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DEVON ENERGY CORP. $63.46 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235-3611; www.dvn.com; Shares outstanding: 406.0 million; Market cap: $25.9 billion; Dividend yield: 1.5%) continues to sell assets to focus on its fast-growing U.S. properties.

Devon is selling some of its Canadian properties to Canadian Natural Resources (symbol CNQ on Toronto) for $2.8 billion.

The company will use the cash to fund last year’s $6-billion purchase of oilproducing properties in Texas’s Eagle Ford shale formation. It also plans to further expand its U.S. operations.
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ZARGON OIL & GAS $8.61 (Toronto symbol ZAR; TSINetwork Rating: Speculative) (403-264-9992; www.zargon.ca; Shares outstanding: 30.1 million; Market cap: $259.1 million; Dividend yield: 8.4%) produces natural gas and oil in Alberta, Manitoba, Saskatchewan and North Dakota. Its production is 64% oil and 36% gas.

In the quarter ended December 31, 2013, Zargon produced 7,276 barrels of oil equivalent a day, down 5.8% from 7,634 a year earlier. That’s because it sold some less-important properties and cut back on natural gas drilling in response to lower gas prices.

That lower output more than offset slightly higher oil and gas prices in the latest quarter, dropping the company’s cash flow per share by 27.3%, to $0.40 from $0.55. Zargon expects cash flow of $1.66 a share in 2014. The stock trades at 5.2 times that estimate.
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BIRCHCLIFF ENERGY $10.35 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Units outstanding: 144.0 million; Market cap: $1.5 billion; No dividends paid) develops, produces and explores for oil and natural gas, mainly in the Peace River Arch area near the Alberta/B.C. border. About 81% of its output is gas. The remaining 19% is oil.

In the three months ended December 31, 2013, Birchcliff’s production rose 6.5%, to 28,391 barrels of oil equivalent per day (including gas) from 26,655 barrels a year earlier. Cash flow per share gained 25.0%, to $0.35 from $0.28, on the increased production and higher gas prices.

In 2012, Birchcliff completed Phase III of its gas plant expansion in Pouce Coupe, Alberta. This project doubled the facility’s capacity and is letting the company bring the additional gas it is producing to market.
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DUNDEE REIT $28.39 (Toronto symbol D.UN; TSINetwork Rating: Extra Risk) (416- 365-3535; www.dundeereit.com; Units outstanding: 103.4 million; Market cap: $3.0 billion; Dividend yield: 7.9%) owns and manages 24.6 million square feet of office and retail space.

In the quarter ended December 31, 2013, Dundee REIT’s revenue rose 8.6%, to $208.4 million from $192.0 million a year earlier. The trust bought $592.5 million worth of new buildings comprising 1.7 million feet of leasable area. That was the reason for most of the revenue increase.

Cash flow gained 15.4%, to $67.0 million from $58.1 million. However, Dundee issued new units to pay for the acquired properties, so its cash flow per unit rose 8.8%, to $0.62 from $0.57, on more units outstanding.
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THE CHURCHILL CORP. $10.47 (Toronto symbol CUQ; TSINetwork Rating: Speculative) (780-454-3667; www.churchillcorporation.com; Shares outstanding: 24.9 million; Market cap: $260.5 million; Dividend yield: 4.6%) provides building-construction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to government and private sector clients, mainly in Western Canada.

In the three months ended December 31, 2013, Churchill earned $3.3 million, or $0.13 a share. That’s a big improvement from a loss of $62.8 million, or $2.56 a share, a year earlier. The year-ago results include a one-time writedown of $64.6 million.

Revenue increased 2.5%, to $297.0 million from $289.9 million. Churchill has worked through most of the less-profitable contracts it took on as part of its acquisitions, or that it negotiated when its markets were more competitive in 2009 and 2010.
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RUSSEL METALS $30.34 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 61.0 million; Market cap: $1.9 billion; Dividend yield: 4.4%) is one of North America’s largest metal distributors. It serves 39,000 clients at 53 locations in Canada and 12 in the U.S.

In the quarter ended December 31, 2013, Russel’s revenue rose 5.9%, to $811.1 million from $765.9 million a year earlier. Sales at the company’s metalservices business rose 4%, as higher demand offset lower selling prices. The energy tubular products division, which supplies pipes for oil and gas exploration and development, saw its revenue rise 12%.

Earnings gained 13.4%, to $22.8 million from $20.1 million. Per-share earnings rose 8.8%, to $0.37 from $0.34, on more shares outstanding.
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SHERRITT INTERNATIONAL $3.64 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 297.3 million; Market cap: $1.1 billion; Yield: 1.1%) has cut its dividend to $0.01 a share from $0.043. It now yields 1.1%.

