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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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AURICO GOLD $5.05 (Toronto symbol AUQ; TSINetwork Rating: Speculative) (604-681-2802; www.auricogold.com; Shares outstanding: 247.1 million; Market cap: $1.3 billion; Dividend yield: 3.3%) 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 mine’s output should rise to over 152,000 ounces this year.

AuRico hasn’t yet released its financial results for 2013, but in the three months ended September 30, its revenue rose 36.5%, to $54.3 million from $39.8 million a year earlier. Cash flow jumped to $0.09 a share from nil. Higher gold production offset lower prices.
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BIRCHCLIFF ENERGY $8.40 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Units outstanding: 142.9 million; Market cap: $1.2 billion; No dividends paid) jumped recently after it announced that it ended 2013 with record production of 30,000 barrels of oil equivalent a day (including natural gas).

Since then, the company’s output has risen to 32,100 barrels a day, mainly because it bought a partner’s 30% stake in one of its wells in Alberta’s Pouce Coupe area for $56 million.

The company plans to spend $275 million on exploration and development this year. That could let it end 2014 with production as high as 39,500 barrels of oil equivalent per day.
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ZARGON OIL & GAS $8.36 (Toronto symbol ZAR; TSINetwork Rating: Speculative) (403-264-9992; www.zargon.ca; Shares outstanding: 30.1 million; Market cap: $246.7 million; Dividend yield: 8.6%) produces natural gas and oil in Alberta, Manitoba, Saskatchewan and North Dakota. Its production is 64% oil and 36% gas.

In the quarter ended September 30, 2013, Zargon produced 7,560 barrels of oil equivalent a day, down 1.0% 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.

However, higher oil and gas prices in the latest quarter more than offset the lower output, raising the company’s cash flow per share by 14.6%, to $0.55 from $0.48.
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BELLATRIX EXPLORATION $8.59 (Toronto symbol BXE; TSINetwork Rating: Speculative) (403-266- 8670; www.bellatrixexploration.com; Shares outstanding: 170.5 million; Market cap: $1.5 billion; No dividends paid) produces natural gas (70% of output) and oil (30%) in Alberta, B.C. and Saskatchewan.

Bellatrix closed its $756-million cash-and-stock purchase of Angle Energy in early December 2013. The deal added 500 drilling targets to Bellatrix’s inventory, bringing its total to over 2,000, and doubled its undeveloped land base to over 400,000 acres.

In addition, Angle produces 10,500 barrels of oil equivalent a day (58% oil and 42% gas) in Alberta. That let Bellatrix end 2013 with record production of 38,000 barrels a day. Several new wells about to enter production will boost that figure to 40,000.
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RUBY TUESDAY, INC. $5.58 (New York symbol RT; TSINetwork Rating: Speculative) (865-379-5700; www.rubytuesday.com; Shares outstanding: 61.4 million; Market cap: $342.8 million; No dividends paid) reports that its revenue fell 8.0% in its fiscal 2014 second quarter, which ended December 3, 2013, to $276.2 million from $300.1 million a year earlier.

That’s mostly because of continued weak consumer spending and intense competition in the casual-dining business. In the latest quarter, Ruby Tuesday lost $25.9 million, or $0.43 a share, compared to a loss of $2.9 million, or $0.05.

The company is now moving its restaurants back to a bar-and-grill atmosphere, revamping the menu and launching a major new marketing campaign. Ruby Tuesday is also closing some underperforming restaurants.
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TEMPUR SEALY $48.85 (New York symbol TPX; TSINetwork Rating: Speculative) (800-878-8889; www.tempursealy.com; Shares outstanding: 60.5 million; Market cap: $2.9 billion; No dividends paid) completed its $1.3- billion purchase of rival Sealy in March 2013. This was a major acquisition for Tempur Sealy (formerly Tempur-Pedic), but it has let the company diversify into traditional spring-coil beds.

The purchase is also helping Tempur Sealy offset rising competition in its current business; the company makes and distributes mattresses and neck pillows made of its Tempur material, which conforms to the body to provide support and alleviate pressure points. Competitors Simmons Bedding and Serta have both successfully launched memory-foam mattresses that directly compete with Tempur Sealy’s products.

