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APPLE INC. $501 (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 892.4 million; Market cap: $447.1 billion; Price-to-sales ratio: 2.8; Dividend yield: 2.4%; TSINetwork Rating: Average; www.apple.com) continues to profit from its hugely popular mobile devices: the iPhone smartphone and the iPad tablet computer. These products account for 75% of its sales. The remaining 25% comes from its Mac computers, iPod music players and revenue from its iTunes online store.

In its 2014 first quarter, which ended December 28, 2013, Apple’s sales rose 5.7%, to $57.6 billion from $54.5 billion a year earlier. The company sold a record 51.0 million iPhones in the latest quarter, up 6.8%. iPad sales gained 13.9%, to a record 26.0 million units. Apple also sold 19.1% more Mac computers, but iPod sales fell 52.3% as users continue to upgrade to iPhones.

However, Apple is paying more for components after it upgraded its iPhones and iPads in 2013. As a result, its earnings were unchanged at $13.1 billion. Earnings per share rose 5.0%, to $14.50 from $13.81, on fewer shares outstanding.
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T. ROWE PRICE GROUP INC. $79 (Nasdaq symbol TROW; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 260.9 million; Market cap: $20.6 billion; Price-to-sales ratio: 6.4; Dividend yield: 1.9%; TSINetwork Rating: Average; www.troweprice- .com) earned $284.8 million in the fourth quarter of 2013, up 23.9% from $229.9 million a year earlier. Due to more shares outstanding, earnings per share rose 20.5%, to $1.06 from $0.88.

Improving stock markets continue to spur demand for its mutual funds. Revenue rose 18.1%, to $929.8 million from $787.3 million.

T. Rowe Price is a buy....

VISA INC. $217 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 636.6 million; Market cap: $138.1 billion; Price-to-sales ratio: 12.3; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.visa.com) is gaining from rising online shopping and higher credit and debit card use, particularly overseas. The company also has no credit risk.

Moreover, Visa stands to benefit from the recent theft of credit card data from Target and Neiman Marcus. These incidents could spur new regulations that would force retailers to install chip-based card readers, which are more secure than magnetic-swipe devices and would cut down on fraud. Retailers would probably have to pay for these upgrades, not Visa.

Visa is a buy....

MCDONALD’S CORP. $93 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 995.0 million; Market cap: $92.5 billion; Price-to-sales ratio: 3.4; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.mcdonalds.com) stands to rebound strongly from a slow 2013 as it builds more outlets in Asia, Africa and other fast-growing regions. Healthier menu items and premium coffees are also helping it attract new customers. However, a higher minimum wage in the U.S. would hurt its profits.

McDonald’s is a buy.

GOOGLE INC. $1,107 (Nasdaq symbol GOOG; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 334.1 million; Market cap: $369.8 billion; Price-to-sales ratio: 6.4; No dividends paid; TSINetwork Rating: Above Average; www.google.com) continues to profit from the shift to online advertising, even though it is earning less per ad. That’s because advertisers are paying less for ads on mobile devices, since they are more difficult to see on smaller screens.

However, Google’s Android software powers 80% of all mobile devices. That’s driving more traffic to its web sites. Google is also selling ads in bundles that cover multiple devices.

Google is a buy.
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CONAGRA FOODS INC. $32 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 420.4 million; Market cap: $13.4 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.- conagrafoods.com) is facing strong competition from other processed food makers, which has slowed its earnings growth. Even so, the stock has held up well since we made it our #1 buy for 2013.

The company continues to cut costs— including through a new flour-milling joint venture— after last year’s purchase of private-label food maker Ralcorp. These savings will help offset the loss of a big corporate customer. Moreover, ConAgra trades at a moderate 13.6 times its projected fiscal 2014 earnings of $2.35 a share. The stock yields a high 3.1%.

ConAgra is a buy.
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TUPPERWARE BRANDS CORP. $79 (New York symbol TUP; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 50.7 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.7; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) is up 68.1% since we named it as our #1 buy for 2011.

The company continues to benefit from strong demand for its plastic food containers and beauty products in emerging markets such as Asia and South America, which now supply 45% of its total sales. That’s helping it offset weaker sales in North America and Europe.

