Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

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

Growth Stocks

Fair Isaac dominates a niche market

Shares of Fair Isaac have risen 84.8% for our subscribers over the last year—and a whopping 9,413.5% since we first recommended the stock in our February 1999 issue at $13.60 a share (split adjusted)! That said, we think the shares have room to move much higher.

The company plays a key role for lenders making mortgage underwriting decisions....

2 min read

Pat McKeough

Growth Stocks

Acquisitions lift revenue

FIRSTSERVICE CORP. $221 is a buy for aggressive investors. The company (Toronto symbol FSV; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 44.6 million; Market cap: $9.9 billion; Price-to-sales ratio: 1.7; Dividend yield: 0.6%; TSINetwork Rating: Extra Risk; www.firstservice.com) has two main businesses: FirstService Brands (54% of revenue) offers a wide variety of property management services through several franchised businesses, including Paul Davis Restoration and CertaPro Painters; and FirstService Residential (46%) provides property management services such as collecting monthly condominium fees and maintenance services.

In 2023, FirstService spent $547.2 million on acquisitions of smaller firms (all amounts except share price and market cap in U.S....

1 min read

Pat McKeough

Growth Stocks

Two buys for your safety-conscious gains

CP Rail and Metro are leading competitors in their respective markets. You can expect that to lower your risk if the economy should weaken. We see both stocks as buys.

CANADIAN PACIFIC RAILWAY $108.19, is a buy. The company (Toronto symbol CP; shares o/s: 931.8 million; Market cap: $99.1 billion; Rating: Above Average; Dividend yield: 0.7%) ships freight over a 32,190-kilometre rail network....

2 min read

Pat McKeough

Growth Stocks

Updating our Aggressive stocks: Restaurant Brands, Molson Coors &, Idexx Laboratories

RESTAURANT BRANDS INTERNATIONAL INC. $76 (www.rbi.com) is a buy. The company is now buying Carrols Restaurant Group (Nasdaq symbol TAST), Burger King’s largest U.S....

1 min read

Pat McKeough

Growth Stocks

RTX’s long-term outlook remains bright

The shares of aerospace equipment maker RTX dropped to $69 in October 2023 after the company issued a recall of some defective jet engines. Despite that setback, the shares have rebounded on improving demand for RTX’s commercial and military products. Cost savings also let the company return more cash to its shareholders.
RTX CORP....

2 min read

Pat McKeough

Growth Stocks

Three more updates to protect your gains: Cedar Fair, Warner Bros. Discovery & McKesson

CEDAR FAIR L.P. $39 is still a hold. The partnership (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 51.0 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.1; Distribution yield: 3.1%; TSINetwork Rating: Average; www.cedarfair.com) has agreed to merge with rival amusement park operator Six Flags Entertainment Corp (New York symbol SIX).

The combined firm will take the Six Flags name and trade on the New York exchange under the “FUN” symbol....

2 min read

Pat McKeough

Growth Stocks

We still prefer the spinoff to its parent

The shares of industrial conglomerate General Electric have gained 55% since it decided to split into three separate firms in November 2021. The company now expects to complete the final spinoff in April 2024. While the breakup should ultimately benefit investors, the recent healthcare equipment spinoff is your better choice for new buying.

GENERAL ELECTRIC CO....

2 min read

Pat McKeough

Growth Stocks

Yum China targets new cities

YUM CHINA HOLDINGS INC. $37 is a buy for aggressive investors. The company (New York symbol YUMC; Consumer Sector; Shares outstanding: 416.9 million; Market cap: $15.4 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.4%; TSINetwork Rating: Average; www.yumchina.com) is China’s largest fast-food operator with over 14,000 outlets, mainly under the KFC and Pizza Hut banners.

The stock is down 13% since the start of 2024 due to China’s slowing economic growth....

1 min read

Pat McKeough

Growth Stocks

Microsoft brings AI to PCs

MICROSOFT CORP. $403 is a buy for aggressive investors. The company (Nasdaq symbol MSFT; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 7.4 billion; Market cap: $3.0 trillion; Price-to-sales ratio: 13.6; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.microsoft.com) invested $10 billion in OpenAI, the developer of the ChatGPT chatbot; it uses artificial intelligence (AI) software to interact with users in a conversational way and produce human-like written responses.

Microsoft is now incorporating that AI technology, as a new product (called Copilot), into its Office software products.

For example, Copilot can review a document and suggest ways to improve its readability....

1 min read

Pat McKeough

Growth Stocks

Keysight expands in Europe

KEYSIGHT TECHNOLOGIES INC. $155 is still a buy for aggressive investors. The company (New York symbol KEYS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 177.8 million; Market cap: $27.6 billion; Price-to-sales ratio: 5.1; No dividend paid; TSINetwork Rating: Average; www.keysight.com) makes an array of devices for testing electronic equipment.

The company has now acquired 98.2% of the shares in ESI Group....

1 min read

Pat McKeough

Testimonials

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Chuck Chakrapani, PhD
Investors Association of Canada
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Financial Post Columnist
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I appreciate the 25 years of above market returns I received by following your advice. at least 95% of my investment decisions were based on TSI recommendations.

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Subscriber since 1996. Inner Circle Member Since 2006
The newsletters I receive in Inner Circle Pro are fantastic! I have been following Pat’s advice for years and everything he has said has been amazing. His commentaries are brilliant, insightful, educational, rational and balanced. My returns are almost double the TSE and I have referred many of my friends who have switched over to your services.

Walter H.
Inner Circle Pro subscriber

Browse Premium Topics

Cannabis

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.