Search

MOLSON COORS CANADA INC.(Toronto symbols TPX.A $82 and TPX.B $79; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 185.1 million; Market cap: $14.6 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.0%; TSINetwork Rating: Average; www.molsoncoors.com) is the world’s fifth-largest brewer by volume.

Beer sales are rising slowly in developed regions like North America. That’s why Molson Coors bought StarBev, which owns nine breweries in central and eastern Europe, for $3.5 billion in June 2012 (all amounts except share prices and market cap in U.S. dollars).

In the second quarter of 2014, the company’s worldwide beer volumes fell 0.9%. However, its revenue rose 0.9%, to $1.19 billion from $1.18 billion a year ago, because it raised its prices and sold more premium beers.

...

ENBRIDGE INC. $56 (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 846.4 million; Market cap: $47.4 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.enbridge.com) gets 90% of its revenue from pipelines that pump oil and natural gas from Western Canada to customers in Eastern Canada and the U.S. The remaining 10% mainly comes from distributing gas to 2.1 million consumers in Ontario, Quebec, New Brunswick and New York State.

New pipelines and other projects boosted Enbridge’s revenue by 164.1%, from $12.5 billion in 2009 to $32.9 billion in 2013. Earnings rose 68.8%, from $857.4 million to $1.4 billion. The company sold shares to help pay for its expansion, so per-share earnings rose at a slower pace of 50.8%, from $1.18 to $1.78.

Enbridge now plans to spend $42 billion on new pipelines and other projects over the next few years. Of that total, $37 billion of these projects already have secure commitments from oil producers, which cuts the risk of these investments. The company expects these new assets to increase its earnings per share by 10% to 12% each year through 2017.

...

NEWMONT MINING $26.31 (New York symbol NEM; Shares outstanding: 498.8 million; Market cap: $13.3 billion; TSINetwork Rating: Average; Dividend yield: 0.4%; www.newmont.com) recently shut down its 48.5%-owned Batu Hijau copper/gold mine in Indonesia.

The move was in response to the Indonesian government’s ban on raw material exports, which is aimed at pushing miners to process more ore in the country.

Newmont has now agreed to develop a new smelter with Freeport-McMoRan Inc. (New York symbol FCX), which also operates a copper mine in Indonesia. In addition, Batu Hijau has signed new deals to supply copper to two Indonesian companies that plan to build their own smelters. These developments should let Batu Hijau comply with the new regulations. The mine will probably reopen in the next few weeks.

...

ALLIED PROPERTIES REIT $35.76 (Toronto symbol AP.UN; Units outstanding: 69.5 million; Market cap: $2.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.9%; www.alliedpropertiesreit.com) is selling 4.9 million units to the public at $35.30 each to raise $172.5 million.

The REIT will mostly use the funds for acquisitions, including its recent purchase of 460 King Street West in downtown Toronto for $15 million. This addition completes Allied’s ownership along the eastern and southern perimeters of a large block at King and Spadina. The REIT can now use the block for a major redevelopment project.

Allied REIT is still a buy.

...

VERESEN $18.48 (Toronto symbol VSN; Shares outstanding: 220.3 million; Market cap: $4.1 billion; TSINetwork Rating: Average; Dividend yield: 5.4%) 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. To diversify, the company is expanding into power generation, including hydroelectric facilities, wind farms and natural gas-fired plants.

Veresen continues to move ahead with its plan to ship gas from Canada to its proposed $6.8-billion Jordan Cove liquefied natural gas plant in Oregon for export to Asia. If regulators give final approval, the project could start up in 2019.

...

PEMBINA PIPELINE $52.77 (Toronto symbol PPL; Shares outstanding: 327.0 million; Market cap: $16.8 billion; TSINetwork Rating: Average; Dividend yield: 3.3%; 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 bought rival Provident Energy, which extracts, transports and stores NGLs, for $3.2 billion in 2012.

This acquisition is paying off: in the quarter ended June 30, 2014, Pembina’s cash flow rose 27.3%, to $191.0 million from $150.0 million a year earlier. Cash flow per share gained 20.4%, to $0.59 from $0.49, on more shares outstanding. Pipeline expansions and strong profit margins at Provident were the main reasons for the gains.

