context, Devon earned $1.8 billion, or $4.03 a share, in 2009. Devon will now focus on its less risky onshore properties in North America. The company will also put some of the proceeds toward paying down its $5.8 billion of debt, which is already moderate at 19.2% of its market cap....
COMPUTER MODELLING GROUP $18.77 (Toronto symbol CMG; SI Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 17.7 million; Market cap: $332.2 million; Dividend yield: 3.8%) sells software to clients in the oil and gas industry. It also provides consulting services. Computer Modelling’s software helps companies use advanced oil-and-gas recovery techniques to raise output from their existing wells. It has over 360 customers in 50 countries. In the three months ended December 31, 2009, Computer Modelling’s revenue rose slightly, to $11.69 million from $11.66 million a year earlier. Earnings fell 18.4%, to $4 million, or $0.23 a share. A year earlier, it earned $4.9 million, or $0.28 a share. The rising Canadian dollar resulted in foreign-currency losses of $240,817 in the latest quarter. That hurt Computer Modelling’s earnings and cash flow. A year earlier, the company reported gains of $872,156....
MAJOR DRILLING $26.07 (Toronto symbol MDI; SI Rating: Speculative) (www.majordrilling.com; 1-866-264-3986; Shares outstanding: 23.7 million; Market cap: $619.1 million; Dividend yield: 1.4%) has bought SMD Services of Huntsville, Alabama, for $4 million. The purchase is small for Major Drilling, but it lets the company enter the environmental and geotechnical drilling businesses. Environmental drillers recover soil and groundwater samples to determine if they are contaminated. Geotechnical drillers investigate the type and stability of soil. Major Drilling plans to immediately invest $5 million to expand SMD’s operations....
ALIMENTATION COUCHE-TARD $18.47 (Toronto symbol ATD.B: SI Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 183.6 million; Market cap: $3.4 billion; Dividend yield: 0.9%) has launched a $1.9-billion hostile takeover bid for Casey’s General Stores (symbol CASY on Nasdaq). Casey’s owns 1,507 convenience stores in the U.S. Midwest. The stores offer a wide variety of food and non-food merchandise, as well as gas, under the names Casey’s General Store, HandiMart and Just Diesel. Casey’s has rejected Couche-Tard’s all-cash bid of $36 a share as inadequate. Casey’s is now trading at $39.32, which is 9.2% above Couche-Tard’s offer. That suggests investors expect a higher bid....
NISSAN MOTOR $17.25 (Nasdaq symbol NSANY; SI Rating: Above Average) (310-771-3111; www.nissan.ca; Shares outstanding: 2.3 billion; Market cap: $39.0 billion) has set a price for its LEAF electric vehicle, which will be the first electric car to be widely sold in the U.S. Nissan plans to ship the LEAF to selected U.S. dealers in December, and sell the car nationwide in 2011. The LEAF will carry a manufacturer’s suggested retail price of $32,780 U.S. When you include a $7,500 federal tax credit, the car’s price will fall to $25,280. The LEAF will also be eligible for further rebates in California and some other states. Nissan will offer a lease program starting at $349 a month, not including tax credits....