Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

Leon’s Furniture Ltd., symbol LNF on Toronto, has built its chain of over 69 furniture stores in Canada on its four main strengths: a huge selection of furniture, appliances and electronics; a lowest-price guarantee; strong after-sales service; and aggressive TV, radio and print advertising. We analyze Leon’s in Stock Pickers Digest, our newsletter that recommends stocks that may be appropriate for your aggressive portfolio. In the three months ended March 31, 2011, Leon’s sales fell 6.0 %, to $191.6 million from $203.8 million a year earlier. Weaker consumer spending and a drop in new-housing starts held back sales. The aggressive portfolio stock’s earnings fell 14.0%, to $9.8 million, or $0.14 a share, from $11.4 million, or $0.16 a share. The slower sales were the main reason for the earnings decline. The company also spent more on advertising....
U.S. restaurants are always looking for ways to give themselves an edge in their intensely competitive industry. Some, like Yum! Brands (a stock we analyze in our Wall Street Stock Forecaster newsletter), are focusing on expanding in fast-growing overseas markets, like India and China. (Yum, whose restaurant chains include KFC, Pizza Hut and Taco Bell, was the first fast-food company to enter China, in 1987). Other U.S. restaurants have been looking to attract more diners by launching innovative new menu items, renovating restaurants, and improving their service....
Transcontinental Inc., Toronto symbol TCL.A, is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines. Transcontinental is one of the income investing stocks we analyze in our flagship newsletter, The Successful Investor. Transcontinental also has over 300 web sites. These web sites will become more important to the company’s growth in the next few years, as advertisers spend more on the Internet than on print products....
H.J. Heinz Co., New York symbol HNZ, makes a wide variety of processed foods, including condiments, sauces, soups, baked beans, pastas and infant food. Its flagship product is Heinz Ketchup. We analyze Heinz in Wall Street Stock Forecaster, our newsletter for U.S.A. stock market investing. In its latest fiscal year, which ended April 27, 2011, Heinz earned $989.5 million. That’s up 8.2% from $914.5 million in the prior year....
If you’ve been following our TSI Network Daily Updates, or subscribe to one of our paid newsletters or investment services, you’re likely familiar with our three-part TSI Network investing program.

3 easy steps to lower-risk profits in Canadian stocks

One key part of our program is to spread your money out across the five main sectors of the economy: Manufacturing & Industry; Resources; Consumer; Finance; and Utilities....
Computer Modelling Group Ltd., symbol CMG on Toronto, makes software and supplies services that help its clients get as much oil as possible from their existing wells. The stock market pick makes mostly recurring revenue from software licences and consulting contracts. That gives it long-term stability. Computer Modelling Group is one of the stocks we analyze in Stock Pickers Digest, our newsletter for aggressive investing. In the three months ended March 31, 2011, Computer Modelling’s revenue rose 0.6%, to $14.4 million from $14.3 million a year earlier. A 17% increase in consulting and contract research revenue more than offset a 2% drop in software licence sales due to the strong Canadian dollar....
Dun & Bradstreet Corp., symbol DNB on New York, is the world’s largest provider of credit reports on individual companies. Companies use these reports to make lending and purchasing decisions, and to cut their credit losses. We analyze Dun & Bradstreet in Wall Street Stock Forecaster, our newsletter for stock market trading in the U.S. markets The company gets two-thirds of its revenue from credit reports. The rest comes from other information products, including software to help other companies manage customer data and Internet sites....
Sherwin-Williams Co., symbol SHW on New York, is North America’s largest paint producer. The stock market investment also operates over 3,900 paint stores, which account for half its sales. Sherwin is one of the stocks we analyze in Wall Street Stock Forecaster, our newsletter for investing in the U.S. markets. In the three months ended March 31, 2011, Sherwin’s sales rose 18.5%, to $1.9 billion from $1.6 billion a year earlier. Acquisitions and higher selling prices were the main reason for the higher sales. Earnings more than doubled, to $68.3 million or $0.63 per share, from $32.6 million or $0.30 per share. However, the year-earlier results included an $11.4-million charge related to changes in the U.S. healthcare laws....
When you’re looking for stock market investments with the potential for strong gains, it pays to be skeptical of companies that mainly grow through acquisitions. That’s because the buyer of something rarely knows as much about it as the seller. So it follows that if a company makes enough acquisitions, it might eventually buy something that has hidden problems. At some point, those problems will come out into the open and hurt the buyer’s earnings.

How bad acquisitions can hurt a stock market investment’s prospects

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