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DOREL INDUSTRIES $32.77 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.1 billion; Dividend yield: 4.0%) makes a range of items, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational goods, mainly bicycles.

In the three months ended June 30, 2014, Dorel’s sales rose 9.2%, to $655.8 million from $600.4 million a year earlier (all figures except share price and market cap in U.S. dollars). Sales rose 20.2% at the recreational segment and 3.2% at the juvenile products division. Home furnishing sales fell slightly.

Earnings per share rose 14.6%, to $0.47 from $0.41. Sales of its highly profitable Cannondale and Pacific Cycle premium bikes remain strong. That offset a small loss from Dorel’s 70% stake in Caloi, which it bought for an undisclosed amount last year.

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AEROPOSTALE INC. $3.07 (New York symbol ARO; TSINetwork Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding: 79.1 million; Market cap: $228.6 million; No dividends paid) is a mall-based retailer of casual clothing and accessories.

The company now has 923 stores in the U.S., Canada and Puerto Rico that mainly target 14- to 17-yearold women and men. Its 147 P.S. from Aeropostale stores in the U.S. are aimed at seven- to 12-year-old children.

In the three months ended August 2, 2014, Aeropostale’s sales fell 12.7%, to $396.2 million from $454.0 million a year earlier. Same-store sales declined 13%, compared to a 15% decline a year ago.

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LEON’S FURNITURE LTD. $14.00 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 71.0 million; Market cap: $1.0 billion; Dividend yield: 2.9%) has steadily opened new stores, growing from 27 in 2003 to 79 today.

But the company more than quadrupled in size overnight with its March 2013 purchase of its main rival, The Brick, for $700 million. The Brick has 222 locations across Canada. The chains continue to operate separately.

In the quarter ended June 30, 2014, the company’s sales fell 1.3%, to $474.5 million from $480.6 million a year earlier. The year-ago quarter included the first full three months of sales from The Brick. On a samestore basis, sales declined 1.3%.

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Every Thursday we bring you “Best U.S. Stocks.” 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, from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster. CONAGRA FOODS INC. (New York symbol CAG; www.conagrafoods.com) makes a wide variety of packaged foods, including Chef Boyardee canned pasta, Hunt’s tomato sauce, Peter Pan peanut butter, Orville Redenbacher popcorn and Reddiwip whipped cream. Consumers account for 70% of ConAgra’s sales. Businesses, like restaurants and other food makers, provide the remaining 30%. Sales rose 9.8%, from $12.1 billion in 2010 to $13.3 billion in 2012 (fiscal years end May 31). In January 2013, ConAgra paid $4.75 billion for Ralcorp Holdings, the largest maker of private label food in the U.S. The purchase lifted ConAgra’s sales to $15.5 billion in 2013 and to $17.7 billion in 2014. Private label foods now supply 26% of ConAgra’s total sales....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on a wide range of investing topics. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Tip of the week: “When you focus on investment quality and favour growth stocks over momentum stocks, you multiply your chances of success with aggressive stocks.”...

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. THOMSON REUTERS CORP. (Toronto symbol TRI; www.thomsonreuters.com) sells information products in four areas: financial (55% of revenue, 37% of earnings); legal (27%, 41%); tax (10%, 12%); and intellectual property and science (8%, 10%). The Americas supply 60% of its revenue, followed by Europe (29%) and Asia (11%)....

Pat McKeough responds to many requests from members of his Inner Circle for specific stock market 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 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. This week we had a question from an Inner Circle member about a company that helps Americans get paid. Paychex derives the greater part of its revenue from payroll services, but it also helps clients with health insurance programs and pension plans. Pat looks at the company’s business, including the escalation of its cloud computing and online services, and considers its prospects as it works to maintain and build on a strong customer base. Q: Hi Pat: What do you think of Paychex? Thanks for your help....

Every Thursday we bring you “Best U.S. Stocks.” 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, from coverage in our newsletter on U.S. investing, Wall Street Stock Forecaster. Or, as with this stock, from coverage in our advisory on more aggressive investing, Stock Pickers Digest

CHESAPEAKE ENERGY (New York symbol CHK; www.chkenergy.com) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 72% gas and 28% oil.

Chesapeake’s shares have nearly doubled since mid-2012, when activist investor Carl Icahn bought a stake in the firm. Icahn, who has a history of pushing companies to make changes that raise shareholder value, subsequently replaced four of Chesapeake’s eight board members with his nominees. The company also pushed out controversial co-founder, CEO and chairman Aubrey K. McClendon....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re an aggressive or a conservative investor, these weekly updates are designed to give you specific investment advice and stock investing tips. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “It’s easy to assume that frequently-quoted investment rules are based on successful experience, but they can often prove to be misleading and harmful.”...

