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GUGGENHEIM CHINA SMALL CAP ETF $27.17 (New York Exchange symbol HAO; buy or sell through brokers; www.guggenheimfunds.com) aims to track the AlphaShares China Small Cap Index, which is made up of all Chinese stocks that are legal for foreign investors and have market caps between $200 million and $1.5 billion.

The $264.2-millon fund’s top holdings are Youku Tudou, 2.0%; Tsingtao Brewery, 1.4%; BYD Co., 1.4%; China Everbright International, 1.4%; China Resources Gas Group, 1.3%; GCL Poly Energy International, 1.3%; Haier Electronics, 1.3%; Wuxi Pharmatech, 1.3%; Sino Biopharmaceutical, 1.2%; and Xinyi Glass Holdings, 1.3%.

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SPDR S&P CHINA ETF $79.24 (New York Exchange symbol GXC; buy or sell through brokers; www.spdrs.com) aims to track the S&P China BMI Index, which is made up of all publicly traded Chinese stocks available to foreign investors. Right now, SPDR S&P China ETF holds 239 stocks.

The $888.0-million fund’s top holdings are China Construction Bank, 6.8%; Tencent Holdings, 6.2%; China Mobile, 5.8%; Industrial & Commercial Bank, 5.8%; Baidu, 4.6%; Bank of China, 3.5%; CNOOC Ltd., 3.4%; PetroChina, 2.6%; China Life, 2.6%; and China Petroleum & Chemical, 2.2%.

The ETF was launched on March 19, 2007. It has a 0.59% MER and yields 2.1%.
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TRANSCANADA CORP. $46.71 (Toronto symbol TRP; Shares outstanding: 707.0 million; Market cap: $33.4 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.transcanada.com) now estimates that it will cost $5.4 billion U.S. to build the Keystone XL pipeline, which would pump crude from the Alberta oil sands to refineries on the U.S. Gulf Coast. That’s up from $5.3 billion U.S.

TransCanada hopes the U.S. government will approve Keystone XL in early 2014. If so, it could start up in 2016.

If the company has to cancel Keystone XL, it will probably have to write off the $2.0 billion U.S. that it has already invested in it. That’s equal to about 50% of the company’s annual cash flow, but it’s still a manageable amount.
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VERESEN $13.86 (Toronto symbol VSN; Shares outstanding: 200.9 million; Market cap: $2.8 billion; TSINetwork Rating: Average; Yield: 7.2%) 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. Enbridge owns the other 50%. Veresen also owns the Alberta Ethane Gathering System, and Veresen and Enbridge together hold 85.4% of the Aux Sable NGL plant.

In February 2012, Veresen paid Encana Corp. $920 million for the Hythe/Steeprock natural gas gathering and processing complex. Encana signed a long-term deal to buy most of this facility’s gas.

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PEMBINA PIPELINE $34.42 (Toronto symbol PPL; Shares outstanding: 313.0 million; Market cap: $10.8 billion; TSINetwork Rating: Average; Div. yield: 4.9%; 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.

In the quarter ended September 30, 2013, Pembina’s revenue rose 34.9%, to $1.2 billion from $870.9 million a year earlier. The gains came from pipeline expansions and Provident Energy, which Pembina bought for $3.2 billion last year. Provident extracts, transports and stores NGLs.

Cash flow jumped 41.7%, to $188.7 million from $133.2 million. Cash flow per share gained 32.6%, to $0.61 from $0.46, on more shares outstanding.
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ENCANA CORP. $20.28 (Toronto symbol ECA; Shares outstanding: 740.2 million; Market cap: $15.0 billion; TSINetwork Rating: Average; Dividend yield: 1.4%; www.encana- .com) is one of North America’s largest natural gas producers.

However, rising shale gas production has cut prices from $11.50 U.S. per thousand cubic feet in 2008 to just $3.63 today.