...

ISHARES AUSTRALIA INDEX FUND $27.34 (New York symbol EWA; buy or sell through brokers) is an ETF that holds the 72 largest Australian stocks. Its MER is 0.48%.

The fund’s top holdings include Commonwealth Bank of Australia, 11.1%; BHP Billiton, 10.0%; Westpac Banking Corp., 9.2%; Australia and New Zealand Banking Group, 7.8%; National Australia Bank, 6.9%; Wesfarmers, 4.3%; Woolworths, 3.9%; CSL Ltd., 3.1%; Woodside Petroleum, 2.4%; Rio Tinto, 2.3%; Telstra Group, 2.0%, Macquarie Group, 1.4%; and Westfield Group, 1.3%.

Australia benefits from its stable banking and political systems. It is also rich in natural resources and close to key Asian markets with vast potential, including India and China.

...

ISHARES S&P INDIA NIFTY 50 INDEX FUND $30.98 (Nasdaq symbol INDY; buy or sell through brokers; us.ishares.com) is an ETF that aims to invest in the 50 largest, most liquid Indian securities.

Indian stocks have moved up steadily since the May 2014 election of Narendra Modi as prime minister.

India still needs to modernize its transportation,communications and electrical infrastructure. It also needs to reform its inefficient, corrupt bureaucracy.

...

ISHARES CDN REIT SECTOR INDEX FUND $16.64 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 Canadian real estate investment trusts in the S&P/TSX Capped REIT Index.

iShares CDN REIT’s expenses are 0.60% of its assets. The fund yields 5.0%.

The ETF’s largest holding is RioCan REIT at 19.3%, followed by H&R REIT (14.7%), Canadian REIT (7.8%), Dream Office REIT (7.0%), Calloway REIT (6.4%), Boardwalk REIT (6.3%), Canadian Apartment REIT (6.2%), Allied Properties REIT (5.8%), Cominar REIT (5.4%), Artis REIT (5.0%), Chartwell REIT (4.6%), Granite REIT (4.5%), Crombie REIT (2.4%), Northern Property REIT (2.2%) and Dream Global REIT (2.1%).

...

ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $44.50 (New York Exchange symbol ECH; buy or sell through brokers) is an ETF that aims to track the MSCI Chile Investable Market Index, which consists of stocks that mainly trade on the Santiago Stock Exchange.

The fund’s top holdings are S.A.C.I. Falabella (retail), 9.6%; Enersis SA (electricity), 9.2%; Empresas Copec SA (conglomerate), 7.9%; Empresa Nacional de Electricidad (electricity), 6.7%; LATAM Airlines, 5.5%; Cencosud SA (retailer), 4.9%; Empresas CMPC (pulp and paper), 4.8%; Banco de Chile, 4.6%; Banco Santander Chile (banking), 4.5%; and Quimica y Minera de Chile (mining), 4.1%.

The fund’s industry breakdown is: Utilities, 25.1%; Financials, 17.8%; Consumer Discretionary, 13.2%; Materials, 12.9%; Consumer Staples, 10.0%; Industrials, 8.1%; Energy, 7.8%; Telecommunications, 2.4%; and Information Technology, 1.9%.

...

ISHARES MSCI GERMANY FUND $29.36 (New York Exchange symbol EWG; buy or sell through brokers) tracks the stocks in the MSCI Germany Index. This index aims to replicate 85% of the German stock market’s market capitalization. The remaining 15% is unavailable for investment, partly due to limitations on foreign ownership.

The ETF’s top holdings are Bayer (diversified chemicals), 9.3%; Siemens (engineering conglomerate), 8.4%; BASF (chemicals), 8.0%; Daimler (autos), 6.6%; Allianz (insurance), 6.6%; SAP (software), 6.0%; Deutsche Telekom, 4.0%; BMW, 3.3%; and Volkswagen AG, 3.1%.

The fund’s industry breakdown includes: Consumer Discretionary, 21.7%; Financials, 16.1%, Materials, 14.6%; Industrials, 13.7%; Information Technology, 7.0%; Utilities, 4.9%; Telecommunication Services, 4.4%; Health Care, 4.1%; and Consumer Staples, 3.8%.