In the quarter ended December 31, 2013, Sherritt’s revenue fell 16.7%, to $108.6 million from $130.3 million a year earlier. It lost $0.13 a share, compared to a loss of $0.01.

Sherritt’s long-term debt is $2.1 billion, or a high 2.3 times its market cap. But after the upcoming sale of its coal business, it will hold cash of $1.5 billion, or $5.05 a share.
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YAMANA GOLD $10.77 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.- yamana.com; Shares outstanding: 753.3 million; Market cap: $8.1 billion; Dividend yield: 1.5%) owns eight operating gold mines in Mexico, Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina and has a number of other properties in advanced stages of development.

In the three months ended December 31, 2013, Yamana’s revenue fell 33.2%, to $420.7 million from $629.5 million a year earlier (all figures except share price and market cap in U.S. dollars).

Gold production declined 6.0%, to 303,768 ounces from 322,990. Prices for gold, copper and silver also fell. (Copper and silver are significant by-products of the company’s gold mining.) Yamana’s cash flow per share declined 45.0%, to $0.22 from $0.40.
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NEW GOLD $6.24 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold- .com; Shares outstanding: 503.3 million; Market cap: $3.1 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 December 31, 2013, New Gold’s cash flow per share fell 17.4%, to $0.19 from $0.23 a year earlier. Prices of gold, copper and silver fell, as did production from Cerro San Pedro, which is scheduled to close next year.
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LEON’S FURNITURE $15.75 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243- 7880; www.leons.ca; Shares outstanding: 70.6 million; Market cap: $1.1 billion; Div. yield: 2.5%) has steadily opened new stores, growing from 27 stores in 2003, to 75 today.

But the company more than quadrupled in size overnight with the March 28, 2013 purchase of its main rival, The Brick, for $700 million. The Brick operates 234 outlets across Canada. Leon’s and The Brick will continue to operate as separate chains.

As a result of the acquisition, Leon’s sales jumped to $523.0 million in the three months ended December 31, 2013, from $188.5 million a year earlier. Earnings rose 61.5%, to $26.0 million, or $0.37 a share, from $16.1 million, or $0.23.
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ALIMENTATION COUCHE-TARD $91.36 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $17.3 billion; Dividend yield: 0.4%) grew from just 630 stores in Quebec in 1998 to 1,612 in 1999, mostly through the purchase of Silcorp Ltd. and its 980 Mac’s and Becker’s stores in Ontario and western Canada. Couche-Tard then continued to expand through profitable acquisitions, including buying 2,290 stores in the U.S. in 2003 from ConocoPhillips.

The company made another big acquisition in June 2012 with the $2.7-billion purchase of Norway’s Statoil Fuel & Retail chain of gas stations (all figures except share price in U.S. dollars).

In Europe, Couche-Tard now operates 2,263 outlets across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic states (Estonia, Latvia and Lithuania) and Russia. That’s in addition to its 6,221 stores throughout North America operating under the Couche- Tard and Circle K banners.
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Pat McKeough responds to many requests from members of his Inner Circle for specific advice and 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 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....

Natural gas prices rebounded recently after almost three years of depressed prices. In those years, warm winters cut into gas used for heating, and that’s a major part of total gas use. As a result, gas in storage grew and prices stagnated. A glut of shale gas due to improved drilling technology also held prices down....

Trying to buy a stock you like at a lower price can actually expose you to unnecessary risk. For a number of investors, there are two steps to buying a stock.

POWER CORP. $29.88 (Toronto symbol POW; Shares outstanding: 411.4 million; Market cap: $12.2 billion; TSINetwork Rating: Above Average; Div. yield: 3.9%; www.powercorporation.com) is a diversified holding company. It holds its financial assets through 65.8%-owned Power Financial.

These financial assets include 68.1% of Great- West Lifeco, one of Canada’s largest life insurers (see column on page 9), and 58.7% of IGM Financial, a leading Canadian mutual fund provider.

Power Financial also owns 50% of holding company Parjointco, which holds 55.6% of Switzerland- listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), Suez Environnement (energy, water and waste services) and Lafarge (cement and building materials). Power Corp. also has investments in Asia.
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GLOBAL X COPPER MINERS ETF $8.80 (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 41.9% of the fund’s holdings. It also includes companies based in Australia (14.2%), Poland (4.7%), Peru (4.9%) and Mexico (5.0%). Global X Copper Miners ETF’s MER is 0.65%.

Its top holdings are Imperial Metals at 6.5%; Turquoise Hill Resources, 5.7%; Grupo Mexico, 5.1%; Lundin Mining, 5.1%; Glencore International, 5.1%; First Quantum Minerals, 5.1%; Hudbay Minerals, 5.0%; Capstone Mining, 5.0%; Antofagasta plc, 5.0%; and Southern Copper, 5.0%.
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GLOBAL X SILVER MINERS ETF $12.20 (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index.

