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Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendations on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves you should know about, from coverage in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor.

WESTJET AIRLINES (Toronto symbol WJA; www.westjet.com) serves 91 destinations in North America, Central America, the Caribbean and Europe. Its fleet of 109 modern Boeing 737s are 30% more fuel efficient than older jets.

In June 2013, the company launched WestJet Encore, its Canadian regional airline. This business now operates 14 Bombardier Q400 NextGen turboprop planes, which seat 78 passengers.

In the three months ended September 30, 2014, WestJet’s earnings, excluding one-time items, jumped 30.9%, to a third-quarter record of $85.4 million from $65.1 million a year earlier. Earnings per share gained 32.0%, to $0.66 from $0.50, on fewer shares outstanding. This was WestJet’s 38th consecutive quarter of profitability. Revenue rose 9.2%, to $1.0 billion from $924.8 million.

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Every Monday we feature “A Stock to Sell” as our daily post. With every stock or investment we recommend as a sell, we give you a full explanation of why we advise against investing in it at this time.

Westport Innovations (symbol WPT on Toronto; www.westport.com) develops technology that lets engines operate on gaseous fuels, such as natural gas or hydrogen.

The company also has a 50/50 joint venture with Cummins Inc. (symbol CMI on New York) called Cummins Westport Inc. The partnership sells a range of low-emission alternative-fuel engines for medium-duty trucks.

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Pat McKeough responds to many requests from members of his Inner Circle for specific stock advice as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle.

Recently an Inner Circle member asked us about a uranium mining and exploration stock. Uranium Energy Corp. has one producing mine and several development-stage projects in Texas as well as exploration projects elsewhere. Pat examines the prospects for this junior in light of the growing demand from nations that still have millions living without electricity. He balances that against the competitive and regulatory issues that nuclear power faces in the U.S. and Canada as it competes with liquefied natural gas (LNG) as a fuel source.

Q: Hi, Pat: I would like your opinion on Uranium Energy Corp. Thank you.

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BONAVISTA ENERGY $6.56 (Toronto symbol BNP; Shares outstanding: 203.4 million; Market cap: $1.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.4%; www.bonavistaenergy.com) explores for oil and natural gas in Alberta, Saskatchewan and British Columbia. Its production is 69% gas and 31% oil.

In the three months ended September 30, 2014, Bonavista’s cash flow per share fell 1.6%, to $0.60 from $0.61 a year earlier.

Production rose just 1.5%, to 74,720 barrels of oil equivalent a day from 73,632. However, that’s because Bonavista sold heavy-oil projects, which are less of a focus for the company.

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PEYTO EXPLORATION & DEVELOPMENT CORP. $30.32 (Toronto symbol PEY; Shares outstanding: 153.7 million; Market cap: $4.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.4%; www.peyto.com) produces and explores for oil and natural gas in Alberta. Its average daily production of 77,592 barrels of oil equivalent is 90% gas and 10% oil.

In the quarter ended September 30, 2014, Peyto’s cash flow rose 62.7%, to $1.09 a share from $0.67 a year ago. That’s because it raised its production by 37.7% and realized higher oil and gas prices.

The company is forecast to generate cash flow of $4.80 a share in 2015. That estimate will fall if oil prices stay low for some time, but Peyto’s high weighting in gas will largely offset lower oil prices. Peyto trades at 6.3 times the current forecast, which is reasonable in light of its strong growth prospects.

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H&R REIT $22.71 (Toronto symbol HR.UN; Units outstanding: 274.1 million; Market cap: $6.1 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.9%; www.hr-reit.com) is selling part ownership of 101 industrial properties in Canada and the U.S. for $731 million. In all, these buildings comprise 19.5 million square feet. The buyers include the Canadian Public Sector Pension Investment Board.

H&R will keep a 50% interest in the Canadian properties and a 49.5% stake in the U.S. portfolio. It will keep managing these assets and will receive fees for doing so. H&R will retain full ownership of 14 other industrial properties.

The REIT will use the proceeds to pay down debt and buy more shopping malls and office buildings.

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MARKET VECTORS VIETNAM ETF $18.84 (New York symbol VNM; buy or sell through brokers) holds shares of Vietnamese companies or foreign firms that get a significant amount of their revenue from Vietnam.

