Scott Clayton

Scott is an associate editor at TSI Network. He is the lead reporter and analyst for Dividend Advisor, Power Growth Investor and Canadian Wealth Advisor and a member of the Investment Planning Committee. Scott began his investment and financial career working with Pat McKeough at The Investment Reporter in the 1980s. Subsequently, he worked at the Financial Post Corporation Service for 10 years. He joined TSI Network in 1998. He is a Bachelor of Economics graduate of York University, and he also has an M.B.A. from the Schulich School of Business.

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These two Canadian ETFs track Canada’s best-established indexes and provide low-fee exposure to widely traded blue chip stocks.
FedEx Corp., symbol FDX on New York, delivers packages and documents in the U.S. and over 220 other countries and territories. Its fleet of 80,000 trucks and 684 aircraft delivers over eight million packages a day. In its fiscal 2011 third quarter, which ended February 28, 2011, FedEx earned $231 million or $0.73 a share. That’s down 3.3% from $239 million, or $0.76 a share, a year earlier. The decline was mainly the result of $43 million in one-time costs associated with the combination of the blue chip stock’s FedEx Freight and FedEx National LTL (less than truckload) divisions into a single business unit. The company also paid more for fuel and reinstated merit salary increases. As well, bad winter weather in the U.S. increased its aircraft-maintenance costs. Revenue rose 11.0%, to $9.7 billion from $8.7 billion, as the improving economy continues to spur demand for delivery services....
Aeropostale Inc., symbol ARO on New York, is a mall-based retailer of casual clothing and accessories. The company has 965 Aeropostale stores in the U.S., Canada and Puerto Rico. It mainly sells its clothing to 14-to-17-year-olds. Aeropostale’s 47 “P.S. from Aeropostale” stores in the U.S. are aimed at seven-to-12-year-old elementary-school children. In the fiscal year ended January 29, 2011, Aeropostale’s sales rose 7.6% to $2.4 billion from $2.2 billion the previous year. Same-store sales rose only 1%, compared to a gain of 10% in the prior year, but online sales rose 24.2% to $160.2 million from $129.0 million. The company’s earnings rose 0.8%, to $231.3 million from $229.5 million. Earnings per share rose 9.7%, to $2.49 from $2.27, on fewer shares outstanding. In the latest fiscal year, Aeropostale bought back 10.3 million shares for $257.5 million....
Hidden value is one of the key factors we look for when we choose stocks to recommend in our newsletters and investment services, including Stock Pickers Digest, our newsletter for aggressive investing. (In the latest Stock Pickers Digest, we’ve updated our buy/sell/hold advice on a niche technology firm with an important hidden asset. Read on for further details.) By hidden value, we mean valuable assets that are not getting the attention they deserve from investors. When a company’s assets are wholly or partially hidden, the stock trades for less than it’s really worth, so you get to buy at a bargain price....
Canada Bread Company Ltd., symbol CBY on Toronto, is Canada’s second-largest producer of baked goods after Weston Bakery. It also makes specialty pastas and sauces. The company’s main brands include Dempster’s, New York Bakery, Tenderflake, and Olivieri. Earnings fell 21.3% to $61.0 million, or $2.40 a share, in the fiscal year ended December 31, 2010. In 2009, it earned $77.5 million or $3.05 a share. If you exclude one-time items, such as restructuring expenses and costs to build a new bakery in Hamilton, Ontario, earnings per share fell 10.9% to $2.85 from $3.20. The new facility is expected to begin operating by July 1, 2011. Sales fell 6.9% to $1.6 billion from $1.7 billion. The strength of the Canadian dollar against the British pound and the U.S. dollar lowered the contribution of the company’s operations in the U.K. and the U.S. Prices of its ingredients, especially wheat, are also rising. However, the company is increasing its selling prices to offset rising costs....
We think the long-term outlook for China — and Chinese stocks — is bright. That’s because the country’s huge population is generally younger than North Americans, and large numbers of Chinese have the potential to advance from poverty into the middle class. (One of the best ways for investors to tap into Chinese growth is through low-fee exchange-traded funds. The SPDR S&P China ETF is one example of an exchange traded fund that focuses on China. You can get our very latest buy/sell/hold advice on this fund in the latest issue of Canadian Wealth Advisor. See below for further details.)

Political instability still a danger to foreign investors in China

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Investors generally look to aggressive stocks for capital gains and to more conservative stocks, like utilities, for income. However, there are some aggressive Canadian dividend paying stocks whose payouts are as high — or even higher — than more established companies. (We updated our buy/sell/hold advice on a high-dividend aggressive stock in the February 25, 2011, Stock Pickers Digest hotline. See below for further details.)

Dividends are a plus in aggressive investing — but focus on quality

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The Indian government recently projected that the country’s economy will grow at a rate of 8.6% this year. That’s up from the 8.0% growth rate the country recorded last year. That would be the country’s fastest growth rate since 2008. The government expects the fastest growth to come in India’s service sector (11%), followed by manufacturing (8.8%) and agriculture (5.4%).

Exchange traded funds make foreign investing simple

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On January 21, Stock Pickers Digest, our newsletter for aggressive investing, will unveil a stock that’s well positioned for big gains in 2011. In fact, we think this potentially high return investment’s prospects are so bright we’ve named it Stock Pickers Digest’s #1 stock pick for the coming year.

Hidden pluses give this stock the potential for big gains in the months ahead

This Canadian firm is in a great position profit as the North American economy and consumer confidence continue to improve. Plus, it has recently signed agreements with other international firms that let it tap into rich new markets with less risk.

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When you’re looking for high return investments, it pays to be skeptical of companies that rely too heavily on 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 a bad acquisition can cause high return investments to suffer

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