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PASON SYSTEMS $30.37 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 82.4 million; Market cap: $2.5 billion; Dividend yield: 2.0%) is trading near all-time highs as it continues to gain from the boom in U.S. shale oil and gas drilling.

Pason rents equipment for monitoring and managing oil and gas rigs. It also sells communication technology, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas producers and drilling contractors throughout Canada, the U.S., Mexico, Argentina and Australia.

In the three months ended March 31, 2014, the company’s revenue rose 12.7%, to $123.2 million from $109.3 million a year earlier. Higher sales in the U.S., Australia and Canada offset slower drilling activity in Mexico and a significant devaluation of the Argentine currency.

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AIMIA INC. $19.13 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 173.4 million; Market cap: $3.2 billion; Dividend yield: 3.8%) is buying 25% of Travel Club, Spain’s largest loyalty program.

Travel Club, which generated 40 million euros of revenue in 2013, has 6 million members and 30 business partners. Aimia plans to use its international experience to expand Travel Club’s member base and attract partners from new areas, including finance, fashion, insurance and the telecom industry.

The company has lots of experience with European loyalty programs. For example, it built Nectar, the U.K.’s leading coalition loyalty program, from a start-up into a multinational business in just 10 years. Today, Nectar has 19 million members, which amounts to more than 50% of U.K. households. Aimia has also built a significant presence in the Italian customer-loyalty market through Nectar Italia.

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DELPHI ENERGY $3.34 (Toronto symbol DEE; TSINetwork Rating: Speculative) (403-265-6171; www.delphienergy.ca; Shares outstanding: 154.4 million; Market cap: $529.7 million; No dividends paid) develops, produces and explores for oil and natural gas. About 72% of its output is gas. The remaining 28% is oil.

In the three months ended December 31, 2013, the company’s production rose 24.3%, to 8,988 barrels of oil equivalent a day (including gas) from 7,229 barrels a year earlier.

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TRILOGY ENERGY CORP. $28.59 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290-2900; www.trilogyenergy.com; Shares outstanding: 99.5 million; Market cap: $3.6 billion; Dividend yield: 1.5%) owns oil and gas properties in central Alberta’s Kaybob and Grande Prairie areas. About 61% of Trilogy’s production is natural gas. The remaining 39% is oil.

In the three months ended March 31, 2014, Trilogy produced 33,135 barrels of oil equivalent a day (including gas), down 8.2% from 36,119 barrels a year earlier.

Cash flow per share fell 4.5%, to $0.64 from $0.67, as higher oil and gas prices partly offset the production drop.

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WYNDHAM WORLDWIDE $72.29 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973-753-6000; www.wyndhamworldwide.com; Shares outstanding: 127.3 million; Market cap: $9.3 billion; Dividend yield: 1.9%) reported revenue of $1.19 billion in the three months ended March 31, 2014. That was up 5.3% from $1.13 billion a year earlier.

Before one-time items, earnings rose 9.9%, to $0.78 a share from $0.71.

To further boost its revenue, Wyndham has invested heavily in its online booking systems. It is also expanding in fast-growing markets like Asia and Latin America. The company’s outlook is positive, but the stock now trades at a high 19.1 times Wyndham’s latest 12 months of earnings.

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RUBY TUESDAY, INC. $7.72 (New York symbol RT; TSINetwork Rating: Speculative) (865-379-5700; www.rubytuesday.com; Shares outstanding: 61.4 million; Market cap: $502.6 million; No dividends paid) owns 679 casual dining restaurants in the U.S., with franchisees operating 31 in the U.S. and 45 overseas. The company also runs 20 Lime Fresh restaurants and franchises eight (six domestic and two international).

In the three months ended March 4, 2014, Ruby Tuesday’s sales fell 3.8%, to $295.6 million from $307.4 million a year earlier. Same-restaurant sales declined 1.9%. Continued weak consumer spending was the main reason for the decline. As well, the company closed less-profitable restaurants in the quarter, and competition remains intense in the casual-dining business.

Excluding one-time items, Ruby Tuesday lost $4.5 million, or $0.07 a share, compared to a year-earlier profit of $6.3 million, or $0.10. That beat the consensus estimate of an $0.08-a-share loss.

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CHIPOTLE MEXICAN GRILL $504.32 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.1 million; Market cap: $15.7 billion; No dividends paid) is a Denver-based Mexican restaurant chain. It charges slightly higher prices than fast food companies, but it offers better quality food, including naturally raised meat, and superior decor and service.

In the three months ended March 31, 2014, Chipotle’s sales rose 24.4%, to $904.2 million from $726.8 million a year earlier. The company’s restaurants attracted more customers during the quarter, which pushed up same-restaurant sales by 13.4%. Chipotle also opened 44 new outlets and now has a total of more than 1,600. In all of 2014, it aims to open 180 to 195 locations.

Earnings gained 8.5%, to $83.1 million, or $2.67 a share, from $76.6 million, or $2.47.

