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NEW GOLD $4.71 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold- .com; Shares outstanding: 504.0 million; Market cap: $2.4 billion; No dividends paid) has four mines: the Mesquite project in the U.S., Cerro San Pedro in Mexico, the Peak mine in Australia and the New Afton mine in B.C.

New Gold also owns 30% of the El Morro copper/ gold project in Chile, 100% of the Blackwater property in B.C. and 100% of Ontario’s Rainy River project.

In the three months ended September 30, 2014, New Gold’s cash flow per share rose 60.0%, to $0.16 from $0.10 a year earlier. Gold production fell slightly, to 93,367 ounces from 94,038. But an 8.2% rise in copper output from New Afton and lower overall costs increased New Gold’s cash flow.

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LEON’S FURNITURE $15.20 (Toronto symbol LNF; TSINetwork Rating: Average) (416- 243-7880; www.leons.ca; Shares outstanding: 71.0 million; Market cap: $1.1 billion; Dividend yield: 2.6%) reported sales of $629.2 million in the three months ended September 30, 2014, up slightly from $628.6 million a year earlier.

Earnings gained 25.4%, to $27.3 million, or $0.38 a share. A year earlier, Leon’s earned $21.8 million, or $0.31 a share.

Growth by acquisition can be risky, especially with a deal as big as The Brick purchase. However, Leon’s is doing a good job of integrating The Brick. It’s also finding savings by combining both companies’ distribution networks and computer systems.

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ACI WORLDWIDE $19.49 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 114.9 million; Market cap: $2.2 billion; No dividends paid) makes software for processing transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. The company’s products also help cut fraud.

In the quarter ended September 30, 2014, ACI’s revenue rose 16.7%, to $249.6 million from $213.9 million a year earlier, mainly due to contributions from acquisitions. Earnings per share rose 5.9%, to $0.18 from $0.17.

The company has purchased a number of other firms recently. In November 2013, it paid $109 million for Official Payments Holdings, which processes about 20 million payments totalling over $9 billion annually. ACI also bought Retail Decisions (ReD) in August 2014 for $205 million. ReD is an e-commerce and fraud-prevention firm whose software serves the payments industry.

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MITEL NETWORKS $11.35 (Toronto symbol MNW; TSINetwork Rating: Extra Risk) (613-592-2122; www.mitel.ca; Shares outstanding: 99.9 million; Market cap: $1.1 billion; No dividends paid) has reported its third quarter of results that include Aastra Technologies, a Stock Pickers Digest recommendation that Mitel acquired in a friendly takeover on January 31, 2014.

In the latest quarter, Mitel’s revenue jumped 101.2%, to $272.4 million from $135.0 million a year ago (all figures except share price in U.S. dollars). Most of the increase came from Aastra.

Without one-time items, earnings gained 134.6%, to $19.0 million from $8.1 million. However, earnings per share rose just 28.6%, to $0.18 from $0.14, as the company issued new shares to pay for Aastra.

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WESTJET AIRLINES $31.05 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1- 877-493-7853; www.westjet.com; Shares outstanding: 127.8 million; Market cap: $3.9 billion; Dividend yield: 1.6%) has just reached a tentative labour agreement with its 1,200 pilots.

This deal follows a tentative agreement with a group representing its 2,600 flight attendants.

The company has a great hidden asset in its workforce, which continues to refrain from unionizing in favour of cooperating directly with management. Many flyers find that WestJet provides friendlier service than they get from unionized airlines. WestJet also benefits from the fact that most of its employees are also shareholders.

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HECLA MINING COMPANY $2.40 (New York symbol HL; TSINetwork Rating: Extra Risk) (208-769- 4100; www.hecla-mining.com; Shares outstanding: 349.5 million; Market cap: $881.7 million) explores for, mines and processes silver and gold in the U.S. and Mexico. Most of its silver output comes from its Greens Creek mine in Alaska and its Lucky Friday project in Idaho. The company’s Casa Berardi mine in Quebec, which it bought for $796 million in June 2013, supplies the majority of its gold production.

In the three months ended September 30, 2014, Hecla produced 2.9 million ounces of silver, up 26.1% from 2.3 million ounces a year earlier. Gold output rose 15.0%, to 42,501 ounces from 36,966. Cash flow per share climbed to $0.09 from $0.06.

