Stock Pickers Digest Hotline – Friday, September 2, 2011

CAMECO CORP., $22.23, symbol CCO on Toronto, has launched a hostile takeover bid for Hathor Exploration (symbol HAT on Toronto). Cameco is offering $520 million, or $3.75 a share.

Hathor’s main exploration properties are on the east side of the Athabasca Basin. This region contains all of Canada’s producing uranium mines, and accounts for 23% of global production.

Right now, Hathor is exploring for uranium at its Midwest Northeast project, which is close to producing properties owned by Cameco and AREVA of France.

The Midwest Northeast property is Hathor’s most advanced project. The company is focusing its exploration on the Roughrider zone, where it has found significant uranium mineralization over the last couple of years. Roughrider could hold as much as 57.9 million pounds of uranium. It is also near Cameco’s Rabbit Lake mill.

Cameco holds cash of $1.2 billion, or $3.30 a share, so it can easily afford to make acquisitions like Hathor to enhance its long-term growth prospects. Hathor is trading at $4.13 a share, or 10.1% above Cameco’s offer. That means Cameco may have to raise its offer to gain the support of Hathor’s shareholders or fend off a rival bid.

Cameco is still a buy.

Cameco was recently covered in the April 2011 issue of The Successful Investor. Click here to access it.

Cameco was recently covered in The Successful Investor Hotline for June 3, 2011. Click here to access it.

THE CHURCHILL CORP., $15.00, symbol CUQ on Toronto, moved up 6.5% this week after its Stuart Olson Dominion Construction division won two contracts worth a total of $158 million.

The first contract is a $98-million deal for an office tower in B.C. The company expects to begin construction in March 2012, and should finish the building in April 2015.

The second contract, which is worth $60 million, is for the renovation of the Tache Hall Music Art and Theatre complex for the University of Manitoba. Churchill plans to start in October 2011, and complete the project by July 2014.

To put the contracts into perspective, Churchill’s total backlog stood at $1.7 billion on June 30, 2011.

Churchill Corp. is still a buy.

Churchill was recently covered in the August 2011 issue of Stock Pickers Digest. Click here to access it.

Churchill was recently covered in the Stock Pickers Digest Hotline for July 8, 2011. Click here to access it.

IAMGOLD CORP., $21.01, symbol IMG on Toronto, has sold its Mupane mine in Botswana to Galane Gold of Toronto. The company received $34.2 million U.S. for the mine, consisting of $12.5 million in cash, 21.9 million common shares of Galane Gold and a $3.8-million promissory note. IAMGold now owns 48.5% of Galane.

The company acquired the mine when it bought Gallery Gold in 2006. The mine is expected to run out of reserves by 2015. However IAMGold believes Galane will be able to find additional reserves in properties it holds next to the existing mine.

IAMGold now holds over $1.1 billion U.S. in cash and gold bullion. That gives it lots of options to spur its share price: it could raise exploration spending; make an acquisition; pay dividends; or buy back shares.

IAMGold is still a buy.

IAMGold was recently covered in the June 2011 issue of Stock Pickers Digest. Click here to access it.

IAMGold was recently covered in the Stock Pickers Digest Hotline for August 26, 2011. Click here to access it.

ALIMENTATION COUCHE-TARD, $28.65, symbol ATD.B on Toronto, is the largest convenience-store operator in Canada, with over 2,000 outlets. It also has nearly 3,700 U.S. stores. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand.

In the three months ended July 17, 2011, Couche-Tard’s earnings rose 9.9% to $139.5 million, or $0.76 a share. A year earlier, it earned $126.9 million, or $0.68 a share (all figures except share prices in U.S. dollars).

Sales rose 23.9% to $5.2 billion from $4.2 billion. The gains came from higher fuel prices, the stronger Canadian dollar and higher merchandise sales. The company gets 30.2% of its sales by selling merchandise.

Couche-Tard continues to introduce new products with higher profit margins, including new drinks and improved fresh and take-out food.

The stock trades at a reasonable 14.2 times the $2.02 a share that the company should earn in 2011.

Alimentation Couche-Tard is still a buy.

Alimentation Couche-Tard was recently covered in the August 2011 issue of Stock Pickers Digest. Click here to access it.

Alimentation Couche-Tard was recently covered in the Stock Pickers Digest Hotline for August 19, 2011. Click here to access it.

NISSAN MOTOR CO., $17.98, symbol NSANY on Nasdaq, reported stronger U.S. sales in August.

During the month, the company sold 91,541 cars and trucks in the U.S. That’s up 19.2% from 76,827 vehicles in August 2010. The Nissan division’s sales rose 22.4%. That more than offset a 4.3% decline in Infiniti sales.

Sales were helped by the launch of the all-new Versa Sedan, which lifted overall sales of the Versa subcompact by 14.9%, to a total of 8,566 vehicles. Nissan Altima sales continued to be strong: the company sold 23,016 of these cars in August, an increase of 24.5% over the prior year. As well, the company saw record sales of its Rogue crossover in August. Rogue sales rose 13.2%, to 11,467 vehicles.

In addition, the company sold 1,362 of its all-electric Nissan LEAF vehicles in August. It has now sold 6,187 of these cars since it launched the LEAF in December 2010.

Like all automakers, Nissan needs a renewed global economic recovery to continue to show higher sales. Meanwhile, its outlook remains positive.

Nissan Motor is still a buy.

Nissan was recently covered in the August 2011 issue of Stock Pickers Digest. Click here to access it.

Nissan was recently covered in the Stock Pickers Digest Hotline for July 29, 2011. Click here to access it.

Our next Hotline will go out on Friday, September 9, 2011.