...

ISHARES MSCI SOUTH KOREA INDEX FUND $65.24 (New York Exchange symbol EWY; buy or sell through brokers) aims to track the MSCI Korea Index.

The ETF’s top holdings are Samsung Electronics, 18.6%; Hyundai Motor Co., 5.5%; SK Hynix Semiconductor, 3.9%; Posco (steel), 3.4%; Naver (Internet content), 3.3%; Shinhan Financial, 3.2%; Hyundai Mobis (auto parts), 3.0%; Kia Motors, 2.5%; KB Financial, 2.3%; and LG Chemical, 2.0%.

The fund’s industry breakdown is as follows: Information Technology, 33.1%; Consumer Discretionary, 19.5%; Financials, 14.1%; Industrials, 12.7%; Materials, 9.1%; Consumer Staples, 5.7%; Energy, 1.9%; Utilities, 1.8%; Telecommunication Services, 1.1%; and Health Care, 0.8%.

...

ISHARES MSCI EMERGING MARKETS INDEX FUND $45.58 (New York symbol EEM; buy or sell through brokers) aims to track the MSCI Emerging Markets Index.

Its geographic breakdown includes China, 17.6%; South Korea, 16.0%; Taiwan, 11.9%; Brazil, 11.3%; South Africa, 7.8%; India, 6.7%; Russia, 4.7%; Mexico, 4.7%; Malaysia, 3.9%; and Indonesia, 2.7%.

The fund’s top holdings are Samsung Electronics (South Korea), 3.2%; Taiwan Semiconductor (computer chips), 2.4%; Tencent Holdings (China: Internet), 2.0%; China Mobile, 1.7%; China Construction Bank, 1.3%; Naspers (South Africa: media and Internet), 1.2%; Industrial & Commercial Bank of China, 1.2%; Itau Unibanco Holding (Brazil: banking), 1.2%; and Gazprom (Russia: gas utility), 1.0%.

...

ISHARES MSCI JAPAN INDEX FUND $11.93 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an ETF that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.

The fund’s top holdings include Toyota, 5.8%; Mitsubishi UFJ Financial, 2.8%; Softbank Corp., 2.4%; Honda Motor, 2.0%; Sumitomo Mitsui Financial, 1.9%; Mizuho Financial Group, 1.6%; Japan Tobacco, 1.4%; Hitachi, 1.4%; Canon, 1.4%; and Takeda Pharmaceutical, 1.3%.

The fund’s industry breakdown includes: Consumer Discretionary, 20.5%; Financials, 20.1%; Industrials, 19.9%; Information Technology, 10.9%; Consumer Staples, 6.8%; Health Care, 6.2%; Materials, 5.7%; Telecommunication Services, 5.6%; Utilities, 2.4%; and Energy, 1.3%.

...

PENGROWTH ENERGY $6.70 (Toronto symbol PGF; Shares outstanding: 527.5 million; Market cap: $3.6 billion; TSINetwork Rating: Average; Divd. yield: 7.2%; www.pengrowth.com) plans to build a 15-kilometre pipeline to pump diluted bitumen from its new Lindbergh oil sands project in Alberta. The new line will connect to a larger one operated by Husky Energy.

The company will spend $20 million on this pipeline, which will make it easier for Pengrowth to sell Lindbergh’s oil to customers in Canada and the U.S. when the project starts up next year.

Lindbergh will add 12,500 barrels to Pengrowth’s overall daily production, which totalled 73,823 barrels in the latest quarter.

...

ENERPLUS CORP. $23.21 (Toronto symbol ERF; Shares outstanding: 204.2 million; Market cap: $4.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.7%) produces an average of 94,167 barrels of oil equivalent a day (59% gas and 41% oil).

The company’s properties are mainly in Alberta, Saskatchewan, B.C., North Dakota and Montana, as well as the Marcellus shale, which passes through Pennsylvania, New York, Ohio and West Virginia.

