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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 advice on stock market trading and other investment topics. 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: “Worrying about things like the direction of the economy—rather than about the long-term strengths and weaknesses of the stocks you own—can lead investors into disastrous buy-sell decisions.” Many investors spend a lot of time worrying about the wrong things, while paying little attention to anything that has a direct impact on the value of their investments. For instance, at times they may mull over every tidbit of economic information that comes out, and how it differs from its predecessor of a week or a month earlier. They hope to detect a pattern—a sign that the economy is mending and headed for a return to steady growth, or deteriorating and doomed to plunge into a renewed recession....

CHEMTRADE LOGISTICS INCOME FUND (Toronto symbol CHE.UN; www.chemtradelogistics.com) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base-metal processors. These companies’ activities create sulphur, acid and other by-products that Chemtrade converts into useful chemicals, like sulphuric acid. The trust also offers a range of environmental services through its Marsulex subsidiary, such as improving air quality and handling and treating industrial waste. Chemtrade’s revenue rose 30.4% in the three months ended March 31, 2014, to $273.9 million from $210.0 million a year earlier....

PENGROWTH ENERGY $7.12 (Toronto symbol PGF; Shares outstanding: 526.2 million; Market cap: $3.7 billion; TSINetwork Rating: Average; Dividend yield: 6.7%; www.pengrowth.com) produced 75,102 barrels a day (55% oil and natural gas liquids, 45% natural gas) in the first quarter of 2014, down 16.3% from 89,702 a year earlier.

The drop was mainly because Pengrowth sold several less important oil and gas properties in Western Canada. It’s investing the proceeds in more promising projects, including its Lindbergh oil sands development in Alberta’s Cold Lake region.

Pengrowth’s cash flow, which excludes these losses, fell 6.9%, to $0.27 a share from $0.29. However, that beat the consensus estimate of $0.25.

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BONAVISTA ENERGY $16.63 (Toronto symbol BNP; Shares outstanding: 189.3 million; Market cap: $3.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.1%; www.bonavistaenergy.com) explores for oil and natural gas in Alberta, Saskatchewan and British Columbia. Its production is 65% gas and 35% oil.

In the three months ended March 31, 2014, Bonavista’s cash flow per share gained 40.4%, to $0.80 from $0.57 a year earlier. Production rose just 2.2%, to 73,936 barrels of oil equivalent a day from 72,333. But its realized gas price jumped 55.5%, to an average of $5.07 per thousand cubic feet from $3.26, while oil prices rose 6.2%, to $79.68 a barrel from $75.05.

Bonavista plans to spend $580 million to $600 million on exploration and development in 2014. Its plans include drilling 130 to 135 wells, which will let it raise its average 2014 production as high as 77,000 barrels of oil equivalent a day. For all of 2013, Bonavista spent $460 million to drill 126 wells.

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PEYTO EXPLORATION & DEVELOPMENT CORP. $39.25 (Toronto symbol PEY; Shares outstanding: 153.7 million; Market cap: $6.1 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.1%; www.peyto.com) produces and explores for oil and natural gas in Alberta. Its average daily production of 72,209 barrels of oil equivalent is 90% gas and 10% oil.

In the quarter ended March 31, 2014, Peyto’s cash flow rose 53.6%, to $1.06 a share from $0.69 a year earlier. That’s because the company raised its production by 30.4%. Gas prices also gained 27.5%, to an average of $4.45 per thousand cubic feet from $3.49, while oil prices rose 6.1%, to $80.49 a barrel from $75.88.

Peyto plans to spend $625 million on exploration and development in 2014, which will let it drill 110 to 125 wells. To put that in context, the company spent $578 million to drill 99 wells in 2013.

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BELL ALIANT INC. $28.91 (Toronto symbol BA; Shares outstanding: 227.8 million; Market cap: $6.5 billion; TSINetwork Rating: Average; Dividend yield: 6.6%; www.aliant.ca) continues to invest heavily in fibre optic networks. It now has 963,048 high-speed Internet users (up 3.9% from a year earlier) and 189,781 digital TV customers (up 38.3%).

However, lower demand for regular phone services cut Bell Aliant’s revenue by 1.2%, to $675.7 million, in the three months ended March 31, 2014, from $683.6 million a year earlier. Before one-time items, earnings declined 9.1%, to $0.40 a share from $0.44.