CANADIAN NATIONAL RAILWAY CO. $80 (www.cn.ca) is now 13% owned by Microsoft co-founder Bill Gates. Ottawa limits any single shareholder from owning more that 15% of CN, so Mr. Gates has little room to increase his stake....

LOBLAW COMPANIES LTD. $55 (www.loblaw.ca) is testing a smaller version of its discount No Frills supermarkets. These stores, which operate under the Box banner, are cheaper to build than full-sized outlets and can fit in smaller strip malls, which lowers their rental costs....

IMPERIAL OIL LTD. $56 (www.imperialoil.ca) has begun converting its 95-year-old refinery in Dartmouth, Nova Scotia, into a storage facility for a variety of refined petroleum products, such as gasoline, diesel and home heating oil....

THOMSON REUTERS CORP. $42 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 803.7 million; Market cap: $33.8 billion; Price-to-sales ratio: 2.6; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.thomsonreuters.com) sells information products in four areas: financial (55% of revenue, 37% of earnings); legal (27%, 41%); tax (10%, 12%); and intellectual property and science (8%, 10%). The Americas supply 60% of its revenue, followed by Europe (29%) and Asia (11%).

Thomson’s revenue rose 6.2%, from $13.0 billion in 2009 to $13.8 billion in 2011 (all amounts except share price and market cap in U.S. dollars). That’s partly due to acquisitions, particularly in developing markets like Brazil. These new businesses helped offset lower sales at its main financial division as banks and brokers cut their spending after the 2008/2009 financial crisis.

Asset sales hurt revenue growth

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ANDREW PELLER LTD. $15 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.3 million; Market cap: $214.5 million; Price-to-sales ratio: 0.7; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest producer of wines, after Vincor International. The company has wineries in Nova Scotia, Ontario and British Columbia.

In the first quarter of its 2015 fiscal year, which ended June 30, 2014, Peller’s sales rose 9.3%, to $79.5 million from $72.7 million a year earlier. That’s partly because it started selling its Wayne Gretzky wines in Western Canada. It also launched several new products, such as skinnygrape spritzers and Panama Jack cocktails.

However, strong price competition and higher sales of lessprofitable brands cut Peller’s earnings by 19.4%, to $4.1 million, or $0.30 a share, from $5.1 million, or $0.37.

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GREAT-WEST LIFECO INC. $33 (Toronto symbol GWO; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 998.8 million; Market cap: $33.0 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) has paid an undisclosed amount for J.P. Morgan Chase’s (New York symbol JPM) pension plan recordkeeping operations.

The deal lets Great-West earn steady fees from these pension funds, and gives it an opportunity to profit from the performance of their investments.

Great-West is a buy.

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FORTIS INC. $34 (Toronto symbol FTS; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 215.4 million; Market cap: $7.3 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.fortis.ca) is expanding its Tilbury Island liquefied natural gas (LNG) facility in Delta, B.C.

The company is spending $400 million on this project, which is equal to 1.1 times its 2013 earnings of $353 million, or $1.74 a share.

This expansion will help the company meet rising demand as trucking companies convert to natural gas, which is up to 40% cheaper than diesel fuel. Fortis has also signed an agreement to sell LNG to Hawaii’s main electrical utility, which further cuts this project’s risk. Fortis is a hold.

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TELUS CORP. $40 (Toronto symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 615.5 million; Market cap: $24.6 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.telus.com) continues to expand its health care division, which helps doctors, pharmacies and hospitals convert patient records and other information to electronic formats.

The company recently paid an undisclosed sum for ZRx Prescriber, an app that lets doctors write prescriptions through their tablet computers and smartphones. The app can also access a patient’s drug insurance information, which speeds up claims and cuts down on errors. Over 520 clinics in Ontario and Quebec use ZRx Prescriber to process 400,000 prescriptions a month.

Telus is a buy.

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FINNING INTERNATIONAL INC. $33 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 172.2 million; Market cap: $5.7 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.finning.com) is the world’s largest dealer of tractors, bulldozers and trucks made by Caterpillar Inc. (New York symbol CAT). It also sells heavy equipment made by other firms.

Finning’s clients are mainly in the mining, forest products and construction industries.

In the three months ended June 30, 2014, the company’s overall revenue rose 9.1%, to $1.8 billion from $1.6 billion a year earlier.