That’s prompting Encana to cut its reliance on gas by narrowing its focus from around 30 properties to five: Montney (B.C.), Duvernay (Alberta), DJ Basin (Colorado), San Juan Basin (New Mexico) and Tuscaloosa Marine Shale (Louisiana).
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GREAT-WEST LIFECO $32.20 (Toronto symbol GWO; Shares outstanding: 999.5 million; Market cap: $32.7 billion; TSINetwork Rating: Above Average; Yield: 3.8%; www.greatwestlifeco.com) is Canada’s largest insurance company. It also offers mutual funds and wealth management. Power Financial owns 68.1% of Great-West.

Excluding costs to integrate Irish Life, Great-West’s earnings per share rose 7.3% in the three months ended September 30, 2013, to $0.59 from $0.55 a year earlier. The company ended the quarter with $705.1 billion of assets under administration.

Earnings at the Canadian division (which supplies 56% of the total) rose 18.6%, as higher sales of personal insurance offset lower demand for group policies. The value of the assets this business administers also rose, which increased its wealth management fee income.
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DEVON ENERGY CORP. (New York symbol DVN; www.dvn.com) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 57% gas and 43% oil....

SUNCOR ENERGY INC. $36 (www.suncor.com) produced an average of 437,000 barrels of oil a day at its oil sands projects in November 2013. That’s up 16.5% from 375,000 barrels in October, when the company slowed production due to the temporary shutdown of a pipeline....

CANADIAN TIRE CORP. $95 (www.canadiantire.com) has developed a new all-season tire with a special sidewall that changes colour when the outside temperature falls below a certain point. That tells the driver it’s time to install snow tires. Unique products like this should give Canadian Tire an edge over big U.S....

ENBRIDGE INC. $43 (www.enbridge.com) has raised its quarterly dividend by 11.1%, to $0.35 a share from $0.315. The new annual rate of $1.40 yields 3.3%. The company expects to start operating several new oil pipelines in the next few months. As a result, its earnings should rise from a projected $1.79 a share in 2013 to between $1.84 and $2.04 a share in 2014....

CAE INC. $13 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 261.5 million; Market cap: $3.4 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.8%; TSINetwork Rating: Average; www.cae.com) is the world’s leading maker of flight simulators for commercial airlines, with 70% of the market. It also makes simulators for military clients. The company began training pilots for its customers in 2001 and now has over 100 flight schools in 30 countries.




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METRO INC. $63 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 91.7 million; Market cap: $5.8 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.metro.ca) plans to close its produce and dairy distribution facility in St-Augustin-de-Desmaures, Quebec, and shift these operations to its recently opened plant in Laval.

The company will complete this move in March 2014. It did not say how much it will have to pay in severance or other expenses. However, the plant closure will help Metro cut its operating costs and compete with larger supermarket chains.

Metro is a buy....

SAPUTO INC. $47 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 194.3 million; Market cap: $9.1 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.8%; TSINetwork Rating: Average; www.saputo.com) recently agreed to a friendly takeover of Warrnambool Cheese and Butter Factory, one of Australia’s largest producers of milk, cheese, butter and other dairy products. However, hostile offers from Australian dairy firms have forced Saputo to increase its original bid by 31%.

Australian competition regulators have now blocked Saputo from increasing its 9.6% stake in Warrnambool for the next two months. That will give them time to determine whether these rival bidders, if successful, would gain an overwhelming share of Australia’s dairy market.

Saputo is still a hold....

BOMBARDIER INC. (Toronto symbols BBD.A $4.52 and BBD.B $4.50; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $8.1 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.2%; TSINetwork Rating: Average; www.bombardier.com) has won an order for five of its new CSeries passenger jets from Iraqi Airways. This client also has options to buy 11 additional planes.

The company now has 182 firm orders for the CSeries. If buyers exercised their options for 237 more planes, these orders would total roughly $32 billion U.S. Bombardier expects to begin deliveries by the end of 2014.

Bombardier B stock is a buy....

AGRIUM INC. $95 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 144.5 million; Market cap: $13.7 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.4%; TSINetwork Rating: Average; www.agrium.com) gets two-thirds of its revenue—but just a third of its earnings—from its retail stores, which sell seeds, fertilizers and other products to farmers. It also makes nitrogen-based fertilizer.

