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NEW GOLD $5.78 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold- .com; Shares outstanding: 502.5 million; Market cap: $2.9 billion; No dividends paid) has four operating mines: the Mesquite mine in the U.S., the Cerro San Pedro mine in Mexico, the Peak mine in Australia and the just-completed New Afton mine in B.C. It also owns 30% of the El Morro copper/gold project in Chile and 100% of the Blackwater mine in B.C.

In the quarter ended June 30, 2013, New Gold’s cash flow fell 10.0%, to $0.09 a share from $0.10 a year earlier. Lower gold prices offset new production from New Afton, which started up in late 2012.

New Gold’s $855.5 million of long-term debt is a moderate 28.5% of its market cap. It also holds cash of $562.5 million, or $1.12 a share.
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IAMGOLD $4.59 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold- .com; Shares outstanding: 376.6 million; Market cap: $1.7 billion; Dividend yield: 5.5%) owns 38% of the Sadiola mine and 40% of the Yatela mine, both located in Mali; 90% of its new Essakane gold mine in Burkina Faso; 100% of the Doyon mine in Quebec; and 95% of the Rosebel mine in Suriname, South America.

In addition, IAMGold has a 1% royalty interest in the Diavik diamond mine in the Northwest Territories. It also owns the Niobec niobium mine in Quebec. When used as an additive, niobium makes steel stronger, more heat-resistant and easier to weld.

In the three months ended June 30, 2013, IAMGold’s revenue fell 17.4%, to $301.1 million from $364.5 million a year earlier. Cash flow per share fell 10.0%, to $0.18 from $0.20. The declines were mostly due to lower gold prices, partly offset by a 10% production increase.
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FAIR ISAAC CORP. $54.97 (New York symbol FICO; TSINetwork Rating: Average) (415- 472-2211; www.fairisaac.com; Shares outstanding: 35.2 million; Market cap: $1.9 billion; Dividend yield: 0.2%) will now sell its Falcon Fraud Manager payment-security system in Brazil through partner Total System Services (symbol TSS on New York).

Total has offered the Falcon software to its clients in other countries since 1998.

Total Systems manages several of Brazil’s most popular credit cards. The partners will initially protect nearly 1.8 million cardholders in the country with Falcon Fraud Manager.
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ACI WORLDWIDE $54.45 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 39.5 million; Market cap: $2.2 billion; No dividends paid) makes software for processing transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. Its products also help cut fraud.

In the quarter ended June 30, 2013, ACI’s revenue rose 30.0%, to $208.0 million from $160.0 million a year earlier. That’s mainly due to the contribution from Online Resources Corp., which ACI bought for $126.6 million early this year. The purchase has helped ACI further expand into online banking and bill payments.

Without one-time items, earnings per share dropped to $0.14 from $0.16. The decline was largely due to the cost of integrating acquisitions.
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AASTRA TECHNOLOGIES $20.78 (Toronto symbol AAH; TSINetwork Rating: Speculative) (905-760- 4200; www.aastra.com; Shares outstanding: 11.8 million; Market cap: $245.1 million; Dividend yield: 3.9%) develops and markets products and systems for accessing communication networks, including the Internet. Its technology is centred around business telephone systems and includes products that integrate land lines and mobile phones.

In the three months ended June 30, 2013, Aastra’s sales rose 2.5%, to $150.8 million from $147.1 million a year earlier, as the company’s key markets in Germany and France improved significantly. Earnings per share jumped to $0.21 from $0.13.

Aastra holds cash of $132.5 million, or a high $11.42 a share, and has no long-term debt. It spends a high 11% of its revenue on research.
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AIMIA INC. $18.30 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 172.6 million; Market cap: $3.2 billion; Dividend yield: 3.7%) has reached an agreement with TD Bank and CIBC to share its Aeroplan loyalty program.

TD Bank is now the primary credit card issuer for Aeroplan. However, the deal will let CIBC, the former main card issuer, hang on to Aeroplan accounts held by customers who also bank at CIBC. That’s about half the Aeroplan portfolio.

CIBC will receive an upfront payment of $200 million from TD and Aimia. As well, TD will pay CIBC $37.5 million annually for the next three years.
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BROADRIDGE FINANCIAL SOLUTIONS $32.80 (New York symbol BR; TSINetwork Rating: Extra Risk) (201-714-3000; www.broadridge.com; Shares outstanding: 119.1 million; Market cap: $3.9 billion; Dividend yield: 2.6%) continues to hit all-time highs, but we think the stock still has room to rise.

Broadridge serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. It processes 90% of all proxy votes in the U.S. and Canada.