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BOMBARDIER INC. (Toronto symbols BBD.A $3.72 and BBD.B $3.67; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $6.2 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.7%; TSINetwork Rating: Average; www.bombardier.com)had to ground its new CSeries passenger jet in May 2014 due to an engine malfunction. The engine’s manufacturer fixed the fault, and Bombardier has resumed
test flights.

The company has firm orders for 203 CSeries planes, plus options for an additional 310. If buyers exercise all of these options, the entire order of 513 aircraft would be worth roughly $34 billion U.S. That’s equal to 1.9 times Bombardier’s 2013 revenue.

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CENOVUS ENERGY INC. $34 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 757.0 million; Market cap: $25.7 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.1%; TSINetwork Rating: Average; www.cenovus.com) owns 50% of the Foster Creek and Christina Lake oil sands projects in Alberta; ConocoPhillips (New York symbol COP) owns the other 50%.

The partners are now developing a third property called Narrows Lake. The project’s first phase should start up in 2017 and will add 22,500 barrels to Cenovus’s daily oil production, which averaged 201,688 barrels in the latest quarter.

Cenovus is also developing two other 100%-owned oil sands projects: Telephone Lake and Grand Rapids. In all, these properties could produce up to 100,000 barrels a day.

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BANK OF MONTREAL $84 (Toronto symbol BMO; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 646.4 million; Market cap: $54.3 billion; Price-to-sales ratio: 2.6; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.bmo.com) earned $1.15 billion in the three months ended July 31, 2014, up 3.6% from $1.11 billion a year ago. Per-share earnings rose 4.2%, to $1.73 from $1.66, on fewer shares outstanding.

Earnings from Canadian retail banking (43% of the total) rose 8.0%, as low interest rates spurred demand for mortgages and business loans. The U.S. retail banking division (14%) reported a 6.2% gain in profits, mainly due to improving business loan demand. The bank’s trading division (25%) saw its earnings rise
13.8% on higher volumes and more stock-underwriting deals. However, wealth management earnings (18%) fell 5.4%, due to a one-time charge at its insurance business.

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TRANSCONTINENTAL INC. $16 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.0%; TSINetwork Rating: Average; www.tctranscontinental.com) is Canada’s leading printer of flyers, magazines, newspapers and books. It also publishes magazines and newspapers.

In May 2014, the company paid $133 million U.S. for Missouri-based Capri Packaging, which makes plastic bags and pouches for cheese and yogurt producers. Transcontinental feels it can use its printing expertise to make Capri more efficient. The purchase will add $72 million U.S. to its annual revenue of $2.1 billion (Canadian).

The company also recently agreed to pay $75 million for 74 community newspapers in Quebec, along with their websites. The seller is Sun Media, a subsidiary of Quebecor (Toronto symbol QBR.B).

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CGI GROUP INC. $39 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 311.7 million; Market cap: $12.2 billion; Price-to-sales ratio: 1.2; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) is a leading provider of computer outsourcing services. It helps its clients automate certain routine functions, like accounting and buying supplies. That lets companies improve their efficiency and focus on their main businesses.

CGI continues to benefit from Logica plc, a U.K.-based computer-outsourcing firm it bought for $2.7 billion in 2012.

In its 2014 third quarter, which ended June 30, 2014, CGI’s earnings rose 14.7%, to $229.8 million, or $0.72 a share. A year earlier, it earned $200.4 million, or $0.63. Revenue gained 3.9%, to $2.7 billion from $2.6 billion.

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SAPUTO INC. $65 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 195.8 million; Market cap: $12.7 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.6%; 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.

In February 2014, Saputo paid $449.6 million for 87.92% of Warrnambool Cheese and Butter Factory, one of Australia’s largest dairy producers.

Warrnambool boosted Saputo’s revenue by 20.6% in its fiscal 2015 first quarter, which ended June 30, 2014, to $2.6 billion from $2.2 billion a year ago. Favourable currency rates and higher cheese and butter prices in the U.S. also contributed to the gain. Earnings rose 6.3%, to $145.3 million, or $0.73 a share. A year earlier, Saputo earned $136.7 million, or $0.69.

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AGRIUM INC. $100 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 144.0 million; Market cap: $14.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.3%; TSINetwork Rating: Average; www.agrium.com) gets 80% of its sales and 65% of its earnings from its retail division, which sells seed, fertilizer and other products to farmers.

Agrium mainly gets the remaining 20% of sales and 35% of earnings by making fertilizers from natural gas. It also operates potash and phosphate fertilizer mines.

The company continues to expand its retail division, as steady sales from these stores cut its exposure to volatile bulk fertilizer prices.

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