In the three months ended June 30, 2014, Enerplus’s production rose 15.5% from a year earlier. However, cash flow per share increased just 2.0%, to $1.04 from $1.02, as it realized lower prices for its Marcellus shale gas.

...

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. WESTJET AIRLINES (Toronto symbol WJA; www.westjet.com) serves 90 destinations in North America, Central America, the Caribbean and Europe. Its fleet of 107 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 13 Bombardier Q400 NextGen turboprop planes, which seat 78 passengers....

CRESCENT POINT ENERGY CORP. $43.17 (Toronto symbol CPG; Shares outstanding: 398.1 million; Market cap: $17.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.4%; www.crescentpointenergy.com) produces oil and natural gas in Western Canada, with a focus on its Bakken light oil development in southeastern Saskatchewan. Its output is 91% oil and 9% gas.

In the three months ended June 30, 2014, Crescent Point’s cash flow rose 26.2%, to $636.7 million from $504.4 million a year earlier.

The company increased its output by 16.7%, to 137,368 barrels of oil equivalent from 117,799. That, plus higher oil and gas prices, was the main reason for the higher cash flow. Cash flow per share rose at a slower rate of 18.3%, to $1.55 from $1.31, because Crescent Point issued shares to pay for acquisitions.

...

MANULIFE FINANCIAL $22.36 (Toronto symbol MFC; Shares outstanding: 1.9 billion; Market cap: $41.2 billion; TSINetwork Rating: Above Average; Dividend yield: 2.8%; www.manulife.ca) sells insurance, mutual funds and wealth management services. The company operates globally and has $637 billion of assets under management.

The company has just announced strong quarterly results and a 19.2% dividend increase, to $0.155 a share from $0.13. The stock yields 2.8%.

This is the first hike since Manulife cut its payout by 50% in 2009 to preserve capital after 2008’s stock market declines.

...

BANK OF NOVA SCOTIA $72.16 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $88.0 billion; TSINetwork Rating: Above Average; Div. yield: 3.7%, www.scotiabank.com) is the third-largest of Canada’s five big banks, with $791.5 billion of assets.

In the three months ended July 31, 2014, the bank earned $1.85 a share, up 36.0% from $1.36 a year earlier. The latest quarter included a one-time gain of $0.45 a share from the sale of most of the bank’s stake in mutual fund company CI Financial for $2.3 billion. Without one-time items, earnings per share rose 8.5%, to $1.40 from $1.29.

Higher loan demand and deposits pushed up the Canadian banking division’s earnings by 2.7%. That includes ING Direct, which Bank of Nova Scotia bought for $3.1 billion in late 2012.

...

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. Empire Company Ltd. (symbol EMP.A; www.empireco.ca), is a diversified Canadian firm based in Stellarton, Nova Scotia....

Pat McKeough responds to many requests from members of his Inner Circle for specific stock tips, 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 an Inner Circle member asked us about a company that is in the forefront of treating heart disease. Edwards Lifesciences makes the bulk of its money from heart valve technology and the rest on critical care, or hemodynamic monitoring. Pat examines Edwards’ leading products and particularly the surge in revenue from the Transcatheter Heart Valve. He also considers whether the company’s shares can continue their rise. Q: Good day, Pat: Can you please provide your opinion on Edwards Lifesciences? Thanks....

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. We prefer chipmakers that dominate their niche markets. Texas Instruments cuts its risk with a variety of niche products and customers. TEXAS INSTRUMENTS INC. (Nasdaq symbol TXN; www.ti.com) used to focus on chips for cellphones, but has shifted to analog chips, which convert inputs like touch, sound and pressure into electronic signals that computers can understand. Manufacturers use these chips in a variety of products, including cars, medical devices and appliances....

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 investing advice on the widest possible variety of topics. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice. Today’s tip: “There’s a high failure rate for those who start their own businesses, but if you know how to make the right choices, it’s still your best chance of getting rich.”...

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. Finning has many customers in the cyclical resource sector, which adds risk. However, it is a market leader. As well, complex new technologies like hydraulic fracturing, or fracking, and steam-assisted gravity drainage should spur demand for its specialized gear and services. FINNING INTERNATIONAL INC. (Toronto symbol FTT; 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....