In its fiscal 2013 fourth quarter, which ended June 30, 2013, Broadridge’s earnings jumped 61.4%, to $134.6 million from $83.4 million a year earlier. Per-share earnings rose 67.2%, to $1.12 from $0.67, on fewer shares outstanding.
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Pat McKeough responds to many requests from members of his Inner Circle for specific advice on stocks 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....

METRO INC. (Toronto symbol MRU; www.metro.ca) operates about 600 supermarkets in Quebec and Ontario. It also has over 250 drugstores under the Brunet, The Pharmacy and Drug Basics banners....

CISCO SYSTEMS INC. (Nasdaq symbol CSCO; www.cisco.com) is a leading maker of hardware and software that links and manages computer networks. The company’s hardware includes routers, local area network (LAN) and asynchronous transfer mode (ATM) switches, and server computers. Cisco mainly sells this equipment to large businesses and government agencies....

Heavy equipment distributor Toromont Industries Ltd. completed the spinoff of its natural gas equipment division, Enerflex Ltd., in July 2011. Shareholders received shares of the new Toromont and shares of Enerflex. Here is our latest report on these two Canadian stocks which we follow in our advisory for more aggressive investing, Stock Pickers Digest....

TORSTAR CORP. $5.99 (www.torstar.com) is shutting down its digital division, which mainly operates its websites. This business accounts for about 11% of Torstar’s revenue. The company will shift these operations into its daily and community newspaper divisions. The move will let it cut jobs and improve efficiency. Buy.

CAE $12 (www.cae.com) has won a contract to build three simulators for the Royal Australian Air Force, which will use this equipment to train pilots to fly Hawk Mk-127 fighter jets. CAE did not say how much this contract is worth, but it will deliver these simulators in 2016 and 2017....

IGM FINANCIAL INC. $49 (www.igmfinancial.com) reported that it had $124.8 billion of assets under management on August 31, 2013. That’s up 6.0% from $117.7 billion a year earlier. Improving stock markets were the main reason for the rise. IGM’s fee income rises and falls with the value of the mutual funds and other securities it manages, so the company’s revenue and earnings benefit when the value of these assets increases....

METRO INC. $67 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 93.1 million; Market cap: $6.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.metro.ca) operates about 600 supermarkets in Quebec and Ontario. It also has over 250 drugstores under the Brunet, The Pharmacy and Drug Basics banners.

Metro has aggressively cut costs and improved its efficiency in response to rising competition from larger Canadian chains like Loblaw and Sobeys, as well as big U.S. retailers like Wal-Mart and Costco. It also upgraded its stores and lowered its advertising costs by converting its various banners in Ontario to the Metro and Food Basics brands.


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ENBRIDGE INC. $42 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 1.0 billion; Market cap: $42.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) has opened its first geothermal power plant. This facility, which is located near Vale, Oregon, taps into heat from the earth’s core to generate electricity.

Enbridge paid $23.8 million for a 20% stake in this plant. U.S. Geothermal Inc. (New York symbol HTM) owns the other 80%.

Power from geothermal plants is much more reliable than solar and wind projects. That cuts the risk of this investment. As well, the plant has a 25-year deal to sell its electricity to Idaho’s power grid.
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DUNDEE CORP. $19 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 54.1 million; Market cap: $1.0 billion; Price-to-sales ratio: 2.2; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) is a holding company with investments in wealth management, real estate, natural resources and agriculture.

In the three months ended June 30, 2013, Dundee lost $69.3 million, or $1.32 a share. However, that’s a big improvement over the $133.6 million, or $2.47 a share, it lost a year earlier. That’s because the company had fewer losses from its investment portfolio. Revenue rose 2.0%, to $48.0 million from $47.1 million.

Dundee is a buy....

SNC-LAVALIN GROUP INC. $41 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.6 million; Market cap: $6.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Average; www.snclavalin.com) is selling 66% of its stake in the Astoria II gas-fired electrical power plant near New York City.

The company did not say how much it would receive for this interest. However, it paid $70 million U.S. for a 20% stake in this facility in 2009.

The sale is part of SNC’s plan to sell some of its less important investments in concessions, which are rights that governments grant to run public facilities. The company will use the cash from these sales to focus on engineering projects in areas with greater potential, including mining, oil and gas, and water treatment projects.
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GREAT-WEST LIFECO INC. $30 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $33.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) earned $521 million in the three months ended June 30, 2013, up 6.8% from $488 million a year earlier. Due to fewer shares outstanding, earnings per share rose 7.8%, to $0.55 from $0.51. The company ended the quarter with $595.7 billion of assets under administration, up 13.8% from $523.5 billion a year earlier.

Demand for insurance and wealth management services rose in Canada (53% of earnings) and Europe (33%). However, higher salaries and other costs increased losses at its Putnam mutual fund business at its U.S. division (14%).