The ETF’s top holdings are Masan Group (food, resources and banking conglomerate), 8.7%; Vincom Corp. (real estate), 7.9%; Bank for Foreign Trade of Vietnam, 7.6%; Saigon Thuong Tin Commercial Bank, 6.8%; Gamuda Bhd (a Malaysia-based construction group), 5.3%; Minor International (a Thailand- based firm with hotels and fast-food restaurants in Vietnam), 5.2%; and PetroVietnam Technical Services (oil field services), 4.8%.

Market Vectors Vietnam ETF’s industry breakdown is as follows: Financials, 37.6%; Energy, 16.1%; Consumer Staples, 13.3%; Industrials, 11.6%; Consumer Discretionary, 10.6%; Materials, 4.3%; and Utilities, 3.3%. Its expense ratio is 0.76%.

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ISHARES CHINA LARGE-CAP ETF $42.10 (New York symbol FXI; buy or sell through brokers) is an exchange traded fund that aims to track the FTSE China 50 Index, which is made up of the 50 largest, most liquid Chinese stocks. All of the companies in the index trade on the Hong Kong exchange. Some also trade as American depositary receipts (ADRs) on New York.

The fund’s top holdings are Tencent Holdings, 8.4%; China Construction Bank, 7.9%; China Mobile, 7.7%; Industrial & Commercial Bank, 7.2%; Bank of China, 6.1%; China Life, 4.8%; Ping An Insurance, 4.5%; PetroChina, 4.1%; CNOOC Ltd., 3.9%; China Petroleum and Chemical, 3.7%; Agricultural Bank of China, 2.5%; and China Pacific Insurance, 2.5%.

The fund’s holdings give it the following industry breakdown: Financials, 50.3%; Oil and Gas, 13.8%; Telecommunications, 11.1%; Technology, 9.9%; Consumer Goods, 6.3%; Industrials, 4.2%; and Basic Materials, 2.4%. Its expense ratio is 0.74%.

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PENGROWTH ENERGY $3.35 (Toronto symbol PGF; Shares outstanding: 530.1 million; Market cap: $1.8 billion; TSINetwork Rating: Average; Dividend yield: 14.3%; www.pengrowth.com) has started injecting steam into its Lindbergh oil sands project in Alberta to loosen the tar-like bitumen and pump it to the surface.

Pengrowth believes that Lindbergh’s low operating costs will let it generate positive cash flow, even at today’s depressed oil prices.

As well, now that construction on Lindbergh has ended, the company’s 2015 capital spending will fall sharply from the $740 million to $770 million it probably spent in 2014.

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Every Thursday we bring you one of our best U.S. stock picks. You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You will read about stocks making moves you should know about, most often from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster.

In August 2014, Gannett announced it would split into two companies. One will focus on newspapers and their associated websites, and the other will hold its TV stations and stand-alone websites.

The stock is down 11% since the spinoff announcement, mainly because investors are worried about falling advertising revenue.

Still, studies have shown that after the first few months, spinoffs tend to outperform groups of comparable stocks for several years. That’s mainly because companies will only take on the costs of a spinoff when they have reason to believe it will boost the value of both the new and remaining businesses.

GANNETT CO., INC. (New York symbol GCI; www.gannett.com) is the largest newspaper publisher in the U.S., with 82 dailies, including USAToday, its flagship paper.

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BCE INC. $54.40 (Toronto symbol BCE; Shares outstanding: 839.6 million; Market cap: $44.9 billion; TSINetwork Rating: Above Average; Dividend yield: 4.5%; www.bce.ca) recently agreed to buy Glentel Inc. (Toronto symbol GLN) for $670 million.

Glentel sells mobile phones and subscription plans through 494 Canadian stores, mainly under the Wireless Wave banner. Glentel also has 735 U.S. outlets and 147 in Australia and the Philippines.

However, rival wireless carrier Rogers Communications (Toronto symbol RCI.B) legally challenged the takeover. Rogers claims that its existing deal with Glentel gives it the right to block any change in control.

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POWERSHARES QQQ ETF $101.36 (Nasdaq symbol QQQQ; buy or sell through brokers; www.invescopowershares- .com), formerly called Nasdaq 100 Trust Shares, holds stocks that represent the Nasdaq 100 Index, which consists of the 100 largest shares on the Nasdaq exchange, based on market cap.