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>YAMANA GOLD $8.22 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 753.3 million; Market cap: $5.9 billion; Dividend yield: 2.0%) has succeeded in its joint $3.9-billion bid with Agnico Eagle Mines for Osisko Mining. Rival bidder Goldcorp has withdrawn its offer. Agnico Eagle and Yamana will now each own half of Osisko’s assets, including the Canadian Malartic gold mine in Quebec.

The acquisition also lets Yamana diversify beyond South America and Mexico, where it has seven mines. It should also boost the company’s per-share cash flow.

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IMPERIAL METALS $14.41 (Toronto symbol III; TSINetwork Rating: Speculative) (604-669-8959; www.imperialmetals.com; Shares outstanding: 74.9 million; Market cap: $1.1 billion; No dividends paid) is a Vancouver-based firm that produces and explores for base and precious metals.

Imperial’s producing assets include two B.C. mines: 100%-owned Mount Polley (copper and gold) and 50% of Huckleberry (copper and molybdenum). Japan’s Mitsubishi Materials holds 31.1% of Huckleberry, and Furukawa Co., Dowa Holdings and Marubeni Corp. own 6.3% each.

Imperial restarted Mount Polley in 2005 and continues to explore around the deposit to increase the mine’s reserves and lengthen its life. The company expects Mount Polley to produce until mid-2023.

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IAMGOLD $3.71 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 376.6 million; Market cap: $1.4 billion; No dividends paid) owns 41% of the Sadiola mine and 40% of the Yatela mine, both located in Mali; 90% of its Essakane gold mine in Burkina Faso; 100% of the Doyon mine in Quebec; and 95% of the Rosebel mine in Suriname, South America.

In addition, IAMGold has a 1% royalty interest in the Diavik diamond mine in the Northwest Territories. It also owns the Niobec niobium mine in Quebec. When used as an additive, niobium makes steel stronger, more heat-resistant and easier to weld.

In the three months ended March 31, 2014, IAMGold’s revenue fell 8.5%, to $279.3 million from $305.3 million a year earlier. Cash flow per share dropped to $0.17 from $0.31. The declines were mostly due to 21.2% lower gold prices and an 8.5% production decrease.

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MITEL NETWORKS $12.03 (Toronto symbol MNW; TSINetwork Rating: Extra Risk) (613-592-2122; www.mitel.ca; Shares outstanding: 99.9 million; Market cap: $1.2 billion; No dividends paid) is now #1 in business communications products in Europe, and #3 in North American behind Avaya and Cisco, after its January 31, 2014 friendly takeover of Aastra Technologies.

Aastra, a Stock Pickers Digest recommendation, mostly makes business telephone equipment. Mitel operates in the same market as Aastra, but is focused more on software, including call centre and video-conferencing products. It is increasingly moving from selling programs that are installed at its customers’ offices to a cloud model, where it keeps its software on its own servers and sells it by subscription.

In the three months ended March 31, 2014, Mitel’s revenue rose 68.8%, to $241.5 million from $143.1 million a year ago (all figures except share price in U.S. dollars). Most of the increase came from Aastra.

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CHESAPEAKE ENERGY $29.23 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chkenergy.com; Shares outstanding: 666.2 million; Market cap: $20.0 billion; Dividend yield: 1.2%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 84% gas and 16% oil.

Chesapeake’s shares have nearly doubled since mid-2012, when activist investor Carl Icahn acquired 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.

As part of its restructuring, Chesapeake sold $4 billion worth of properties in 2013, which let it pay down debt and focus on areas with strong growth potential. It has also cut its costs and is now aiming for a better balance between oil and gas production.

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YAMANA GOLD $9.18 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 753.3 million; Market cap: $7.1 billion; Dividend yield: 1.7%) recently teamed up with Osisko Mining (symbol OSK on Toronto) to thwart a hostile takeover of Osisko by Goldcorp (symbol G).

Yamana bid $1.4 billion in cash and shares for 50% of Osisko, which owns the Canadian Malartic mine in Quebec. Canadian Malartic produced 475,277 ounces of gold in 2013.

However, Goldcorp has now raised its bid to $3.6 billion in cash and shares for all of Osisko. Yamana’s offer, combined with contributions from two of Canada’s largest pension funds in the form of a loan and the purchase of a 37,500-ounce-per-year gold stream, valued Osisko at $3.4 billion.

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THOMSON REUTERS CORP. (Toronto symbol TRI; www.thomsonreuters.com) gets 55% of its revenue by selling news and information to professionals in the banking industry. The remaining 45% comes from providing specialized information products to clients in the legal, accounting and scientific research fields. Thomson earned $137 million, or $0.16 a share, in 2013 (all amounts except share price and market cap in U.S. dollars). That’s down sharply from $2.0 billion, or $2.39 a share, in 2012....

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 advice on stock market trading and other investment topics that will help you develop a successful approach to investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “The saying ‘Sell in May and go away’ is based on an approach to the stock market that works only sporadically and could actually cost you money if you go along with it.”...