Agrium’s retail division is shielding it from volatile fertilizer prices. In the third quarter of 2013, overall sales rose 1.3%, to $2.9 billion from $2.8 billion a year ago (all amounts except share price and market cap in U.S. dollars). A 15.0% retail sales gain offset a 23.7% fertilizer sales drop. Earnings per share fell 37.5%, to $0.50 from $0.80, due to unplanned outages at its nitrogen plants.

Weak fertilizer prices will probably cut Agrium’s 2013 earnings by 20.4%, to $7.60 a share from $9.55 in 2012. The stock trades at 11.8 times that estimate. The $3.00 dividend yields 3.4%.
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POTASH CORP. OF SASKATCHEWAN $33 (Toronto symbol POT $33 Aggressive Growth Portfolio, Resources sector; Shares outstanding: 863.2 million; Market cap: $28.5 billion; Price-to-sales ratio: 3.6; Dividend yield: 4.5%; TSINetwork Rating: Average; www.potashcorp.com) operates five potash mines in Saskatchewan and one in New Brunswick that account for 20% of global capacity. The company also makes fertilizers from nitrogen and phosphate.

Potash Corp. continues to suffer from last July’s breakup of a marketing alliance between producers in Russia and Belarus. The resulting uncertainty has prompted big clients like China and India to delay signing new potash supply deals because they feel prices will keep falling. In the third quarter of 2013, Potash Corp. sold its potash for $307 U.S. a tonne, down 28.4% from $429 U.S. a year earlier.

In response, the company is slowing production and cutting 18% of its workforce. Potash Corp. expects to pay $70 million in severance costs and related charges (all amounts except share price and market cap in U.S. dollars).
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CANADIAN NATIONAL RAILWAY CO. $58 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 836.0 million; Market cap: $48.5 billion; Price-to-sales ratio: 4.6; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 32,350- kilometre network stretches across the country and through the U.S. Midwest to the Gulf of Mexico.

Manufacturers are shipping more goods by rail, thanks to the improving North American economy. At the same time, a lack of pipeline capacity is prompting oil producers to ship more of their product by train.

As a result, CN’s earnings rose 9.0% in the three months ended September 30, 2013, to $724 million from $664 million a year earlier. Due to fewer shares outstanding, earnings per share gained 13.2%, to $0.86 from $0.76 (all per-share amounts adjusted for a 2-for-1 stock split in December 2013).
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BLACKBERRY LTD. $6.29 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.6 million; Market cap: $3.3 billion; Price-to-sales ratio: 0.3; No dividends paid; TSINetwork Rating: Speculative; www.blackberry.com) has sold $1 billion U.S. of convertible debentures to a group of private investors. These buyers also have an option to buy up to $250 million U.S. in additional debentures. If all investors convert their holdings, the total number of shares outstanding would rise by 19.2%.

The cash will help the smartphone maker complete its restructuring, which includes cutting 40% of its workforce.

The company will also shift its focus away from consumers to business and government clients, who rely on its networks to send encrypted mobile email messages and other sensitive data.
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ANDREW PELLER LTD. $14 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.3 million; Market cap: $200.2 million; Price-to-sales ratio: 0.7; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest producer of wines, after Vincor International. The company has wineries in Nova Scotia, Ontario and British Columbia.

In the second quarter of its 2014 fiscal year, which ended September 30, 2013, Peller’s sales rose 5.7%, to $77.2 million from $73.1 million a year earlier. However, strong price competition in Western Canada and higher costs for wine and juice purchased from international suppliers cut Peller’s earnings by 17.3%, to $3.5 million from $4.3 million. Per-share earnings fell 19.4%, to $0.25 from $0.31.