The Nasdaq 100 Index contains shares of companies in a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial companies. The fund’s expenses are about 0.20% of its assets.

The index’s highest-weighted stocks are Apple, Microsoft, Amgen, Google, Cisco Systems, Intel, Amazon.com, Gilead Sciences, Comcast Corp. and Facebook.

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SPDR S&P 500 ETF $202.31 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. companies that are chosen based on their market cap, liquidity and industry group.

The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, Chevron, General Electric, Berkshire Hathaway, and Wells Fargo & Co. The fund’s expenses are just 0.10% of its assets.

If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.

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ISHARES CANADIAN SELECT DIVIDEND INDEX ETF $24.27 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highestyielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of the ETF’s assets. The fund’s MER is 0.55%, and it yields 3.9%.

The fund’s top holdings are CIBC, 7.3%; TD Bank, 6.8%, National Bank, 6.7%; Bank of Montreal, 6.1%; Royal Bank, 5.5%; BCE, 4.8%; Ag Growth International, 4.6%; Bank of Nova Scotia, 4.5%; Bonterra Energy, 4.2%; and Laurentian Bank of Canada, 3.9%.

The ETF holds 55.2% of its assets in financial stocks. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.

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IBM $155.05 (New York symbol IBM; Shares outstanding: 989.7 million; Market cap: $197.9 billion; TSINetwork Rating: Above Average; Dividend yield: 2.8%; www.ibm.com) has signed several new cloud computing contracts. These deals will help boost its cloud computing revenue to $7 billion in 2015, or about 7% of its total projected revenue of $99 billion.

Among them is a 10-year, $2.0-billion deal to build and manage a cloud platform for ABN Amro, one of the Netherlands’ leading banks.

The company has also signed a seven-year, $1.25-billion contract to build a cloud-based system for U.K.-based advertising agency WPP plc. Under the deal, IBM will combine WPP’s mainframe computers with new remote servers.

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VERESEN $16.23 (Toronto symbol VSN; Shares outstanding: 279.6 million; Market cap: $4.7 billion; TSINetwork Rating: Average; Dividend yield: 6.2%; www.vereseninc.com) owns pipelines, power plants and gas-processing facilities across North America.

A major holding is 50% of the Alliance gas line, which runs 3,000 kilometres between Chicago and Fort St. John, B.C. Veresen also owns the Alberta Ethane Gathering System, 42.7% of the Aux Sable NGL plant, and the Hythe/Steeprock natural gas gathering and processing complex in the Cutbank Ridge region of Alberta and B.C.

In the quarter ended September 30, 2014, Veresen’s cash flow per share rose 4.5%, to $0.23 from $0.22.

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PEMBINA PIPELINE $39.55 (Toronto symbol PPL; Shares outstanding: 336.0 million; Market cap: $13.5 billion; TSINetwork Rating: Average; Dividend yield: 4.4%; www.pembina.com) owns pipelines that carry half of Alberta’s conventional oil, 30% of Western Canada’s natural gas liquids (NGLs) and almost all of B.C.’s conventional oil.

Pembina also owns extensive facilities to extract, process and store NGLs.

In the quarter ended September 30, 2014, Pembina’s cash flow per share fell 6.2%, to $0.61 from $0.65. But that’s mainly because the company hired new employees and more consultants to support its continued rapid growth.

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TD BANK $52.89 (Toronto symbol TD; Shares outstanding: 1.8 billion; Market cap: $90.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.6%; www.td.com) is Canada’s largest bank, with $944.7 billion of assets. It also operates 1,318 branches in the U.S.—compared to 1,165 in Canada—and owns 40.72% of TD Ameritrade (New York symbol AMTD), a leading online brokerage.

Excluding one-time items, TD’s earnings per share rose 15.1% in the fiscal year ended October 31, 2014, to $4.28 from $3.72. Revenue gained 9.2%, to $30.0 billion from $27.3 billion.

TD continues to benefit from its early 2014 deal with Aimia (Toronto symbol AIM) to become the main credit card issuer for the popular Aeroplan travel-reward program. The bank’s Canadian and U.S. retail operations are also profiting from stronger growth in both loans and deposits. In addition, the U.S. business is gaining from acquisitions, including Target Corp.’s U.S. credit card portfolio.

