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DIAGEO PLC ADRs $125 (New York symbol DEO; Conservative Growth Portfolio, Consumer sector; ADRs outstanding: 627.8 million; Market cap: $78.5 billion; Price-to-sales ratio: 4.2; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.diageo.com) is the world’s largest maker of spirits. Its major brands include Guinness stout, Smirnoff vodka and Captain Morgan rum.

In the first six months of its 2014 fiscal year, which ended December 31, 2013, Diageo’s sales fell 0.7%, to 5.9 billion British pounds from 6.0 billion a year earlier (1 pound = $1.86 Canadian).

Gains in Latin America (up 8%), North America (up 5%) and Africa (up 2%) offset weakness in Asia (down 6%) and Western Europe (down 1%).
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YUM! BRANDS INC. $73 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 442.9 million; Market cap: $32.3 billion; Price-to-sales ratio: 2.6; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.yum .com) will soon start selling breakfast foods and coffee through 5,500 of its Taco Bell outlets in the U.S.

The new breakfast menu features the Waffle Taco, a warm waffle wrapped around either bacon or sausage, with scrambled eggs, cheese and maple syrup. The A.M. Crunchwrap sandwich holds sausage, eggs and cheese inside a soft tortilla shell.

These foods are sure to draw a lot of criticism from health advocates. But that may be part of Yum’s plan to attract media attention and spur sales.
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Pat McKeough responds to many requests from members of his Inner Circle for specific investing advice 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....

BELLATRIX EXPLORATION (Toronto symbol BXE; www.bellatrixexploration.com) produces natural gas (70% of output) and oil (30%) in Alberta, B.C. and Saskatchewan....

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 specific 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 stock market climbs a ‘wall of worry’ and well-informed investors can help their stock portfolios climb with it.”...

RIOCAN REAL ESTATE INVESTMENT TRUST (Toronto symbol REI.UN; www.riocan.com) is Canada’s largest real estate investment trust (REIT), with interests in 346 shopping malls containing over 83 million square feet of leasable area. That total includes 51 U.S. malls with over 14 million square feet....

Technology stocks tend to be riskier than our other recommendations in the Manufacturing & Industry sector. That’s mainly because innovations can quickly make today’s products obsolete....

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

Holding companies give you an easy way to buy a variety of businesses at a discount. As well, their structure makes it possible for them to unlock hidden value by selling undervalued subsidiaries....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network....

INTERNATIONAL FLAVORS & FRAGRANCES INC. (New York symbol IFF; www.iff.com) makes over 36,000 unique compounds that improve the taste of foods and the smell of a wide variety of consumer products. Major clients include Procter & Gamble, Nestle, Kraft, Unilever and General Mills....

AURICO GOLD (Toronto symbol AUQ; www.auricogold.com) operates the El Chanate gold mine in Mexico, which produced 71,864 ounces in 2013....

ALARMFORCE INDUSTRIES $10.75 (Toronto symbol AF; TSINetwork Rating: Speculative) (1-800- 267-2001; www.alarmforce.com; Shares outstanding: 12.0 million; Market cap: $128.6 million; Dividend yield: 0.9%) sells twoway voice-alarm systems and monitoring services in Canada and increasingly in the U.S.

In the quarter ended October 31, 2013, the company’s sales rose 10.8%, to $12.6 million from $11.4 million a year earlier. It earned $2.6 million, or $0.21 a share, up sharply from $708,539, or $0.06.

AlarmForce’s revenue rose along with its subscriber base. Earnings were sharply higher because it spent a lot less on marketing than a year ago, in the wake of the launch of its VideoRelay system. This service lets subscribers watch their homes through computers and smartphones. AlarmForce now has 6,600 VideoRelay subscribers, with 3,800 in Canada and 2,800 in the U.S.
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FIRSTSERVICE CORP. $49.52 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 34.3 million; Market cap: $1.8 billion; Dividend yield: 0.9%) serves the following areas of the real estate market: commercial real estate, residential property management and property improvement. FirstService has more than 24,000 employees worldwide.