We’ve had great success with companies spun off from larger parent firms in the past few years. That’s mainly because spinoffs let both companies focus on their already well-established businesses. As well, a parent will only hand out a subsidiary’s shares to its own investors if it’s confident the spinoff will benefit both companies. Shares of this food producer we cover in Wall Street Stock Forecaster have jumped since it was spun off to become a separate firm. Here is our analysis of its future prospects....

AURICO GOLD (Toronto symbol AUQ; www.auricogold.com) operates the El Chanate gold mine in Mexico, which produced 71,864 ounces in 2013. The company’s Young-Davidson gold mine in Northern Ontario reached full production in 2013, with total output of 120,738 ounces. The project’s output should rise to over 152,000 ounces this year....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice and stock picks 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. This week an Inner Circle member asked us about a Canadian stock whose products came into sharper focus following the disappearance of Malaysia Airlines Flight MH370. Flyht Aerospace Solutions makes a number of products, but the two attracting the most attention are devices that collect and stream flight data and could have shed light on the fate of the Malaysian airliner as it disappeared. Pat examines the company’s business and assesses its prospects for growth in a highly competitive market. ...

POTASH CORP. OF SASKATCHEWAN $37 (www.potashcorp .com) exports potash fertilizer to customers outside North America through Canpotex, a marketing joint venture. Potash Corp., Agrium (see below) and Mosaic Co. (New York symbol MOS) each own a third of Canpotex....

CENOVUS ENERGY INC. $32 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 756.5 million; Market cap: $24.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.3%; TSINetwork Rating: Average; www.cenovus.com) gets about 40% of its output from its oil sands projects in Alberta. Conventional oil and natural gas wells supply the other 60%.

U.S.-based ConocoPhillips (New York symbol COP) owns 50% of Cenovus’s main Foster Creek and Christina Lake oil sands projects in Alberta. These properties produce heavy bitumen, which Cenovus ships to its 50%-owned refineries in Illinois and Texas. Phillips 66 (New York symbol PSX) owns the other 50% of these refineries. In 2013, refining accounted for 66% of Cenovus’s revenue and 40% of its earnings.


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DUNDEE CORP. $17 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 54.1 million; Market cap: $919.7 million; Price-to-sales ratio: 2.4; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) owns businesses in the wealth management, real estate, natural resource and agriculture industries.

The company lost $92.6 million, or $1.88 a share, in 2013. That’s a big drop from the $25.2 million, or $0.29 a share, it earned in 2012. Revenue fell 6.3%, to $200.7 million from $214.2 million.

The declines are mainly because weak commodity prices hurt the contribution of Dundee’s resource holdings. As well, fewer firms issued shares in 2013, which hurt profits at its Dundee Securities brokerage firm. The company is also spending more to expand its agriculture businesses, which further depressed results.
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TRANSCANADA CORP. $51 (Toronto symbol TRP; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 707.6 million; Market cap: $36.1 billion; Price-to-sales ratio: 3.8; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.transcanada.com) has received new long-term commitments from U.S. natural gas producers for its ANR pipeline system. Trans- Canada has now sold all of this line’s capacity.

This strong demand should prompt Trans- Canada to expand the ANR line over the next few years. That would let it handle rising production at the Utica and Marcellus shale gas fields in New York State and Pennsylvania.

TransCanada is a buy....

CANADIAN PACIFIC RAILWAY LTD. $162 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 175.7 million; Market cap: $28.5 billion; Priceto- sales ratio: 4.6; Dividend yield: 0.9%; TSINetwork Rating: Above Average; www.cpr.ca) will repurchase up to 1.3 million of its shares from a private seller at a discount to the market price.

This move is part of the company’s plan to buy back up to 5.3 million of its common shares, or roughly 3% of the total outstanding, by March 16, 2015. Share buybacks raise earnings per share and other per-share calculations, and give the remaining shareholders a larger stake in the company.

CP Rail is a buy....

CANADA BREAD CO. LTD. $73 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.9 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.canadabread.ca) is Canada’s second-largest producer of fresh and frozen baked goods, after Weston Bakery.

Shareholders recently approved a $72.00-a-share takeover offer from Mexican bakery giant Grupo Bimbo SAB. Competition regulators in Canada and the U.S. have also approved the deal.

Canada Bread’s shares are trading slightly higher than the bid. That’s because the deal lets the company keep paying quarterly dividends of up to $0.75 a share until Grupo Bimbo completes the takeover, probably by June 30, 2014. Before the deal, Canada Bread paid quarterly dividends of $0.50 a share.
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BANK OF MONTREAL $75 (Toronto symbol BMO; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 644.7 million; Market cap: $48.4 billion; Price-to-sales ratio: 2.3; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.bmo.com) earned $787 million from its U.S. banking operations (or 27% of the total) in the year ended October 31, 2013.

The bank continues to integrate Milwaukee-based Marshall & Ilsley, which it bought in 2011. The move doubled the size of its U.S. retail banking business. Bank of Montreal has already cut this division’s annual costs by $400 million, which should help it meet its goal of raising this business’s earnings to $1 billion in 2015.

Bank of Montreal is a buy....