Growing Your Portfolio with Low Yield High Growth Stocks

Just a short and random post on some growth stocks I own and others you may want to consider for your portfolio. I'm always keeping my ears open and eyes on the volume and charts looking for bargain growth stocks with a history.

What companies products are you using, what are your kids using? Not just on a day to day basis but also when you leave the house or go on vacation.

This is a good place to look for ways to grow your money and cash in on products and services you and your family are using.

The internet, data plans, credit on plastic are just some examples. It still amazes me that people line up for movie, theatre, concert or museum tickets when you can buy these online. I mean what a waste of your time lining up is.

We just booked a flight with a rental car online to go out West to visit our grandchildren. Everyone who is moderately tech savy books online using some sort of search like Trivago, Expedia, Hotels.com, Tripadvisor, Booking.com and Cheap-O-Air. Well, we do and I'm retired so age is no excuse. I just love the ease and speed of making these reservations in the modern world of the internet.

I use Google Maps like every week so why don't I own Google the stock? Is it going away anytime soon? Why don't I own Apple? I own an iphone so why don't I support my purchase and buy the stock? I have no clue. Slow to react and scared to commit is all I can come up with.

I do own Bell, Telus and Shaw to grab some of the data companies that are not going away and only raising prices as we use more data. It is predicted that each person will use 1G of data a day in the not to distant future. My wife and I share 3G a month. This is a space you have to be in to grow your money in my opinion. Just ignore all the talk of cable cord cutting. It's not the future of these companies. I may swap my Shaw for Rogers shares going forward. Shaw is too small to build the infrastructure the future will demand.

I love tech stocks and own OTEX and CSU in the space. All Canadian and continue to grow by acquisition and leaders in the cloud space and also finding efficiencies in data management and software solutions.

I keep a watchlist of growth stocks I would like to buy with new money and when the time is right. What makes a good growth stock that will help you grow money in your portfolio? Understand what you are buying would be first and foremost. 

Next I look for a company that is growing it's earnings, revenue and sales. Growing and moving up from the previous year. I don't bother with quarter to quarter short term results. I focus on year over year growth. I also want to see a return on equity 5 year average of at least 20%. This also tells me the company is making good capital allocation decisions with shareholder's money.

If the company stops growing and is making poor decisions then dump it.

Based on the above mertics a few stocks in Canada jump out when you screen them for quality. They are;

Constellation Software (CSU) - develops, installs and customizes software

Tucows (TC)- Network Access and Domain Services

Spinmaster (TOY) - creates, designs, manufactures children's toys and entertainment products

Dollarama (DOL) - operates a chain of 1,170 dollar stores

My Other Growth Picks

Just some other random stocks that I like and would consider owning when they pullback or we get the all expected correction that most are calling for. Their ROE is slightly off the 20% 5 year average but very close. They would be;

MTY Food Group (MTY)

CGI Group (GIB.A)

Waste Connections (WCN)

TFI International (TFII)

CCL Industries (CCL.B)

Ritchie Bros. (RBA)

Park Lawn Corporation (PLC)

Descartes Systems (DSG)

Stocks I own and believe they should be in every portfolio include CNR and TRP. A railroad and a pipeline. Canada would shut down without them and right now I think these are the 2 you should own.

Garbage collection, trucking, funeral homes/crematoriums, auction houses, software developers and food. Are these growth industries? You decide.

In a recent Manpower survey, drivers was the third most listed job vacancy. Something to think about as our world loves to order online and then needs someone to deliver the goods. Apparently people are not as broke as they admit but they are more indebted and love charging on plastic.

Before I commit to buying a stock I always consult the one year chart and see where it is compared to it's 52 week high. I look for any entry point off of that high. If it has run away and going straight up, I look for other opportunites.

This is a totally different strategy than when I am adding dividend growth stocks to our retirement accounts.

Dividends and Growth

Back when I used to hand my money over to a mutual fund salesman, they always used to ask what you wanted to invest in. It always came back to a 50/50 split of growth and income. In the 90's this is how they did it.

What about now? Well it depends on age. On the income side of the equation, there are some big stable companies with some great sales, revenue and ROE stats + a nice yield that are worth buying and holding as investments. They are;

Bank of Nova Scotia (BNS) 4.3%

Metro (MRU) 1.7%

National Bank (NA) 3.8%

Saputo (SAP) 1.7%

Great West Life (GWO) 4.7%

Royal Bank (RY) 3.8%

Telus (T) 4.4%

Canadian Tire (CTC.A) 2.1%

Banks, Food, Telecoms and Canadian Tire. Not a bad selection of companies that continue to provide growth and income to your PF.

This is how I try and make purchases of companies when I have some new money in my accounts.

I also believe it is a myth that you can only make money on either growth or income stocks by buying small companies. It is simply not true and entails more risk.

I don't own any Weed, Gold or Energy stocks. Hot right now and having an amazing run but as a retiree I don't gamble with this money.

I NEVER USE MY RETIREMENT MONEY TO TRADE IN AND OUT OF 

STOCKS!

Looking for Saving Ideas so You Can Invest? 

If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.

If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews based on a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

What growth stocks are on your BUY list?

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