Latest Stock Advice
Nutrien Ltd. offers exposure to potash and nitrogen prices, a stable retail base and strong profitability.
Toromont Industries Ltd. should see continued earnings growth thanks to its leading market share and Canada’s plan to increase spending on infrastructure projects.
Top pick Barrick Mining just raised its dividend a whopping 140% as it generates record earnings and continues its strategic asset reorganization.
Warner Music Group Corp. is well-positioned for higher-margin catalog revenues, added streaming adoption, and new AI monetization opportunities.
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TORSTAR CORP. $1.82 (Toronto symbol TS.B; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 80.5 million; Market cap: $146.5 million; Price-to-sales ratio: 0.2; Dividend yield: 14.3%; TSINetwork Rating: Average; www. torstar.com) launched a digital version of The Toronto Star, its flagship newspaper, for tablet computers in September 2015. In addition to newspaper content, this free app, called Star Touch, gives users quick access to related information like photos, maps and videos. So far, Star Touch has attracted over 65,000 weekly and 26,000 daily users. The company spent $14 million in 2015 to set up Star Touch, and maintaining and updating it will cost a further $10 million this year. It expects Star Touch will break even in 2017....
FINNING INTERNATIONAL INC. $19 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 168.0 million; Market cap: $3.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Canada, South America and the U.K. Its main customers are in the oil, mining, forest-products and construction industries. The company continues to cut costs as low commodity prices hurt equipment demand. Finning recently announced plans to eliminate about 500 jobs by mid-2016. That’s in addition to the 1,900 workers, or 13% of its global workforce, laid off last year. Because of the moves, Finning has already reduced its annual expenses by $150 million, and expects higher savings this year....
POTASH CORP. OF SASKATCHEWAN $25 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 836.6 million; Market cap: $20.9 billion; Price-to-sales ratio: 3.5; Dividend yield: 5.6%; TSINetwork Rating: Average; www.potashcorp.com) continues to see weak demand and prices for its potash and other fertilizers. In response, the company will suspend production at two of its Saskatchewan mines for one month. That will reduce its 2016 output by 400,000 tonnes; in 2015, it sold 8.8 million tonnes. These latest closures are in addition to the company’s recent decision to shut down its potash mine in Picadilly, New Brunswick. Potash Corp. is still a hold.
These two leading food makers continue to benefit from the recent drop in the Canadian dollar, which enhances the value of their overseas sales. However, both trade at high multiples to their projected earnings. That could hurt their share prices if the dollar rebounds. SAPUTO INC. $40 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 392.9 million; Market cap: $15.7 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.4%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products, including milk, butter and cheese. It also operates dairies in the U.S., Australia and Argentina. The company’s sales rose 2.8% in its fiscal 2016 third quarter, which ended December 31, 2015, to $2.9 billion from $2.8 billion a year earlier. It gets 65% of its sales from outside Canada, and the lower Canadian dollar added $261 million to the latest quarter’s sales. Lower selling prices for cheese and butter cut sales by $191 million....