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Twilio Inc. adds AI capabilities to stay ahead of rivals and win more strategic multi-year partnerships.
FedEx Corp. looks set to sustain its growth, and the spinoff of its Freight division will unlock shareholder value
Thomson Reuters Corp. offers a strong value proposition via continued price increases and recurring revenue growth across legal, tax, and corporate compliance customers.
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HOME CAPITAL GROUP INC. $32 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 66.0 million; Market cap; $2.1 billion; Price-to-sales ratio: 3.9; Dividend yield: 3.0%; TSINetwork Rating: Average; www.homecapital.com) offers most of its loans through 4,000 independent mortgage brokers. In July 2015, it cut ties with 45 of them after it uncovered inaccurate information on loan applications. Allegedly, these brokers falsified borrowers’ annual incomes but not their credit scores and property values. The company has now reviewed 75% of these loans. So far, it has not found any unusual problems. It expects to complete the process by the end of 2016. Home Capital also cuts its credit losses down by identifying problem loans early and adjusting the repayment terms. In the first quarter of 2016, it set aside $1.4 million to cover potential loan losses, down 42.0% from a year earlier....
THOMSON REUTERS CORP. $53 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 752.4 million; Market cap: $39.9 billion; Price-to-sales ratio: 3.4; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.thomsonreuters.com) mainly sells information products to financial clients, such as banks and brokerages. In 2015, this business supplied 52% of Thomson’s revenue. The company also sells specialized information to professionals in the legal (27%); tax and accounting (11%); and intellectual property and science (8%) fields. Its Reuters news division supplies the remaining 2%. Thomson now plans to sell its intellectual property business. It will probably use the expected proceeds of $3 billion to buy back its own shares (all amounts except share price and market cap in U.S. dollars). The sale should close later this year....
BANK OF NOVA SCOTIA $63 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $75.6 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.scotiabank.com) continues to expand its Internet and mobile banking operations. As a result, it is reorganizing its branches and cutting jobs. Severance payments and other costs will reduce the bank’s earnings by $0.22 a share in the quarter ended April 30, 2016. To put that in context, it earned $1.43 a share in the previous quarter. Bank of Nova Scotia is a buy.
TORSTAR CORP. $1.83 (Toronto symbol TS.B; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 80.6 million; Market cap: $147.5 million; Price-to-sales ratio: 0.2; Dividend yield: 14.2%; TSINetwork Rating: Average; www.torstar.com) recently paid $178 million for 56% of Vertical- Scope, a private firm that operates over 600 online forums and a variety of websites. The company has also launched a digital version of The Toronto Star, its flagship newspaper, for tablet computers. It will take a year or so for these new operations to begin contributing to Torstar’s sales. But they should help reduce its reliance on slower advertising revenue at its newspapers. Meantime, in the first quarter of 2016, Torstar’s losses worsened to $53.5 million, or $0.66 a share, from $459,000, or $0.01, a year earlier. Excluding unusual items, it lost $0.40 a share in the quarter, compared to a profit of $0.02. Revenue fell 9.1%, to $174.8 million from $192.3 million. Job cuts and other restructuring actions should save the company $20.7 million for all of 2016. It remains debt free, and holds cash of $32.5 million, or $0.40 a share. The $0.26-a-share dividend yields a high 14.2%. The company may reduce that payout, but is unlikely to completely eliminate it....