Hecla expects its two silver mines to produce 9.5 million to 10 million ounces in 2014, while Greens Creek will add 55,000 ounces of gold. Casa Berardi should produce 125,000 ounces of gold this year.

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SHERRITT INTERNATIONAL $2.62 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 297.5 million; Market cap: $779.5 million; Dividend yield: 1.5%) sold off all of its coal interests for $793 million in cash in April 2014.

The company is now focused on nickel production, with operations in Cuba and Canada. As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba.

In the three months ended September 30, 2014, Sherritt’s revenue jumped 55.0%, to $302.7 million from $195.3 million a year earlier. That’s mainly because Ambatovy started up. Cash flow per share rose 25.0%, to $0.15 from $0.12.

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NISSAN MOTOR (ADR) $18.30 (Nasdaq symbol NSANY; TSINetwork Rating: Above Average) (310- 771-3111; www.nissan-global.com; Shares outstanding: 2.3 billion; Market cap: $41.2 billion; No dividends paid) has risen over 9% since mid-October, after the Japanese government and the country’s central bank said they would make huge investments in Japanese stocks. They will also expand the money supply by making major government bond purchases.

These moves have pushed the yen down to a seven-year low. This makes exports—like Nissan’s vehicles—much more attractive to foreign buyers.

Just-released figures show the Japanese economy shrank by 1.6% in the latest quarter, erasing any doubt that the stimulus is needed.

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DREAM OFFICE REIT $26.65 (Toronto symbol D.UN; TSINetwork Rating: Extra Risk) (416-365-3535; www.dream.ca/office; Units outstanding: 108.1 million; Market cap: $2.9 billion; Dividend yield: 8.4%) (formerly Dundee REIT) owns and manages 24.2 million square feet of office and retail space in major cities across Canada. In Western Canada, the REIT has 17% of its total square footage in Calgary and 21% elsewhere. In Eastern Canada, it holds 30% of its square footage in downtown Toronto, 14% in suburban Toronto and 18% elsewhere. Its occupancy rate is 93.0%.

In the quarter ended September 30, 2014, Dream’s revenue fell 1.3%, to $201.7 million from $204.3 million a year earlier. The trust sold five non-essential properties for $44.9 million in the latest quarter. That offset the expiring leases that it renewed at higher rates.

Cash flow per unit was unchanged at $0.63. Dream pays a monthly distribution of $0.1866 a unit, for an 8.4% yield.

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Pat McKeough responds to many requests from members of his Inner Circle for specific advice on the Canadian stock market and other investments 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 a report on one of the stocks profiled in these Q&A sessions. We give you Pat’s buy-hold-sell recommendation as well as his analysis of the stock. This is part of the specific buy, hold and sell advice we offer you in our daily posts. Every week you get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday, and “Our Top U.S. Stocks” on Thursday. Recently we received a question from an Inner Circle member about a Canadian firm that specializes in mortgages. First National Financial is the largest originator of mortgages outside the banks, with almost $80 billion under administration. Pat examines the strategies by which the company sells and securitizes its mortgages in order to free up capital and looks at the effect these strategies have on the company’s short- and long-term profit margins. Q: Dear Pat: What are your thoughts on First National Financial Corp.? Thanks....

Every Thursday we bring you our best U.S. stock picks. You get our specific recommendation on the top 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, from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster.

3M COMPANY (New York symbol MMM; www.3m.com) started up in 1902, when it was called the Minnesota Mining & Manufacturing Company.

It now makes over 55,000 different products, including pressure-sensitive masking and packaging tape, air purifiers, medical device components and reflective highway signs. Top brands include Post-it notes, Scotch tape, Scotch-Brite cleaning products, Scotchguard protection and Thinsulate insulation.

3M’s wide variety of products cuts its reliance on a single industry or customer. Sales from outside the U.S. account for two-thirds of its total.

Because the company’s product base is so broad, its results tend to track the overall global economy. As the world rebounded from the 2008/2009 recession, 3M’s sales jumped 33.5%, from $23.1 billion in 2009 to $30.9 billion in 2013.

