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Extendicare Inc. is pivoting toward the high-demand, high-margin service sector as aging demographics continue to work strongly in its favour.
Stanley Black & Decker Inc. offers a 3.7% yield as it continues its track record of 58 consecutive years of increases while trading cheaply at just 15.6 times rising earnings.
Motorola Solutions Inc. offers compelling value through its dominant market share, accelerating growth and strategic positioning for secular growth
Legacy Hardware Leader Pivots to Software and Security Subscription Model
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ISHARES CANADIAN UNIVERSE BOND INDEX ETF $31.87 (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the Canadian Universe Bond Index. The 957 bonds in the portfolio have an average term to maturity of 10.26 years. The fund’s MER is 0.33%. The bonds in the index are 72.0% government and 28.0% corporate. The fund yields 2.8%, compared to the Short-Term Bond Fund’s 2.4%. Its yield to maturity is 1.96%, 0.75 percentage points above the Short-Term Fund. That reflects the added risk of long-term bonds....
ARC RESOURCES $18.38 (Toronto symbol ARX; Shares outstanding: 348.3 million; Market cap: $6.2 billion; TSINetwork Rating: Speculative; Dividend yield: 3.3%; www.arcresources.com) produces oil and natural gas in Western Canada. Its average daily output of 119,243 barrels of oil equivalent is 66% gas and 34% oil. In the three months ended December 31, 2015, ARC’s cash flow per share dropped 26.6%, to $0.58 from $0.79 a year earlier. Production increased 1.1%, but its realized oil price fell 32.1%. Gas prices declined 37.6%. Like many oil and gas producers, ARC is cutting exploration and development spending. In 2016, it will devote $390.0 million to this purpose. That’s down 29.1% from $550.0 in 2015....
PENN WEST $1.17 (Toronto symbol PWT; Shs. o/s: 502.2 million; Market cap: $582.5 million; TSINetwork Rating: Speculative; No dividends paid; www.pennwest.com) has sold oilproducing properties worth over $1 billion since the start of 2015. Even so, its debt is still a very high $1.9 billion, or 3.3 times its market cap. In the three months ended December 31, 2015, Penn West’s production fell 20.3%, to an average of 77,398 barrels per day from 97,143. Cash flow per share fell sharply, to just $7.0 million, or $0.01 a share, from $137.0 million, or $0.28 a share. Penn West may still need to sell more assets to meet scheduled debt repayments. But without significantly higher oil and gas prices, those sales will further cut its already low cash flow....
PENGROWTH ENERGY $1.54 (Toronto symbol PGF; Shares outstanding: 543.0 million; Market cap: $792.8 million; TSINetwork Rating: Average; No dividends paid; www.pengrowth.com) has moved up on news that prominent Toronto investor Seymour Schulich now owns 14.7% of the company’s shares. That makes him Pengrowth’s largest shareholder. Schulich has a long history of investing in small oil and mining firms. These include a 27.6% stake in Birchcliff Resources (Toronto symbol BIR). Birchcliff is a recommendation of Stock Pickers Digest, our newsletter that focuses on aggressive investments. Schulich’s involvement is likely a plus for Pengrowth. But its shares will need stronger oil prices in order to move higher....