This index includes 30 international companies that mine, refine or explore for silver. Germany-based Structured Solutions AG developed the Global X Silver Miners Index.

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ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $11.19 (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 37 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 Barrick Gold at 17.9%; Goldcorp, 16.1%; Newmont Mining, 8.6%; Franco Nevada, 5.7%; Yamana Gold, 5.6%; Randgold Resources (ADR), 5.1%; AngloGold Ashanti (ADR), 4.7%; Agnico-Eagle Mines, 4.3%; Kinross, 4.2%; Eldorado Gold, 3.6%; Royal Gold, 2.9%; New Gold, 2.3%, Gold Fields (ADR), 2.1% and Osisko Mining, 2.1%.
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TRANSCANADA CORP. $47.82 (Toronto symbol TRP; Shares outstanding: 707.0 million; Market cap: $33.7 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.transcanada.com) has agreed to sell its Cancarb business to Japan’s Tokai Carbon Co.

Alberta-based Cancarb makes thermal carbon black from natural gas. It sells this product to carmakers and other industrial users, who use it as an ingredient in high-grade rubber and ceramics. Cancarb also uses waste heat from its manufacturing operations to generate electricity, which its sells to the local power grid.xzc Tokai will pay TransCanada $190 million when the deal closes in the next few weeks. That’s equal to 43% of the $447 million it earned in the quarter ended September 30, 2013.

TransCanada is a buy....

ALGONQUIN POWER & UTILITIES CORP. $7.24 (Toronto symbol AQN; Shares outstanding: 206.3 million; Market cap: $1.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.7%; www.algonquinpower.com) has nearly tripled in size over the last two years through acquisitions.

Algonquin bought four companies in 2012 and another five in 2013. These moves included a $140.7-million U.S. deal for a natural gas distributor in Georgia with 64,000 clients.

The company’s regulated utility businesses now provide water, electricity and natural gas to over 470,000 customers, up sharply from 120,000 a year ago. In addition, Algonquin’s hydroelectric, thermal energy and wind facilities generate 1,100 megawatts of power, up from 460.
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Algonquin Power & Utilities is still a buy. INNERGEX RENEWABLE ENERGY $10.04 (Toronto symbol INE; Shares outstanding: 95.7 million; Market cap: $961.3 million; TSINetwork Rating: Extra Risk; Dividend yield 5.8%; www.innergex.com) operates 23 hydroelectric facilities, five wind farms and one solar power plant in Quebec, Ontario, B.C. and Idaho. Innergex gets 73% of its power from hydroelectric facilities. Wind farms supply 26% and solar generates 1%.

In contrast to Algonquin, Innergex is growing slowly, mostly by building its own hydroelectric and wind plants, rather than through acquisitions. Right now, it is developing or building eight projects.

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CANADIAN PACIFIC RAILWAY $164.15 (Toronto symbol CP; Shares outstanding: 175.2 million; Market cap: $28.8 billion; TSINetwork Rating: Average; Dividend yield: 0.9%; www.cpr.ca) transports freight between Montreal and Vancouver and connects with hubs in the U.S. Midwest and northeast.

CP continues to benefit from its plan to improve its efficiency with new locomotives, better tracks and software that optimizes train loads and speeds. That’s helping it deal with colder-than-normal winter weather.

In the three months ended December 31, 2013, CP’s earnings per share rose 49.2%, to $1.91 from $1.28. Revenue gained 7.0%, to a record $1.6 billion from $1.5 billion.
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VANGUARD FTSE EMERGING MARKETS ETF $37.39 (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 0.18%.

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 telecommunications)

The $62.4-billion fund’s breakdown by country is as follows: China (22.1%), Taiwan (13.6%), Brazil (13.2%), South Africa (9.5%), India (9.3%), Russia (7.1%), Mexico (5.8%), Malaysia (4.9%), Indonesia (2.5%), Thailand (2.5%), Chile (1.9%), Poland (1.7%), Turkey (1.7%) and others (4.2%).
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VANGUARD GROWTH ETF $88.97 (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 0.10%.

The $37.5-billion Vanguard Growth ETF’s top holdings are Apple, IBM, Google, Coca-Cola, Philip Morris International, Oracle, Amazon.com, Comcast, Qualcomm and Walt Disney Co.

The fund’s breakdown by industry is as follows: Technology (25.6%), Consumer Services (20.3%), Industrials (12.1%), Financials (11.9%), Consumer Goods (10.6%), Health Care (10.0%), Oil and Gas (7.1%), Materials (1.6%), Telecommunication Services (0.4%) and Utilities (0.4%).
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ISHARES CDN REIT SECTOR INDEX FUND $15.52 (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.zxc iShares CDN REIT’s expenses are 0.60% of its assets....