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
EXPEDIA GROUP INC., $271.56, is a buy. The stock (Nasdaq symbol EXPE; TSINetwork Rating: Average) (www.expediagroup.com; Shares outstanding: 142.6 million; Market cap: $33.3 billion; Dividend yield: 0.6%) continues to trade near all-time highs for our subscribers.
TOROMONT INDUSTRIES LTD. $171 (www.toromont.com) is a buy. The company distributes bulldozers, backhoe loaders and drills, mainly in eastern Canada and the U.S. It also makes refrigeration systems. The stock has gained 50% in the past year as new infrastructure projects in Ontario and Quebec are spurring demand for Toromont’s heavy equipment. The stock trades at 25.0 times the projected 2026 earnings of $6.84 a share; that’s an acceptable p/e in light of the company’s strong reputation and high market share. Toromont is a buy.
THOMSON REUTERS CORP. $177 is a buy for long-term gains. The company (Toronto symbol TRI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 450.5 million; Market cap: $79.7 billion; Price-to-sales ratio: 7.7; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.thomsonreuters.com) sells specialized information (mainly through electronic channels) to professionals in the legal, and tax and accounting fields. It also owns the Reuters news service.
CGI INC. $131 is a buy for aggressive investors. The company (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 217.2 million; Market cap: $28.5 billion; Price-to-sales ratio: 1.9; Dividend yield: 0.5%; TSINetwork Rating: Average; www.cgi.com) is Canada’s largest provider of computer outsourcing services. It helps its clients automate certain routine functions like accounting and buying supplies. That makes companies more efficient and lets them focus on their main businesses.
LOBLAW COMPANIES LTD. $63 is a buy. The company (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.2 billion; Market cap: $75.6 billion; Price-to-sales ratio: 1.239; Dividend yield: 0.9%; TSINetwork Rating: Above Average; www.loblaw.ca) operates 1,160 supermarkets under several banners, including Loblaws, Zehrs, Provigo, Real Canadian Superstore and No Frills. It also owns the Shoppers Drug Mart chain, which has 1,363 drugstores across Canada.
MAPLE LEAF FOODS INC. $26 is still a hold. The company (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 124.9 million; Market cap: $3.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 3.2%; TSINetwork Rating: Average; www.mapleleaffoods.com) sells fresh and prepared meats under the Maple Leaf and Schneider labels. It also makes plant-based protein products under the Lightlife and Field Roast brands.
CPKC continues to do a good job controlling its costs. That will help spur its profits despite the threat of tariffs on their freight volumes.
CANADIAN PACIFIC KANSAS CITY, $97.67, is a buy. The company (Toronto symbol CP; shares o/s: 900.8 million; Market cap: $88.0 billion; Rating: Above Average; Divd. yield: 0.9%) ships freight over a 32,190-kilometre rail network. That line runs mainly between Montreal and Vancouver, with links to hubs in the U.S. Midwest and Northeast. With the addition of Kansas City Southern, the new company connects with important hubs and ports on the U.S. Gulf Coast and in Mexico.
CANADIAN PACIFIC KANSAS CITY, $97.67, is a buy. The company (Toronto symbol CP; shares o/s: 900.8 million; Market cap: $88.0 billion; Rating: Above Average; Divd. yield: 0.9%) ships freight over a 32,190-kilometre rail network. That line runs mainly between Montreal and Vancouver, with links to hubs in the U.S. Midwest and Northeast. With the addition of Kansas City Southern, the new company connects with important hubs and ports on the U.S. Gulf Coast and in Mexico.
Understanding our recommendations: Power Buy—These stocks are our top choices for new buying now. We feel each currently offers the best combination of fundamentals (earnings, sales, cash flow and so on) plus external factors (industry trends and the current share price) to give it a chance of above-average gains. Buy—high-quality stocks with strong growth prospects. However, they are likely to grow at a slower rate than our Power Buys. Sell—these are stocks that no longer inspire our confidence. As Power Growth Investor focuses on maximizing profits for aggressive investors, we prefer to sell poorly performing stocks instead of holding them and waiting for a rebound.
You should remain wary of stocks that attract broker/media attention because of high-profile products or services, and their business models. Here’s a closer look at one stock with risks that prospective investors should take into consideration:
FERMI INC., $9.06, (Nasdaq symbol FRMI; TSINetwork Rating: Extra Risk) (www.fermiamerica.com; Shares outstanding: 592.8 million; Market cap: $6.0 billion; No dividends paid) is a real estate investment trust that plans to develop electrical generating facilities in the Texas Panhandle region. These plants are aimed at supplying power to artificial intelligence (AI) datacentres that the company is also developing.
FERMI INC., $9.06, (Nasdaq symbol FRMI; TSINetwork Rating: Extra Risk) (www.fermiamerica.com; Shares outstanding: 592.8 million; Market cap: $6.0 billion; No dividends paid) is a real estate investment trust that plans to develop electrical generating facilities in the Texas Panhandle region. These plants are aimed at supplying power to artificial intelligence (AI) datacentres that the company is also developing.
PagerDuty and Twilio were well positioned to gain during the pandemic, but since early 2021 they have dropped along with many other tech/platform stocks. Still, we think both have room to rebound as they continue to experience strong and growing demand. Both are buys.
PAGERDUTY INC., $12.81, is a buy. The company (New York symbol PD; TSINetwork Rating: Extra Risk) (pagerduty.com; Shares o/s: 91.8 million; Market cap: $1.2 billion; No divd.) operates a platform that collects real-time data from software systems and devices and then notifies its IT customers of incidents that could harm operations.
PAGERDUTY INC., $12.81, is a buy. The company (New York symbol PD; TSINetwork Rating: Extra Risk) (pagerduty.com; Shares o/s: 91.8 million; Market cap: $1.2 billion; No divd.) operates a platform that collects real-time data from software systems and devices and then notifies its IT customers of incidents that could harm operations.