In the quarter ended December 31, 2013, the company’s revenue rose 14.5%, to $691.7 million from $604.1 million a year earlier (all figures except share prices in U.S. dollars). Excluding one-time items, earnings per share rose 26.0%, to $0.97 from $0.77.

Revenue rose at all three of FirstService’s divisions: Colliers International (commercial real estate), up 21%; FirstService Residential (residential property management), up 9%; and FirstService Brands (property services), up 8%.
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WESTJET $26.11 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493- 7853; www.westjet.com; Shares outstanding: 129.4 million; Market cap: $3.3 billion; Dividend yield: 1.8%) reports that its earnings rose 11.3% in the three months ended December 31, 2013, to $67.8 million from $60.9 million a year earlier. Earnings per share gained 13.0%, to $0.52 from $0.46, on fewer shares outstanding.

Revenue increased 7.6%, to $926.4 million from $860.6 million.

Demand for the company’s flights remains high, and it continues to enter into new partnerships with other airlines.
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CIMAREX ENERGY $111.84 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 86.8 million; Market cap: $9.7 billion; Dividend yield: 0.5%) plans to spend $1.8 billion on exploration and development in 2014, up 12.5% from $1.6 billion in 2013.

The company expects to spend 78% of that on projects in the Delaware Basin, which is part of the larger Permian Basin area of western Texas and southeastern New Mexico.

Cimarex operated 12 horizontal drilling rigs in the Permian Basin last year; it raised that to 16 at the end of January 2014.
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STANTEC INC. $66.17 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.4 million; Market cap: $3.1 billion; Dividend yield: 1.0%) sells a range of consulting, project delivery, design and technology services. Its clients operate in a variety of industries, including transportation, construction and oil and gas.

The company continues to grow through acquisitions. It just agreed to pay an undisclosed sum for California-based Processes Unlimited International, which has 450 employees in seven offices across California, Texas, Georgia and Tennessee.

Processes Unlimited offers engineering, project management and design services to customers in a wide range of markets, including oil and gas, alternative energy, utilities, food and beverage, packaging, mining and building products.
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SHERRITT INTERNATIONAL $3.02 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 297.3 million; Market cap: $1.0 billion; Dividend yield: 1.3%) has announced that its new Ambatovy mine on the island nation of Madagascar, off Africa’s east coast, has achieved commercial production.

Commercial production is defined as 70% of capacity on average over a 30-day period. Sherritt will now focus on reaching full capacity, which is 60,000 tonnes of nickel and 5,500 tonnes of cobalt a year.

Ambatovy is a joint venture that includes Sherritt, which owns 40% and operates the facility; Sumitomo Corp. and Korea Resources Corp., with 27.5% each; and SNC-Lavalin (a recommendation of The Successful Investor) with 5%.
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CHIPOTLE MEXICAN GRILL $552.18 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.0 million; Market cap: $17.1 billion; No dividends paid) is a Denver-based Mexican restaurant chain.

In the three months ended December 31, 2013, Chipotle’s sales rose 20.7%, to $844.1 million from $699.2 million a year earlier. Chipotle’s restaurants attracted more customers in the latest quarter, which pushed up samerestaurant sales by 9.3%. Per-share earnings gained 31.1%, to $2.57 from $1.96.

The company operates in the fickle and competitive U.S. restaurant market. The shares are now well above their April 2012 high of $442.40 and trade at over 45 times Chipotle’s forecast 2014 earnings of $12.20 a share. That’s a high ratio that leaves the stock vulnerable if the company runs into any short-term problems.
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CALIAN TECHNOLOGIES $19.60 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613- 599-8600; www.calian.com; Shares outstanding: 7.4 million; Market cap: $144.7 million; Dividend yield: 5.7%) operates in two areas: the business and technology services division (which supplies 70% of Calian’s revenue) provides engineers, health care workers and other skilled professionals to clients on a contract basis. The systems engineering division (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems.

