Investing for growth in a slow-growth U.S. market

Housing, infrastructure and technology stocks are among AGF manager's favourites.

Diana Cawfield 18 August, 2016 | 5:00PM

In selecting U.S. growth stocks in a slow-growth environment, Tony Genua focuses on rising revenues. "If we look at the last three years, it's been a challenging environment," says Genua, a vice-president and portfolio manager at AGF Investments Inc. "The U.S. dollar has been a bit of a headwind for many S&P 500 companies, so revenues in the last three years are only up about 1%. For the companies I invest in, on average, it's up 15%, so very healthy top-line growth."

Certainly the bottom line is also there in terms of earnings per share for companies with above-average top-line growth, adds Genua. Based in Toronto, he has specialized in AGF's U.S. growth portfolios, including the $1-billion AGF American Growth Class, since 2005. He will typically spend 80% of his time on bottom-up analysis and the remaining 20% on macroeconomic analysis and valuations within sectors.

"I continue to believe that the U.S. economy is in an extended cycle," says Genua, who has more than 30 years of investment experience. "Given the lack of significant imbalances, we see the current cycle having a few years left in it, and likely remaining in the mode of sub-par growth."

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating Inc2,442.37 USD1.72
Apple Inc317.94 USD-0.10
Facebook Inc A225.09 USD-0.16
Fortune Brands Home & Security Inc60.96 USD-0.28
Lowe's Companies Inc130.35 USD1.74
NVIDIA Corp355.02 USD4.58
Sony Corp ADR64.76 USD0.28
Tesla Inc835.00 USD3.62

About Author

Diana Cawfield

Diana Cawfield  Diana Cawfield is an award-winning writer who has been a regular Morningstar contributor since 2000. Her numerous publication credits include the Toronto StarAdvisor's Edge and Chatelaine, as well as the Canadian Securities Institute's online educational services.

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