Due to the cost of Bell Aliant’s network upgrades, its annual dividend of $1.90 a share (6.6% yield) accounts for over 100% of its cash flow, after capital expenditures. However, that payout ratio should drop to 75% to 85% after it finishes these projects by 2016. The stock trades at a high, but still reasonable, 18.1 times its forecast 2014 earnings of $1.60 a share.

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VANGUARD FTSE EMERGING MARKETS ETF $42.42 (New York symbol VWO; buy or sell through brokers) aims to track the Financial Times Stock Exchange (FTSE) Transitions Index, which is made up of common stocks of companies in developing countries. The fund has an MER of just 0.15%.

Vanguard FTSE Emerging Markets ETF’s top holdings include Taiwan Semiconductor (Taiwan: computer chips), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Vale SA (Brazil: mining), Gazprom (Russia: gas utility), China Construction Bank, Tencent Holdings (China: Internet), Industrial & Commercial Bank of China, Naspers Ltd. (South Africa: media) and MTN Group (South Africa: wireless).

The $59.3-billion fund’s breakdown by country is as follows: China (20.6%), Taiwan (13.7%), Brazil (13.7%), India (9.9%), South Africa (9.7%), Mexico (5.7%), Russia (5.4%), Malaysia (5.2%), Indonesia (2.9%), Thailand (2.8%), Turkey (1.9%), Chile (1.7%), Poland (1.7%) and others (5.1%).

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VANGUARD GROWTH ETF $97.09 (New York symbol VUG; buy or sell through brokers) aims to track the Center for Research in Security Prices (CRSP) U.S. Large Cap Growth Index, a broadly diversified index that mainly consists of stocks of large U.S. companies. The fund’s MER is just 0.09%.

The $38.0-billion Vanguard Growth ETF’s top holdings are Apple, Google, Coca-Cola, Philip Morris International, Oracle, Schlumberger, Comcast, Qualcomm, Gilead Sciences and Walt Disney Co.

The fund’s breakdown by industry is as follows: Technology (24.1%), Consumer Services (19.7%), Financials (12.4%), Industrials (12.1%), Health Care (11.0%), Consumer Goods (10.5%), Oil and Gas (7.9%), Materials (1.7%), Utilities (0.4%) and Telecommunication Services (0.2%).

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BANK OF NOVA SCOTIA $70.50 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $85.4 billion; TSINetwork Rating: Above Average; Dividend yield: 3.6%, www.scotiabank.com) has agreed to buy 20% of the credit card division of Canadian Tire Corp. (Toronto symbol CTC.A and a recommendation of The Successful Investor).

This business is Canada’s eighth-largest credit card issuer, with 1.8 million clients and $4.4 billion in outstanding loans. Its cardholders spend $1.2 billion annually.

The bank will pay $500 million for this stake, and Canadian Tire has an option to sell an additional 29% to Bank of Nova Scotia over the next 10 years.

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VERESEN $17.50 (Toronto symbol VSN; Shares outstanding: 219.7 million; Market cap: $3.8 billion; TSINetwork Rating: Average; Dividend yield: 5.7%) 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 its operations, the company is expanding into power generation, including hydroelectric facilities, wind farms and natural gas-fired plants.

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PEMBINA PIPELINE $44.90 (Toronto symbol PPL; Shares outstanding: 323.0 million; Market cap: $14.5 billion; TSINetwork Rating: Average; Dividend yield: 3.9%; 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 for $3.2 billion in 2012. Provident extracts, transports and stores natural gas liquids (NGLs).

This acquisition is now paying off: in the quarter ended March 31, 2014, Pembina’s cash flow rose 30.6%, to $264.0 million from $202.0 million a year earlier. Cash flow per share gained 22.1%, to $0.83 from $0.68, on more shares outstanding. Pipeline expansions and strong profit margins at Provident were the main reasons for the gains.

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GLOBAL X COPPER MINERS ETF $10.03 (New York symbol COPX; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Copper Miners Index, which includes 20 to 40 international companies that mine, refine or explore for copper. Germany-based Structured Solutions AG created this index.