In the three months ended December 31, 2013, Calian earned $2.8 million, or $0.38 a share. That’s down 18.4% from $3.4 million, or $0.45, a year ago. Revenue fell 10.5%, to $51.8 million from $57.9 million.

The business and technology services division continues to benefit from recurring orders from Canadian federal government departments, including the Department of National Defence. However, these clients placed fewer orders in the latest quarter, cutting the division’s revenue by 6.7%. That hurt Calian’s profit margins, which lowered its earnings.
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COMPUTER MODELLING GROUP $29.37 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 39.0 million; Market cap: $1.2 billion; Dividend yield: 2.6%) sells software and consulting services that help oil and gas producers use advanced recovery techniques to get more out of their wells. It has customers in over 50 countries and offices in Calgary, Houston, London, Caracas, Bogota, Kuala Lumpur and Dubai.

In the three months ended December 31, 2013, Computer Modelling’s revenue rose 14.4%, to $19.2 million from $16.8 million a year earlier. Software licence sales increased, as did consulting and professional services revenue. Earnings rose 17.7%, to $7.2 million from $6.1 million. Per-share earnings gained 18.8%, to $0.19 from $0.16, on fewer shares outstanding.

Computer Modelling holds cash of $64.7 million, or $1.66 a share, and has no debt. It spent $3.8 million, or a high 19.8% of its revenue, on research in the latest quarter.
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AIMIA INC. $19.30 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 173.0 million; Market cap: $3.3 billion; Dividend yield: 3.5%) is buying an unspecified minority stake in Think Big Digital.

This company runs the BIG loyalty program for Malaysian-based AirAsia Berhad and its affiliate, the Tune Group, a hotel operator.

Aimia says it will pay $17 million for its stake, plus an additional $7 million if certain milestones are met by the end of 2015.
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BMTC GROUP $14.45 (Toronto symbol GBT.A; TSINetwork Rating: Extra Risk) (514-648-5757; No website; Shares outstanding: 45.5 million; Market cap: $654.7 million; Dividend yield: 1.7%) is one of Quebec’s biggest retailers of furniture, electronics and appliances, with 33 outlets. It mainly sells these products through its two affiliates: Brault & Martineau and Ameublements Tanguay.

In March 2012, BMTC introduced a new banner, EconoMax, which offers lower-priced products. The company rebranded four outlets that had operated as Brault & Martineau liquidation centres.

It opened four more EconoMax stores in 2013, including in Ste-Eustache and Laval in the latest quarter. In the three months ended September 30, 2013, the company’s sales fell 4.2%, to $187.3 million from $195.6 million a year earlier. It earned $0.34 a share in the latest quarter, down 12.8% from $0.39 a share a year ago.
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LEON’S FURNITURE LTD. $15.43 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 70.6 million; Market cap: $1.1 billion; Dividend yield: 2.6%) built its furniture chain on its four main strengths: a huge selection of furniture, appliances and electronics; a lowest-price guarantee; strong after-sales service; and aggressive TV, radio and print advertising.

The company grew by steadily adding new stores until the March 2013 purchase of its main rival, The Brick, for $700 million.

The Brick operates 234 stores across Canada, while Leon’s has 75 in every province except British Columbia. Leon’s and The Brick will continue to operate as separate chains.
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SYMANTEC CORP. $20.54 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408- 517-8000; www.symantec.com; Shares outstanding: 696.0 million; Market cap: $14.3 billion; Dividend yield: 2.9%) earned $0.51 a share in its fiscal 2014 third quarter, which ended December 27, 2013, up from $0.45 a year earlier.

The gains were mainly due to savings from a new restructuring plan that includes laying off 30% to 40% of its managers and simplifying its product lines.

Revenue fell 4.8%, $1.7 billion from $1.8 billion. That’s mainly because the company is retraining its sales staff as part of its restructuring, and that disrupted their closing of new deals. Even so, the latest revenue beat the consensus forecast of $1.66 billion.
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