In the quarter ended September 30, 2013, revenue jumped to $735.5 million from $347.9 million a year earlier. The gain included $389.9 million from Sealy. Excluding one-time items, earnings per share rose 4.3%, to $0.73 from $0.70.
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WYNDHAM WORLDWIDE $75.00 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 130.3 million; Market cap: $9.7 billion; Dividend yield: 1.6%) is one of the world’s largest hospitality companies, with 7,410 franchised hotels worldwide.

Wyndham also manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has over 106,000 vacation-rental properties in 100 countries.

In the three months ended September 30, 2013, Wyndham’s revenue rose 12.8%, to $1.43 billion from $1.27 billion a year earlier. The company gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped raise its occupancy rate by 1.9%.
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CHIPOTLE MEXICAN GRILL $515.95 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 30.9 million; Market cap: $16.0 billion; No dividends paid) is considering expanding its new fast-casual pizza restaurant concept, which operates much like its burrito outlets— making pizza quickly, individually tailored and with higher-quality ingredients.

In May 2013, Chipotle partnered with Pizzeria Locale to open an outlet in Denver. This location’s oven bakes the pizzas in less than two minutes; individual 11-inch pies cost around $6.50, and the restaurant also serves red or white Italian wine.

Pizza is a fast-growing food choice, especially among younger consumers. The first Pizzeria Locale is a success, and Chipotle may add one or two more in Denver.
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ADOBE SYSTEMS INC. $61.77 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 499.9 million; Market cap: $30.7 billion; No dividends paid) makes a range of software that lets computer users create, edit and share documents in the popular PDF format. As well, graphic designers use its software to create print publications and web pages.

Adobe earned $164.6 million, or $0.32 a share, in its fiscal 2013 fourth quarter, which ended November 29, 2013. That’s down 46.5% from $307.9 million, or $0.61 a share, a year earlier. Revenue fell 9.7%, to $1.04 billion from $1.15 billion.

Last year, the company starting selling its Creative Cloud package of photo-editing and desktoppublishing programs as a subscription instead of a onetime purchase. Adobe added 402,000 Creative Cloud subscribers during the quarter, to bring its total to 1.44 million. That beat its goal of 1.25 million.
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SYMANTEC CORP. $23.62 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 696.0 million; Market cap: $16.2 billion; Dividend yield: 2.5%) sells computer security technology, including anti-virus and emailfiltering software, to businesses and consumers. It also offers data-archiving software.

In Symantec’s fiscal 2014 second quarter, which ended September 27, 2013, its earnings rose 11.6%, to $355 million, or $0.50 a share. A year earlier, it earned $318 million, or $0.45.

Savings from Symantec’s new restructuring plan were behind the gains. This initiative includes laying off 30% to 40% of its managers and simplifying its product lines.
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WESTJET $26.99 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 129.4 million; Market cap: $3.5 billion; Dividend yield: 1.5%) was our #1 pick for 2013 at $22.29.

The stock dipped as low as $19.65 in July, but it went on to rise to an all-time high of $28.99. It’s now up 21.1%.

The company has a modern, fuel-efficient fleet and a low cost structure. Its new Canadian regional airline, WestJet Encore, adds growth prospects.
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ALIMENTATION COUCHE-TARD $81.60 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 179.4 million; Market cap: $15.4 billion; Dividend yield: 0.5%) was our #1 pick for 2012 at $30.55. Its shares are now up a whopping 167.1%.

The company continues to introduce more-profitable products at its North American stores, including improved fresh and takeout food. There is lots of potential to sell similar items through the Statoil chain in Norway, which it bought in June 2012.

Alimentation Couche-Tard is still a buy.
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GOODYEAR TIRE & RUBBER CO. $24.42 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 246.9 million; Market cap: $6.0 billion; Dividend yield: 0.8%) is the world’s largest tire maker, with 52 plants in 22 countries.

In the quarter ended September 30, 2013, the sluggish global economy cut Goodyear’s sales by 5.0%, to $5.0 billion from $5.3 billion a year earlier. North American sales fell 9.1%, to $2.2 billion from $2.4 billion. Sales also declined 9.2% in Asia. That offset a slight increase in Europe and a 1.3% rise in Latin America.

However, earnings per share climbed sharply, to $0.68 from $0.45. The higher profits came from the company’s North American operations, which sold more replacement tires (they’re more profitable than new factory-installed car tires), and cut its costs.
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