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
DUNDEE REIT $15.56 (Toronto symbol D.UN; SI Rating: Speculative) (416-365-3535; www.dundeereit.com; Shares outstanding: 17.3 million; Market cap: $269 million) owns and operates seven million square feet of office, industrial and retail space, including 43 office buildings and 36 industrial properties. Western Canada represents 85% of its square footage. GE Real Estate owns a 15% voting interest in Dundee REIT, and Dundee Corp. owns 22%. The best measure of operating performance for a real-estate company is cash flow, and Dundee’s cash flow per share rose 18%, to $0.59 from $0.50, in the three months ended March 31, 2009. Its revenue rose 13.5%, to $50 million from $44 million a year earlier. The improved results mostly came from higher rents. Dundee raised its rents an average of 10.1% in the latest quarter, to $15.55 per square foot. As well, many of the leases on Dundee’s properties are coming up for renewal, and as these mature, the company is profiting from higher leasing rates. Dundee’s occupancy rate is a high 96.5%....
DOREL INDUSTRIES $25.30 (Toronto symbol DII.B; SI Rating: Extra Risk) (514-731-0000; www.dorel.com;Shares outstanding: 33.4 million; Market cap: $844.4 million) has paid $5.2 million U.S. for the assets of Iron Horse Bicycles. Iron Horse sells its bicycles throughout North America and around the world. The company is best known for its downhill and trail bikes. The acquisition will add to Dorel’s own bicycle lineup, which includes the Cannondale, Schwinn and Mongoose brands. Dorel makes these through its Pacific Cycle subsidiary. Iron Horse’s sales were just $25 million U.S. in 2008, but Dorel plans to use its marketing expertise to quickly boost these....
AASTRA TECHNOLOGIES $28.47 (Toronto symbol AAH; SI Rating: Speculative) (905-760-4200; www.aastra.com; Shares outstanding: 13.7 million; Market cap: $389.3 million) develops and markets products and systems for accessing communication networks, including the Internet. In the three months ended March 31, 2009, revenue rose 56.6%, to $219.3 million from $140 million a year earlier. Cash flow per share more than doubled, to $1.46 from $0.68. Earnings jumped to $14.1 million, or $1.02 a share, from $5.3 million, or $0.33. In April 2008, Aastra bought the business-communications division of Swedish telecom giant Ericsson. It has now fully integrated this new division. This, in turn, has eliminated overlapping expenses and pushed up Aastra’s profits and cash flow....
NISSAN MOTOR $12.87 (Nasdaq symbol NSANY; SI Rating: Above Average) (310-771-3111; www.nissanmotors.com; Shares outstanding: 2.3 billion; Market cap: $29.1 billion) has been granted $1.6 billion in low-interest loans by the U.S. Department of Energy. Nissan plans to use the funds to equip its plant in Tennessee to make more than 100,000 all-electric cars a year, plus 200,000 lithium-ion batteries to power them, by 2013. The company will unveil its electric car this summer, and plans to begin making the five-passenger sedans in Japan in the fall of 2010. Nissan plans to start with 50,000 vehicles a year, and will import them into the U.S. until the expansion of the Tennessee plant is finished. The company expects to sell its electric car at a price that is comparable with that of a gasoline-powered car....
IAMGOLD $12 (Toronto symbol IMG; SI Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 367.2 million; Market cap: $4.4 billion) has interests in seven operating gold mines: 100% of the Mupane mine in Botswana; 38% of the Sadiola mine and 40% of the Yatela mine, both located in Mali; 18.9% interests in both the Tarkwa and Damang mines in Ghana; 100% of the Doyon mine in Quebec; and 100% of the Rosebel mine in Suriname, South America. IAMGold also owns the Niobec niobium mine in Quebec, and has a 1% royalty interest in the Diavik diamond mine in the Northwest Territories. In the three months ended March 31, 2009, IAMGold reported a 15% fall in cash flow per share, to $0.17 from $0.20. (All figures except share price and market cap in U.S. dollars.) Revenue fell 10.3%, to $188.6 million from $208.2 million....
INTERNATIONAL ROAD DYNAMICS $0.95 (Toronto symbol IRD; SI Rating: Speculative) (306-653-6600; www.ird.ca; Shares outstanding: 14 million; Market cap: $13.3 million) reports that its revenue jumped 26.1% in the quarter ended May 31, 2009, to $11.6 million from $9.2 million a year earlier. Sales were higher in all geographic regions, and across most of its product lines. Earnings were $0.01 a share in the latest quarter, compared to a loss of $0.03. Cash flow was $0.07 a share. International Road makes products and systems that manage highway traffic, as well as weigh-station technology for trucks....
MAJOR DRILLING $21.93 (Toronto symbol MDI; SI Rating: Speculative) (www.majordrilling.com; 1-866-264-3986; Shares outstanding: 23.7 million; Market cap: $520.1 million) is a large contract-drilling company that mainly serves the mining industry. In the three months ended April 30, 2009, Major Drilling’s revenue fell 60.9%, to $66.4 million from $170 million. It lost $4.6 million, or $0.19 a share, compared to a profit of $25.5 million, or $1.07 a share, a year earlier. The latest quarter’s earnings included a $2.1-million restructuring charge. Cash flow was positive, at $2.8 million, or $0.12 a share. In January, many of Major’s customers delayed or cancelled their exploration plans because of the recession and lower gold and base-metal prices. Drilling remained slow through February, March and April....
TIM HORTONS $28.93 (Toronto symbol THI; SI Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 181 million; Market cap: $5.2 billion) operates 3,457 coffee-and-donut shops, including 2,930 in Canada and 527 in the U.S., where the company is incorporated, despite the fact that the U.S. accounts for less than 10% of its revenue. Tim Hortons was a wholly owned subsidiary of U.S.-based Wendy’s International Inc. (now part of Wendy’s/Arby’s Group Inc., New York symbol WEN) until March 2006. Tim Hortons now plans to become a Canadian company in order to take advantage of lower Canadian income-tax rates. Corporate tax rates in the U.S. are now over 30%, and Canada’s combined federal and provincial rate will be around 25% in two years....
ADOBE SYSTEMS INC. $31.34 (Nasdaq symbol ADBE; SI Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 525 million; Market cap: $16.5 billion) recently shut down its North American operations for a week as part of a previously announced cost-cutting plan. The closure was the second of three one-week shutdowns that Adobe plans to implement this year. These are in addition to the company’s usual shutdown for the week between Christmas and New Year’s Day. Employees are being asked to use their paid vacation during the shutdowns. Adobe hasn’t said how much it expects to save during the shutdowns. But the company’s revenue fell 20.5% in the three months ended May 29, 2009, to $704.7 million from $886.9 million. Newspapers and magazines, many of which are Adobe’s main clients, are selling fewer ads because of the recession. This has hurt demand for Abode’s Creative Suite 4 graphic-design software, which accounts for about 60% of the company’s sales. The shutdowns should help lift Adobe’s profits, despite the lower sales....
ALIMENTATION COUCHE-TARD $16.79 (Toronto symbol ATD.B: SI Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 193.1 million; Market cap: $3.2 billion) is up over 25% since reporting sharply higher earnings in the latest quarter. In the three months ended April 26, 2009, Couche-Tard’s earnings rose 145.2%, to $38 million, or $0.20 a share, from $15.5 million, or $0.08 a share, a year earlier. (All figures except share price in U.S. dollars.) The higher earnings were mainly the result of acquisitions, higher profit margins on gasoline, a rise in same-store merchandise revenue, lower operating expenses and growing same-store gasoline volume in Canada....