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
BIRCHCLIFF ENERGY $12.59 (Toronto symbol BIR; SI Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Units outstanding:112.2 million; Market cap: $1.4 billion) reports that cash flow per share rose 33.3% in the three months ended March 31, 2008, to $0.28 from $0.21 a year earlier. Revenues rose 115%, to $47.5 million from $22.1 million. In the latest quarter, new production and rising oil and natural gas prices boosted both earnings and cash flow. Total daily production rose 62.5%, to 9,470 barrels of oil equivalent from 5,829 barrels. Average daily production from Birchcliff’s Worsley light oil wells more than tripled, to 2,827 barrels from 742 barrels. Average daily production at its Montney/Doig natural gas assets at Pouce Coupe rose 28.4%, to 37.8 million cubic feet from 29.4 million. Both Worsley and Montney/Doig are located in Alberta’s Peace River Arch region....
CELTIC MINERALS $0.52 (Toronto symbol CME; SI Rating: Start-up) (403-261-2890; www.celticminerals.com; Shares outstanding: 67.4 million; Market cap: $35.0 million) has as its main asset a 50% interest in the 113 square kilometre West Voisey’s Bay project, located on the southwestern edge of Vale Inco’s Voisey’s Bay nickel mine and property in Labrador. In addition, Celtic holds a 100% interest in 77 square kilometres which adjoin the West Voisey’s Bay project. Celtic also continues to add to its early-stage nickel prospects elsewhere in Labrador. This includes the April, 2007 staking of its 100%-owned Kingurutik property, 85 kilometers northeast of the Voisey’s Bay mine. Celtic’s shares jumped to as high as $2.48 a share in October, 2007 after an analysis of surface samples revealed high nickel/copper mineralization at Kingurutik. Celtic also has other nickel prospects in Quebec and Newfoundland....
DEVON ENERGY CORP. $123.05 (New York symbol DVN; SI Rating: Speculative) (405-235-3611; www.devonenergy.com; Shares outstanding: 446.2 million; Market cap: $54.9 billion) is one of the largest U.S.-based independent oil and gas explorers and producers. Devon’s properties are located mainly in the United States and Canada and, to a lesser degree, various regions outside North America. The company has sold its operations in Egypt, and is nearing completion of the sale of its assets in West Africa for $3 billion. In the three months ended March 31, 2008, Devon’s revenues rose 20.3%, to $3 billion from $2.5...
Today many investors assume the price of oil is bound to keep rising indefinitely. Mostly they base that view on the potential for increased car ownership in India, China and other newly industrializing countries. To top it off, they assume that all the world’s great oil finds have already been discovered. It’s hard to disagree with those assumptions or that line of reasoning. However, the resources sector and oil in particular have always been highly cyclical and volatile. Eventually, world oil demand growth will stall or go into reverse, even while third-world car ownership keeps rising. This might happen because oil consumers decide prices have gone up too high, so they should use up some of their inventory.This could spur hedge funds and speculators to dump their oil holdings. (Note that the U.S. has just decided to quit buying for its Strategic Petroleum Reserve, which now holds oil equal to 58 days of U.S. oil consumption)....
REITMANS (CANADA) LTD. $17.85 (Toronto symbol RET.A; SI Rating: Extra Risk) (514-384-1140; www.reitmans.com; Shares outstanding: 70.8 million; Market cap: $1.3 billion) sells women’s apparel and accessories in stores across Canada. The company now has 958 stores in operation, consisting of 369 Reitmans, 162 Smart Set, 162 Penningtons, 53 RW & Co., 125 Addition Elle, 73 Thyme Maternity and 14 Cassis stores. Reitmans continues to aggressively open and close stores depending on local market conditions. In 2007, the company opened 65 stores and closed 27 stores. In the three months ended February 2, 2008, Reitmans’ revenues fell 4.4%, to $269.6 million from $282.1 million. Same store sales fell 2.5%. Earnings excluding one-time items rose 21.6%, to $28.5 million or $0.40 a share from $23.4 million or $0.33 a share....
GABRIEL RESOURCES, $2.99, symbol GBU on Toronto, has nearly doubled for us since late April. Gabriel now has three major shareholders. New York City-based resource investor Thomas Kaplan began buying Gabriel shares in December, 2007 through his Electrum Strategic Holdings LLC. He is now Gabriel’s third-largest shareholder with a 14.4% stake. Newmont Mining, symbol NEM on New York, is Gabriel’s largest shareholder at 18.4%, followed by New York City-based hedge fund, Paulson & Co. at 18%. Gabriel announced this week that it will add five new members to its existing eight- member board. Newmont will nominate two additional directors and Electrum will nominate three new directors....
ANHEUSER-BUSCH COMPANIES INC. $57.46, New York symbol BUD, rose 10% this week on speculation that Belgian-based InBev NV may launch a $65-a-share takeover offer. InBev is the world’s largest brewer, but has only a small presence in the United States. Buying Anheuser-Busch would instantly give InBev over half of the U.S. beer market. Anheuser-Busch has no controlling stockholder, so a hostile takeover could succeed. Even if InBev decides not to bid, we still like Anheuser-Busch’s long-term prospects. The stock is still a buy....
ENDEV ENERGY INC., $1.34, symbol ENE on Toronto, rose over 13% this week after receiving a buyout offer from Penn West Energy Trust, $33.81, symbol PWT.UN on Toronto. Endev shareholders will receive 0.041 of a Penn West unit for each Endev share held, which is equivalent to $1.39 per Endev share at the current price of Penn West shares. Penn West expects to issue 3.9 million trust units in the deal and assume $43.9 million of Endev debt, for a total value of about $170 million. Endev explores for and develops oil and natural gas in central Alberta. Production is weighted 22% toward crude oil and liquids and 78% natural gas. Endev’s primary production area at Majorville in southeastern Alberta is near existing Penn West operations....
MOODY’S CORP. $34.16, New York symbol MCO, fell over 20% this week due to accusations that it deliberately inflated the credit ratings of some complex debt securities. A media report alleges that after the company discovered a computer error in early 2007, it changed its rating methodology instead of downgrading these securities. Moody’s has denied the allegations. Rating agencies like Moody’s have come under fire in the past few months over the high ratings they assigned to securities backed by subprime mortgages and other risky loans. We have no reason to doubt Moody’s integrity. As well, the securities in question represent a tiny fraction of Moody’s business. However, this situation will likely spark further class-action lawsuits and greater regulation over the ratings industry....
BIRCHCLIFF ENERGY, $12.82, symbol BIR on Toronto, rose over 15% this week after it reported that cash flow per share rose 33.3% in the three months ended March 31, 2008, to $0.28 from $0.21 a year earlier. Revenues rose 13.1%, to $56.2 million from $26.4 million. Excluding one-time items, the company earned $7.1 million or $0.07 a share, compared to a loss of $1.4 million or $0.02 a share. In the latest quarter, new production and rising oil and natural gas prices boosted both earnings and cash flow. Total daily production rose 62.5%, to 9,470 barrels of oil equivalent from 5,829 barrels. Average daily production from Birchcliff’s Worsley light oil wells more than tripled, to 2,827 barrels from 742 barrels. Average daily production at its Montney/Doig natural gas assets at Pouce Coupe rose 28.4%, to 37.8 million cubic feet from 29.4 million. Both Worsley and Montney/Doig are located in Alberta’s Peace River Arch region....