Tupperware’s sales rose 3.4% in 2013, to $2.7 billion from $2.6 billion in 2012. If you disregard the negative impact of foreign exchange rates, sales rose 6%. Excluding costs related to plant closures and other unusual items, earnings gained 2.5%, to $288.3 million from $281.4 million. Due to fewer shares outstanding, earnings per share rose 8.8%, to $5.43 from $4.99.
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NEWELL RUBBERMAID INC. $30 (New York symbol NWL; Aggressive Growth and Income Portfolios, Consumer sector; Shares outstanding: 287.2 million; Market cap: $8.6 billion; Priceto- sales ratio: 1.5; Dividend yield: 2.0%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, window blinds, pens and many other household goods.

The company has five divisions: Writing makes pens and markers (30% of sales, 46% of earnings); Home Solutions makes foodstorage and cooking products (28%, 24%); Tools makes hand and power tools and accessories (14%, 8%); Commercial Products makes cleaning supplies (14%, 11%); and Baby & Parenting makes high chairs, car seats and other goods for infants (14%, 11%).

Newell owns some the top brands in these markets, including Sharpie markers, Parker and Paper Mate pens, Calphalon cookware, Levolor blinds, Irwin tools and Graco car seats and strollers.
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H&R REIT (Toronto symbol HR.UN; www.hr-reit.com) owns stakes in 42 office buildings, 112 industrial properties and 164 shopping malls across Canada. The trust has a 98.2% occupancy rate....

INTACT FINANCIAL CORP. (Toronto symbol IFC; www.intactfc.com) is Canada’s largest provider of property and casualty insurance, based on premiums. Its brands include Intact Insurance, Canada BrokerLink, belairdirect and Grey Power....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice on stocks to buy 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....

New technology has increased oil production from North American shale rock formations. Even so, oil prices have held up due to the improving global economy and lower output from conventional wells....

At first glance, managing an investment portfolio may resemble prize fighting, with an investor bobbing and weaving to get the upper hand on the market. But for successful investors, good portfolio management is much more like a multi-dimensional tightrope act. And you must be able to perform these 4 balancing acts to succeed.

Stocks in the Manufacturing & Industry sector tend to be more volatile than those in the Finance, Utilities and Consumer sectors. Demand for their products moves up and down with the economy....

SHERRITT INTERNATIONAL (Toronto symbol S; www.sherritt.com) is a diversified natural resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 356 megawatts of power generation capacity in Cuba, with an additional 150 megawatts starting up soon....

BAXTER INTERNATIONAL INC. (New York symbol BAX; www.baxter.com) continues to expand overseas, which helps cut its exposure to the 2.3% excise tax it must pay on sales of medical devices as part of the Affordable Care Act (or Obamacare). In 2012, overseas markets supplied 58% of Baxter’s revenue....

Stocks in the Manufacturing & Industry sector tend to be more volatile than those in the Finance, Utilities and Consumer sectors. That’s because demand for their products moves up and down with the economy....

ENERFLEX LTD. $15.26 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Dividend yield: 2.0%) rents and sells equipment and services for natural gas production, including compression and processing plants, refrigeration equipment and power generators.

The company has a strong position in three expanding markets: U.S. and Canadian shale gas; Australian natural gas from coal beds; and conventional Middle Eastern natural gas, most of which gets converted to liquefied natural gas (LNG) for shipping worldwide.

In the quarter ended September 30, 2013, Enerflex’s revenue rose 5.7%, to $390.7 million from $369.7 million a year ago. However, earnings per share fell 37.0%, to $0.17 from $0.27, mostly due to cost overruns on three international projects.
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TOROMONT INDUSTRIES LTD. $25.40 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667- 5511; www.toromont.com; Shares outstanding: 76.7 million; Market cap: $2.0 billion; Dividend yield: 2.1%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. It also makes refrigeration systems through its CIMCO division.

The company completed the spinoff of Enerflex Ltd. (see right) in July 2011. Shareholders received shares of both the new Toromont Industries and Enerflex.