Canadian firms make up 41.4% of the fund’s holdings. It also includes companies based in Australia (14.8%), Poland (4.5%), Peru (5.1%) and Mexico (5.0%). Global X Copper Miners ETF’s MER is 0.65%.

Its top holdings are Panaust Ltd. at 6.0%; Vedanta Resources, 5.4%; Oz Minerals, 5.2%; First Quantum Minerals, 5.0%; Imperial Metals, 4.9%; Hudbay Minerals, 4.9%; Kazakhmys, 4.9%; Lundin Mining, 4.9%; Grupo Mexico, 4.7%; Freeport Copper, 4.6%; and Glencore International, 4.6%.

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GLOBAL X SILVER MINERS ETF $11.36 (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index.

This index includes 26 international companies that mine, refine or explore for silver. Germany-based Structured Solutions AG developed the Global X Silver Miners Index.

Canadian companies make up 48.9% of the fund’s holdings, but it also includes miners in the U.S. (13.2%) and Mexico (12.0%). Its MER is 0.65%.

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ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $10.60 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index.

This index is made up of 38 gold stocks from Canada and around the world. The iShares S&P/TSX Global Gold Index Fund’s MER is 0.60%. It began trading on March 23, 2001.

The fund’s top holdings are Goldcorp at 15.8%; Barrick Gold, 15.6%; Newmont Mining, 9.4%; Franco Nevada, 5.6%; Randgold Resources (ADR), 5.6%; AngloGold Ashanti (ADR), 5.3%; Yamana Gold, 4.6%; Agnico-Eagle Mines, 4.4%; Kinross, 3.6%; Eldorado Gold, 3.4%; Royal Gold, 3.4%; Osisko Mining, 2.7%; Gold Fields (ADR), 2.3%; and New Gold, 2.2%.

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ISHARES CDN REIT SECTOR INDEX FUND $16.48 (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. The weight of each REIT is limited to 25% of the ETF’s value.

iShares CDN REIT’s expenses are 0.60% of its assets. The fund yields 4.9%.

The ETF’s largest holding is RioCan REIT at 19.9%, followed by H&R REIT (15.1%), Canadian REIT (7.5%), Dream Office REIT (7.2%), Calloway REIT (6.6%), Canadian Apartment REIT (6.0%), Boardwalk REIT (6.0%), Allied Properties REIT (5.8%), Cominar REIT (5.3%), Artis REIT (4.8%), Chartwell REIT (4.5%), Granite REIT (4.5%), Crombie REIT (2.3%), Dream Global REIT (2.2%) and Northern Property REIT (2.1%).

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H&R REIT $23.38 (Toronto symbol HR.UN; Units outstanding: 271.4 million; Market cap: $6.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.8%; www.hr-reit.com) owns stakes in 41 office buildings, 112 industrial properties and 168 shopping malls across Canada. The trust has a 97.9% occupancy rate.

In March 2013, H&R finished building the Bow, a $1.33-billion, two-million-square-foot office complex in Calgary. Encana Corp. has leased the entire building for 25 years.

In April 2013, H&R completed the purchase of 27 properties from Primaris REIT for $3.1 billion. These assets include the 567,000-square-foot Dufferin Mall in Toronto’s west end.

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RIOCAN REAL ESTATE INVESTMENT TRUST $27.64 (Toronto symbol REI.UN; Units outstanding: 304.4 million; Market cap: $8.4 billion; TSINetwork Rating: Average; Dividend yield: 5.1%; www.riocan.com) is Canada’s largest real estate
investment trust (REIT), with interests in 340 shopping malls containing over 82 million square feet of leasable area. That total includes 47 U.S. malls with over 13 million square feet.

In the three months ended March 31, 2014, RioCan’s revenue increased 6.4%, to $299 million from $281 million a year earlier. Cash flow per unit rose 2.4%, to $0.42 from $0.41, on more units outstanding.

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TORSTAR $7.86 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $629.2 million; TSINetwork Rating: Average; Dividend yield: 6.7%; www.torstar.com) is up over 20% since early May, when it agreed to sell its Harlequin book-publishing subsidiary to News Corporation (symbol NWSA on New York), the parent company of publishing firm HarperCollins.