On July 18, 2013, Great-West completed its $1.75-billion purchase of Irish Life Group, Ireland’s largest pension manager and life insurance provider, with $50 billion of assets under management. The purchase should add $0.10 a share to Great-West’s 2014 earnings.
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TIM HORTONS INC. $58 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 151.0 million; Market cap: $8.8 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.8%; TSINetwork Rating: Average; www.timhortons.com) has opened its first coffee-and-donut store in Kuwait under its franchise deal with Dubai-based Apparel Group. This is the company’s 32nd store in the Persian Gulf. It also has 3,468 stores in Canada and 807 in the U.S.

In February 2011, Tim Hortons signed a master license agreement with the Apparel Group to open 120 outlets in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman over a five-year period. Teaming up with well-established local companies like Apparel Group cuts the risk of expanding in unfamiliar markets.

Tim Hortons is a buy....

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 first quarter of its 2014 fiscal year, which ended June 30, 2013, Peller’s sales were flat at $72.7 million. The company continues to see strong demand for premium wines and brands it sells under licence, such as Wayne Gretzky wines. However, sales of home wine kits declined.

Earnings rose 10.6%, to $5.1 million from $4.6 million. Per-share earnings gained 12.1%, to $0.37 from $0.33. The company benefited from hedging contracts that it uses to lock in foreign exchange rates; that was the main reason for the higher earnings. Without these hedges, Peller’s earnings would have gained 0.2%.
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MOLSON COORS CANADA INC. (Toronto symbols TPX.A $51 and TPX.B $51; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 183.6 million; Market cap: $9.5 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.6%; TSINetwork Rating: Average; www.molsoncoors.com) is one of the world’s leading brewers. Its main brands include Coors Light, Molson Canadian and Carling.

In the three months ended June 29, 2013, the company earned $278.6 million (all amounts except share prices and market cap in U.S. dollars). That’s up 11.4% from $250.1 million a year earlier. Earnings per share rose 9.4%, to $1.51 from $1.38. These figures exclude unusual items, mainly costs to integrate StarBev LP, which the company bought for $3.4 billion in June 2012. StarBev owns nine breweries in central and eastern Europe.

Thanks mainly to StarBev’s contribution, sales rose 17.9%, to $1.2 billion from $999.4 million. StarBev is also helping the company offset slower beer sales in North America.
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MANITOBA TELECOM SERVICES INC. $33 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 67.7 million; Market cap: $2.2 billion; Price-to-sales ratio: 1.5; Dividend yield: 5.2%; TSINetwork Rating: Average; www.mts.ca) recently agreed to sell its Allstream subsidiary to Accelero Capital Holdings, a private firm controlled by Egyptian billionaire Naguib Sawiris.

In 2004, the company paid $1.6 billion for Allstream, which provides integrated telephone, Internet and other communication services to over 50,000 businesses across Canada.

The sale price is $520 million. If you disregard various closing costs, Manitoba Telecom will receive $405 million. The company expects to close the deal by the end of 2013.
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CANADIAN IMPERIAL BANK OF COMMERCE $82 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 400.0 million; Market cap: $32.8 billion; Price-to-sales ratio: 1.9; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.cibc.com) earned a record $943 million in its fiscal 2013 third quarter, which ended July 31, 2013. That’s up 8.9% from $866 million a year earlier. Earnings per share rose 11.2%, to $2.29 from $2.06, on fewer shares outstanding. Revenue gained 3.6%, to $3.3 billion from $3.15 billion.

Low interest rates continue to spur loan demand at CIBC’s retail banking division. As well, acquisitions pushed up earnings at its wealth management business. Earnings at its security-trading operations also improved thanks to higher trading volumes. However, loan-loss provisions rose 0.9%, to $320 million from $317 million, partly to cover potential losses caused by flooding in Alberta.

The bank also announced that it plans to buy back 2% of its outstanding shares over the next year.
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TELUS CORP. $33 (Toronto symbol T; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 645.7 million; Market cap: $21.3 billion; Price-to-sales ratio: 2.0; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.telus.com) moved up on news that U.S.-based Verizon Communications (New York symbol VZ) is buying the 45% of the Verizon Wireless joint venture that it does not already own from U.K.-based Vodafone Group (Nasdaq symbol VOD). Verizon Wireless has 100.1 million subscribers in the U.S. In the wake of the this deal, Verizon announced that it would not enter Canada’s wireless market at this time.

Ottawa still plans to set aside wireless spectrum for new entrants at an auction in January 2014. That could encourage other foreign carriers besides Verizon to expand into Canada. Telus gets a high 53% of its revenue and 67% of its earnings from wireless, so it’s particularly vulnerable to new competition. As well, new regulations that limit roaming charges and let customers cancel their contracts early could dampen the company’s earnings growth.

Telus is still a hold.

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