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Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific investment advice. Each Investor Toolkit update gives you a fundamental piece of strategy, including advice on various ways of investing money, and shows you how you can put it into practice right away. In this case, the tip comes from a Member of my Inner Circle. Members can ask me and my investment team financial questions of any kind. Aside from questions on specific investments, members ask many other questions about how they should be investing their money....

Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendation 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.

Torstar has struggled in the past few years as more people get their news from the Internet, rather than newspapers. But the company is doing a good job of responding to its challenges, which should let it improve its earnings and maintain its current payouts.

TORSTAR CORP. (Toronto symbol TS.B; www.torstar.com) publishes the Toronto Star, Canada’s largest daily newspaper by circulation. It also publishes three other daily papers and over 100 weeklies.

The slow economy continues to hurt advertising sales at Torstar’s newspapers. In the quarter ended June 30, 2014, the company’s revenue fell 7.4%, to $225.6 million from $243.6 million a year earlier.

Earnings jumped 44.2%, to $18.1 million, or $0.23 a share, from $12.6 million, or $0.16 a share. However, if you disregard restructuring costs and other unusual items, earnings per share fell 4.8%, to $0.20 from $0.21.

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Every Monday we feature “A Stock to Sell” as our daily post. With every stock we recommend as a sell, we give you a full explanation of why we advise against investing in the stock at this time. ZARGON OIL & GAS (Toronto symbol ZAR; www.zargon.ca) produces natural gas and oil in Alberta, Manitoba, Saskatchewan and North Dakota. Its output is 62% oil and 38% gas....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice on buying stocks, 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 a report on one of the stocks profiled in these Q&A sessions. We give you Pat’s buy-hold-sell recommendation as well as his analysis of the stock. This is part of the specific buy, hold and sell advice we offer you in our daily posts. Every week you get “A Stock to Sell” on Monday, “Best Canadian Stocks” on Tuesday, and “Our Top U.S. Stocks” on Thursday.

Recently an Inner Circle member asked about the prospects of a Canadian oil service stock. Aveda provides transportation services for oil and gas producers in both Canada and the United States, with three quarters of its revenue coming from the U.S. The company has made several key acquisitions this year that have added to its profits—and its debt. Pat takes a hard look at the company’s balance sheet and considers its prospects in light of the dampening effect lower oil prices have on energy projects.

Q: Dear Pat: A company that would seem to be moving in the right direction is oil-service firm Aveda. Perhaps I can have your input regarding this prospect?

A: Aveda Transportation and Energy Services Inc. (symbol AVE on Toronto; www.avedaenergy.com) provides transportation services to oil and gas producers in Western Canada and the U.S., mainly in Texas, Pennsylvania, West Virginia and North Dakota. The U.S. supplies around 75% of the company’s revenue.

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TIM HORTONS INC. $88 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 132.8 million; Market cap: $11.7 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.timhortons.com) has accepted a friendly takeover offer from Miami-based Burger King Worldwide (New York symbol BKW).

Under the deal, Tim Hortons shareholders can opt to receive $88.50 a share in cash or 3.0879 Burger King shares (currently worth $106.05). Burger King will limit the overall cash payout, so most investors will likely receive $65.50 in cash plus 0.8025 of a share, for a total value of $93.06.

Investors who hold shares outside RRSPs and other registered accounts will be liable for capital gains taxes.

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SAPUTO INC. $33 (www.saputo.com) has raised its quarterly dividend by 13.0%, to $0.13 a share (split adjusted) from $0.115. The new annual rate of $0.52 yields 1.6%. Hold.

BOMBARDIER INC. $3.71 (www.bombardier.com) has received a firm order for 40 of its upcoming CSeries passenger jets from Macquarie AirFinance, as well as options for an additional 10 aircraft. Including this order, the company now has firm orders for 243 CSeries planes, plus options for 320 more....

SNC-LAVALIN GROUP INC. $51 (www.snclavalin.com) designed and built Montreal’s Maison symphonique concert hall, which houses the Montreal Symphony Orchestra, in 2009. The company also operates the hall under a long-term deal with the Quebec government....

CGI GROUP INC. $38 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 311.7 million; Market cap: $11.8 billion; Price-to-sales ratio: 1.1; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) is Canada’s largest provider of computer outsourcing services. CGI helps its clients automate routine functions, like accounting and buying supplies. That makes them more efficient and lets them focus on their main businesses.