We’ve long pointed out that Torstar had a great hidden asset in Harlequin, especially in light of the romance publisher’s successful expansion into e-books.

In 2013, Harlequin supplied 29% of Torstar’s revenue and 32% of its earnings. The company will get $455 million from the sale, which should close by September 30, 2014.

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TELUS $42.29 (Toronto symbol T; Shares outstanding: 619.0 million; Market cap: $26.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.6%; www.telus.com) gets 55% of its revenue from its 7.8 million wireless subscribers across Canada. It also has 3.3 million phone customers, 1.4 million high-speed Internet users and 815,000 TV subscribers.

In the three months ended March 31, 2014, Telus’s earnings per share rose 8.9%, to $0.61 from $0.56 a year earlier. Revenue increased 5.0%, to $2.90 billion from $2.76 billion.

Wireless revenue rose 5.6%, thanks to new wireless subscribers and rising use of smartphones, which generate higher fees than regular cellphones. Revenue gained 4.4% in the the wireline (land line) division, where an increase in Telus TV and high-speed Internet subscribers more than offset customers cancelling land lines and switching to wireless devices.

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AGRIUM INC. (Toronto symbol AGU; www.agrium.com) continues to benefit from its plan to expand its retail operations, which sell seed, fertilizer and other products to farmers. Steady sales from the company’s stores help offset its exposure to volatile fertilizer prices. Agrium’s 1,400 outlets in North America, South America and Australia now supply 75% of its sales and 40% of its earnings. The remaining 25% of sales and 60% of earnings mainly comes from making fertilizers from natural gas. Agrium also operates potash and phosphate fertilizer mines. Sales jumped 82.8%, from $9.1 billion in 2009 to $16.7 billion in 2012 (all amounts except share price and market cap in U.S. dollars), thanks to rising fertilizer prices and acquisitions of retail stores, particularly in Australia. However, lower fertilizer prices cut its 2013 sales to $15.7 billion. Earnings were $7.31 a share (or $1.1 billion) in 2013....

MAPLE LEAF FOODS INC. $19 (www.mapleleaffoods.com) owned 90.0% of Canada Bread (see above), so it received $1.66 billion for its shares. That’s equal to 64% of Maple Leaf’s $2.6-billion market cap....

ENCANA CORP. $26 (www.encana.com) has completed its plan to sell shares of subsidiary PrairieSky Royalty Ltd. (Toronto symbol PSK) to the public. PrairieSky owns the oil and natural gas rights to 5.2 million acres in Alberta....

AGRIUM INC. $99 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 144.0 million; Market cap: $14.3 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.3%; TSINetwork Rating: Average; www.agrium.com) continues to benefit from its plan to expand its retail operations, which sell seed, fertilizer and other products to farmers. Steady sales from the company’s stores help offset its exposure to volatile fertilizer prices.

Agrium’s 1,400 outlets in North America, South America and Australia now supply 75% of its sales and 40% of its earnings. The remaining 25% of sales and 60% of earnings mainly comes from making fertilizers from natural gas. Agrium also operates potash and phosphate fertilizer mines.

Sales, earnings up sharply

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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) earned $36.8 million in its fiscal 2014 second quarter, which ended April 30, 2014. That’s up 12.9% from $32.6 million a year earlier. Earnings per share rose 11.9%, to $0.47 from $0.42, on more shares outstanding.

These gains are mainly due to cost savings from a restructuring plan that mostly consisted of job cuts. Revenue fell 3.8% in the latest quarter, to $498.2 million from $517.8 million, as the slow economy hurt advertising sales at the company’s newspapers and flyer-printing businesses.

These results do not include Missouri-based Capri Packaging, which Transcontinental bought for $146.1 million in May 2014. Capri, which makes plastic food containers, should add $72 million U.S. to Transcontinental’s annual revenue.

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NORDION INC. $14 (Toronto symbol NDN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 61.9 million; Market cap: $866.6 million; Price-to-sales ratio: 2.6; No dividends paid since July 2012; TSINetwork Rating: Extra Risk; www.nordion.com) has accepted a $13.00 U.S.-a-share friendly bid from Sterigenics, a privately held Illinois firm that sterilizes surgical tools, drug ingredients and other materials.



Sterigenics expects to complete the takeover in the second half of 2014....