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CANADIAN REIT $48.21 (Toronto symbol REF.UN; Units outstanding: 72.4 million; Market cap: $3.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.6%; www.creit.ca) owns 198 properties, including retail, industrial and office buildings, across Canada and in Chicago. These holdings contain 24.6 million square feet of leasable area. The trust’s occupancy rate is 95.3%.

In the three months ended September 30, 2014, Canadian REIT’s revenue rose 1.5%, to $100.8 million from $99.3 million a year earlier. Cash flow per unit gained 2.8%, to $0.74 from $0.72.

Canadian REIT added $191.1 million worth of buildings in 2013. That followed $401.9 million of purchases in 2012, including 50% of Calgary Place, a 575,000-square-foot office and retail complex, for $156.0 million. So far this year, it has made one acquisition: a 261,000-square-foot industrial property near Toronto’s Pearson International Airport for $29.3 million.

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ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $39.54 (Toronto symbol AP.UN; Units outstanding: 74.7 million; Market cap: $3.1 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.7%; www.alliedreit.com) owns 138 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 9.9 million square feet of leasable area.

Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to retail space. They usually feature exposed beams, interior brick and hardwood floors.

Allied bought $400 million of properties in 2012 and $182.4 million in 2013. In the first three quarters of 2014, it added seven more for $210.0 million.

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CANADIAN PACIFIC RAILWAY LTD. $231.77 (Toronto symbol CP; Shares outstanding: 171.0 million; Market cap: $39.4 billion; TSINetwork Rating: Average; Dividend yield: 0.6%; www.cpr.ca) has agreed to form a 50/50 joint venture with DREAM Unlimited Corp., Toronto symbol DRM.

This new business—called DREAM Van Horne Properties—will redevelop several of CP’s real estate holdings, helping the company unlock some of their hidden value.

These assets include 75-acre Schiller Park in Chicago; Obico, a 74-acre site near Toronto; the 92-acre South Edmonton Yard, close to downtown Edmonton; and Lucien L’allier, a three-acre site in Montreal.

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IBM $156.96 (New York symbol IBM; Shares outstanding: 989.7 million; Market cap: $157.0 billion; TSINetwork Rating: Above Average; Dividend yield: 2.8%; www.ibm.com) reported better-than-expected earnings in the latest quarter, but that was mainly due to cost cuts, as demand for the company’s mainframes and computer services has weakened.

In the three months ended December 31, 2014, IBM’s per-share earnings fell 5.7%, to $5.81 from $6.16. That beat the consensus estimate of $5.41.

Revenue fell 11.9%, to $24.1 billion from $27.4 billion, missing the consensus estimate of $24.8 billion. If you adjust for foreign exchange rates and the sale of the company’s server business, revenue declined by 2%.

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PENGROWTH ENERGY $4.01 (Toronto symbol PGF; Shares outstanding: 530.1 million; Market cap: $2.2 billion; TSINetwork Rating: Average; Dividend yield: 6.0%; www.pengrowth.com) has cut its capital spending plans and dividend to conserve cash in the face of falling oil prices.

Capital spending will drop 74.0%, to $200 million from $770 million in 2014. The company is also cutting its monthly dividend by 50.0%, from $0.04 a share to $0.02. The new rate still yields a high 6.0%.

Pengrowth is still a buy.

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IMPERIAL OIL $49.56 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $43.0 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.imperialoil.ca) owns roughly 500 of the 1,700 Esso gas stations in Canada.

The company is considering selling its companyowned stations to independent operators. It’s likely that it would only sell to buyers who agree to purchase their fuel from Imperial and keep using the Esso brand.

Imperial is also looking at options to spur growth at its On the Run convenience stores. It may sell them outright or set them up as franchises.

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POWER CORP. $31.38 (Toronto symbol POW; Shares outstanding: 412.6 million; Market cap: $15.1 billion; TSINetwork Rating: Above Average; Divd. yield: 3.7%; www.powercorporation.com) is a diversified holding company. It holds its financial assets through 65.7%-owned Power Financial.

These financial assets include 68.1% of Great- West Lifeco, one of Canada’s largest life insurers, and 58.7% of IGM Financial, a leading Canadian mutual fund provider.

Power Financial also owns 50% of holding company Parjointco, which holds 55.5% of Switzerland- listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), SGS (inspection, testing and certification services) and Lafarge (cement and building materials). Power Corp. also has investments in Asia.

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