Two-pronged strategy spurs results

CGI follows what it calls a “Build and Buy” strategy. The “Build” part refers to expanding relationships with existing clients and attracting new ones. The company’s long-term outsourcing contracts give it steady, predictable revenue streams. They also let CGI sell these clients other services.

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TECK RESOURCES LTD. $19 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 566.8 million; Market cap: $10.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 4.7%; TSINetwork Rating: Average; www.teck.com) has dropped 25% in the past three months, mainly due to the U.S. dollar’s recent rise and slowing economic growth in China and other parts of Asia. These factors have depressed the prices of metallurgical coal (which supplies 42% of Teck’s revenue) and copper (32%).

However, the company continues to benefit from rising zinc prices (26%). Thanks to better-than-expected production at its Red Dog mine in Alaska, Teck expects to produce 600,000 to 615,000 tonnes of zinc in 2014, up from its original forecast of 555,000 to 585,000. The company also plans to reopen its Pend Oreille zinc mine in Washington State by the end of 2014.

Meanwhile, Teck continues to aggressively cut its operating costs. It lowered its annual expenses by $360 million in 2013 and should achieve additional savings of $180 million a year by the end of 2014. The company has also reduced this year’s spending on new projects and upgrades by $150 million.

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EMERA INC. $36 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 142.6 million; Market cap: $5.1 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.3%; TSINetwork Rating: Average; www.emera.com) is Nova Scotia’s main power supplier. It also holds interests in electrical utilities in the U.S. and the Caribbean.

The company has raised its quarterly dividend by 6.9%, to $0.3875 a share from $0.3625. The new annual rate of $1.55 yields 4.3%.

In addition, Emera announced that it expects to increase its dividend by 6% annually for the next five years.

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SHAWCOR LTD. $54 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $3.5 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.1%; TSINetwork Rating: Average; www.shawcor.com) recently won contracts to coat underwater pipelines for the Shah Deniz project, which pumps natural gas under the Caspian Sea to Azerbaijan. From there, other pipelines transport the gas to southern Europe.

The total value of these deals—$200 million U.S.—is equal to 12% of the company’s 2013 revenue of $1.8 billion (Canadian). ShawCor expects to complete these jobs from 2015 to 2018.

ShawCor is a buy.

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CANADIAN PACIFIC RAILWAY LTD. $231(Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.5 million; Market cap: $39.6 billion; Price-to-sales ratio: 6.4; Dividend yield: 0.6%; TSINetwork Rating: Above Average; www.cpr.ca) prefers to use its excess cash to buy back shares instead of raising its dividend. That’s because many of its investors live in the U.S. and are subject to withholding taxes on dividends from Canadian firms.

The company could repurchase up to 5.3 million shares under its latest authorization. It has now reached this limit, so it has increased its target to 12.65 million shares, or 7% of the total outstanding. It expects to complete these purchases by March 16, 2015.

CP Rail is a buy.

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PENGROWTH ENERGY CORP. $5.02 (Toronto symbol PGF; Aggressive Growth and Income Portfolios, Resources sector; Shares outstanding: 528.1 million; Market cap: $2.7 billion; Price-to-sales ratio: 2.0; Dividend yield: 9.6%; TSINetwork Rating: Average; www.pengrowth.com) is shifting away from its traditional oil and natural gas operations and into projects with better long-term potential, such as its Lindbergh oil sands development in Alberta’s Cold Lake region.

Pengrowth is spending $630 million on Lindbergh’s first phase, which should start up in early 2015 and produce 12,500 barrels a day. That’s equal to 16.9% of Pengrowth’s second quarter output of 73,823 barrels a day (56% oil and natural gas liquids, 44% natural gas). Future phases will raise the project’s daily production to 50,000 barrels by 2020. Lindbergh’s reserves should last 25 years. The company’s cash flow per share will probably fall from $1.09 in 2013 to $1.01 in 2014. However, it should improve to $1.38 in 2015. The stock trades at a low 3.6 times that forecast.

Pengrowth’s improving cash flow should also let it keep paying monthly dividends of $0.04 a share, for an 9.6% annualized yield.

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