In the three months ended September 30, 2013, higher equipment sales and rentals, particularly to mining, construction and agriculture customers, pushed up Toromont’s revenue by 20.0%, to $498.3 million from $415.0 million a year earlier.
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AASTRA TECHNOLOGIES $44.59 (Toronto symbol AAH; TSINetwork Rating: Speculative) (905-760-4200; www.aastra.com; Shares outstanding: 11.8 million; Market cap: $531.1 million; Dividend yield: 1.8%) reports that its shareholders have approved a friendly takeover offer by Mitel Networks (symbol MNW on Toronto). Mitel’s shareholders have also approved the deal, which is expected to close soon.

Mitel is paying $6.52 U.S. in cash and 3.6 Mitel common shares for each Aastra share. Based on today’s price for Mitel stock, the offer is worth $44.87 per Aastra share.

Aastra shareholders will own 43% of the combined company, which will have over $1 billion in sales. The new firm will be a strong competitor in global business communications: it will have the largest share of the Western European market and will be No.3 in North America, behind Cisco and Avaya.
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TIM HORTONS $60.25 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 147.1 million; Market cap: $8.9 billion; Dividend yield: 1.7%) continues to successfully launch new products to take advantage of consumer trends. The latest is its diet-conscious Turkey Sausage Breakfast Sandwich.

This sandwich sells for $3.29 and can be ordered with egg and cheese on a toasted English muffin. Served this way, it contains 330 calories and 14 grams of fat. Customers can lower these amounts to 280 calories and nine grams of fat by ordering the sandwich with an egg-white option.

The breakfast market is extremely important to Tims: it served 208 million breakfast sandwiches in 2012 alone, and an estimated two-thirds of Canadians who buy breakfast at a restaurant choose Tim Hortons.
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NISSAN MOTOR (ADR) $18.42 (Nasdaq symbol NSANY; TSINetwork Rating: Above Average) (310- 771-3111; www.nissan-global.com; Shares outstanding: 2.3 billion; Market cap: $41.5 billion; No dividends paid) continues to profit from rising sales in China.

Sales of all car brands rose 15.7% in China in 2013, to 17.9 million vehicles. Sales were particularly strong in December 2013, at 2.1 million vehicles, about 17% higher than December 2012.

Nissan reports that its Chinese sales jumped 70.4% in December 2013, to a record 134,200 vehicles. That raised its total 2013 sales in the country by 17.2%, to 1.3 million.
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DOREL INDUSTRIES $41.21 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 31.5 million; Market cap: $1.3 billion; Dividend yield: 3.0%) has agreed to buy 100% of Tiny Love Ltd., a maker of baby products and developmental toys based in Tel Aviv, Israel, for an undisclosed sum.

Tiny Love has won awards in the developmental toy category, which includes products like activity gyms, mobiles and toys for babies and toddlers.

The company sells these products in over 50 countries and had about $45 million U.S. of revenue in 2013. To put that in perspective, Dorel’s sales were $607.3 million U.S. in the three months ended September 30, 2013. Tiny Love is also profitable, with strong cash flow.
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SHERRITT INTERNATIONAL $3.71 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 297.3 million; Market cap: $1.1 billion; Dividend yield: 4.6%) has announced that it plans to sell all of its coal interests. Two buyers will pay a total of $793 million in cash and assume $153 million of leases.

These sales will let Sherritt focus on its nickel, cobalt and oil interests and pay down some of its $2.1-billion debt.

Separately, the company will hold a special shareholders’ meeting on May 6 in response to a request from activist investment firm Clarke Inc. (symbol CKI on Toronto), which owns 5.2% of Sherritt’s shares.
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AMERIGO RESOURCES $0.49 (Toronto symbol ARG; TSINetwork Rating: Speculative) (604-681-2802; www.amerigoresources.com; Shares outstanding: 172.3 million; Market cap: $84.4 million; No dividends paid) processes copper and molybdenum from waste rock at Chile’s El Teniente, the world’s largest copper mine. This contract runs at least through 2037. Amerigo also has an agreement to process material from the nearby Cauquenes tailings pond.

Amerigo gets 94% of its revenue by processing copper. The remaining 6% comes from molybdenum.

A landslide in one of Amerigo’s production areas has hurt its copper and molybdenum production. In the quarter ended September 30, 2013, copper production fell 13.1%, to 11.04 million pounds from 12.70 million a year earlier. Molybdenum output declined 40.0%, to 193,138 pounds from 321,788.
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