However, if you disregard unusual items, such as losses on hedging contracts that Peller uses to lock in foreign exchange rates, earnings would have risen 11.2%.
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SHAWCOR LTD. $40 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 59.4 million; Market cap: $2.4 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.3%; TSINetwork Rating: Average; www.shawcor.com) gets 90% of its revenue by making sealants and coatings that keep oil and natural gas pipelines from rusting. The remaining 10% comes from manufacturing industrial products, such as electrical wire and protective sheaths.

In April 2013, the company purchased the 49% of Socotherm LaBarge LLC that it did not already own for $30 million, which included assuming its debt. Texas-based Socotherm coats and insulates pipelines for deepwater oil and gas projects. Its clients operate in the Gulf of Mexico and off Africa’s west coast. Recently, ShawCor agreed to sell Socotherm’s half of a joint venture in Brazil for $30 million U.S.

Thanks to the Socotherm purchase and new pipeline-coating contracts in North America and Asia, ShawCor’s revenue rose 34.7% in the three months ended September 30, 2013, to $525.8 million from $390.5 million a year earlier.
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LINAMAR CORP. $41 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.7 million; Market cap: $2.7 billion; Price-to-sales ratio: 0.8; Dividend yield: 0.8%; TSINetwork Rating: Extra Risk; www.linamar.com) gets 80% of its revenue by making engines, transmissions and other precisionmachined parts for automakers. The company has plants in North America, Europe and Asia.

The remaining 20% of Linamar’s revenue comes from its self-propelled, scissor-type elevating work platforms, which it sells under the Skyjack name, plus consumer products, such as lawn mowers and cargo trailers.

Thanks to rising car demand, the company continues to win new orders from automakers. Rising construction activity has also prompted contractors to order more Skyjack platforms, particularly in fast-growing markets like Brazil.
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FINNING INTERNATIONAL INC. $25 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 172.0 million; Market cap: $4.3 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.4%; TSINetwork Rating: Above Average; www.finning.com) rents, sells and services heavy equipment made by U.S.-based Caterpillar Inc. (New York symbol CAT). Its main customers are in the oil, mining, forest products and construction industries.

Canada supplies 50% of Finning’s revenue, followed by South America (37%) and the U.K. (13%).

Lower prices for copper and other commodities have weakened equipment demand, particularly in South America and the U.K. However, Canadian sales remain strong. Weak commodity prices are also prompting Finning’s customers to rent more equipment and buy used machinery. As well, they are spending more to make their current gear last longer.
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BELL ALIANT INC. $27 (Toronto symbol BA, Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 229.1 million; Market cap: $6.2 billion; Price-to-sales ratio: 2.2; Dividend yield: 7.0%; TSINetwork Rating: Average; www.bellaliant.ca) sells phone and Internet services to 2.4 million customers in Atlantic Canada and rural Ontario and Quebec.

Like BCE, the company continues to replace copper wires with fibre optic cable. It now has 944,914 high-speed Internet users (up 3.4% from a year earlier) and 163,264 digital TV customers (up 52.0%).

In the three months ended September 30, 2013, Bell Aliant’s revenue fell 0.4%, to $694.9 million from $697.4 million a year earlier. Before one-time items, earnings fell 6.7%, to $0.42 a share from $0.45. However, cash flow (after capital expenditures) jumped 28.0%, to $0.64 a share from $0.50.
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BCE INC. $46 (Toronto symbol BCE; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 775.9 million; Market cap: $35.7 billion; Price-to-sales ratio: 1.8; Dividend yield: 5.1%; TSINetwork Rating: Above Average; www.bce.ca) is Canada’s largest provider of telephone services, with 5.3 million customers in Ontario and Quebec. It also has 2.2 million high-speed Internet customers and 2.2 million TV subscribers. Together, these services supply 47% of the company’s revenue.

BCE also sells wireless services across Canada. Its 7.8 million mobile subscribers provide 29% of its revenue.

In addition, BCE owns 44% of regional phone company Bell Aliant (see page 2). This investment supplies 13% of its revenue. The remaining 11% comes from its Bell Media division, which owns the CTV Television (30 stations), 34 specialty channels, pay-TV services and 107 radio stations.
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