How Successful Investors Get RICH

Learn everything you need to know in 'The Canadian Guide on How to Invest in Stocks Successfully' for FREE from The Successful Investor.

How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger.

 I consent to receiving information from The Successful Investor via email. I understand I can unsubscribe from these updates at any time.

Topic: How To Invest

Canadian investing: Strong dollar weighs on Transcontinental’s international earnings

Transcontinental Inc., Toronto symbol TCL.A, is the largest commercial printer in Canada, and the fourth largest in North America. It also publishes newspapers and magazines, and has over 1,000 web sites.

In the three months ended July 31, 2011, Transcontinental’s revenue rose 2.3%, to $492.6 million from $481.3 million a year earlier. The company has won a number of new printing contracts, including an expanded deal to print The Globe and Mail.

The company recently swapped its printing operations in Mexico for six printing plants in Canada. If you exclude the contributions from the Mexican plants and other unusual items, the company earned $32.8 million or $0.40 a share. That fell short of the consensus estimate of $0.45 a share. The latest earnings are also down 1.8% from $33.4 million, or $0.41 a share, a year earlier. The strong Canadian dollar hurt the contribution from Transcontinental’s international operations; that was the main reason for the lower earnings.

Canadian investing: Transcontinental counts on long-term contracts

The stock trades at a low p/e ratio to Transcontinental’s estimated earnings for 2011. That low p/e ratio mainly reflects concern in Canadian investing ranks that a slowing economy will hurt the company’s advertising revenue.

However, 40% of Transcontinental’s revenue comes from its less-cyclical clients, such as supermarket chains. As well, it gets more than half of its printing revenue from customers under long-term contracts.

Transcontinental is one of the stocks we covered in our report on Canadian investing in The Successful Investor Hotline for September 9, 2011, which you can view immediately when you take a 1-month free trial to The Successful Investor. Click here to learn how you can start profiting from The Successful Investor right away.

(Note: If you are a current Successful Investor subscriber, please click here to view Pat’s recommendation. Be sure to log in first.)

Comments

Tell Us What YOU Think

You must be logged in to post a comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.