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CANADIAN PACIFIC RAILWAY $151.56 (Toronto symbol CP; Shares outstanding: 175.1 million; Market cap: $26.4 billion; TSINetwork Rating: Average; Dividend yield: 0.9%; www.cpr.ca), transports freight between Montreal and Vancouver and connects with hubs in the U.S. Midwest and northeast.

In the quarter ended September 30, 2013, CP’s revenue rose 5.7%, to $1.53 billion from $1.45 billion a year earlier. Earnings jumped 144.7%, to $331 million, or $1.88 a share, from $224 million, or $1.31.

CP’s operating ratio improved to 65.9% from 74.1% a year ago. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.) The company shipped more goods and made better use of its assets in the latest quarter. CEO Hunter Harrison feels he can cut CP’s operating ratio even further.
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ENCANA CORP. (Toronto symbol ECA; www.encana.com) is one of North America’s largest natural gas producers. The company is now cutting its reliance on natural gas, as rising shale gas production has cut prices from $11.50 U.S. per thousand cubic feet in 2008 to just $3.60 U.S. today. Encana plans to narrow 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)....

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 investment advice. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “The best analyst research reports are full of valuable data, but that alone doesn’t mean investors should fall in line with their buy, hold or sell recommendations.”...

WAJAX CORP. (Toronto symbol WJX; www.wajax.ca) sells and services cranes, forklifts and other heavy equipment. It also provides related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions). Wajax operates through 128 dealerships across Canada. Its customers are in the natural resource, construction, manufacturing, industrial processing and transportation industries....

THOMSON REUTERS CORP. (Toronto symbol TRI; www.thomsonreuters.com) gets 55% of its revenue by selling news and information to professionals in the banking industry. The remaining 45% comes from providing specialized information products to clients in the legal, accounting and scientific research fields....

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....

BELL ALIANT INC. (Toronto symbol BA; www.aliant.ca) sells phone and Internet services to 2.5 million customers in Atlantic Canada and rural Ontario and Quebec. It also provides wireless services through an alliance with BCE, which owns 45% of Bell Aliant....

When you know what to look for with these 3 financial ratios, you improve your chances of uncovering the best value stocks. Price-earnings ratios, Price-to-book-value ratios, Price-cash flow ratios.

Oil prices have soared from around $18 U.S. a barrel in 1993 to close to $100 U.S. today. However, new drilling technologies have made it easier to extract oil from hard-to-reach deposits, such as oil sands and shale rock formations. Rising production from these sources could hurt oil prices in the same way the shale gas boom has depressed natural gas prices....

Certain technology firms have dominated their markets for years, only to discover that changing consumer tastes and business trends have hurt their recent growth....

GENERAL ELECTRIC CO. $27 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.2 billion; Market cap: $275.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.ge.com) plans to spin off its North American retail finance business as a separate company.

This business, part of its GE Capital subsidiary, provides credit card loans through a variety of retailers, such as Wal-Mart and J.C. Penney. It also loans money directly to consumers. GE will hang on the international portion of the retail finance business.

The spinoff is part of the company’s plan to cut GE Capital’s assets to half of what they were prior to the 2008 financial crisis.

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CHEVRON CORP. $122 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.9 billion; Market cap: $231.8 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.chevron.com) has suspended work on its $10-billion Rosebank offshore oil project in the North Sea due to rising costs. Chevron owns 40% of this project. The company and its partners will make a decision on whether to proceed with Rosebank by late 2014.

Meanwhile, the company recently began pumping oil at its Papa-Terra offshore platform near Brazil. Chevron owns 37.5% of this operation, while Petroleo Brasileiro S.A. (New York symbol PBR) owns the remaining 62.5%.

Papa-Terra should produce 140,000 barrels a day by the end of 2014. Chevron’s share of 52,500 barrels is equal to 2% of its current daily output.

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SONY CORP. ADRs $19 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $19.0 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.4%; TSINetwork Rating: Average; www.sony.com) now plans to make fewer than 20 movies a year, down from around 23 in previous years. That’s due to big losses on films like White House Down and After Earth.

Instead, the company plans to expand its better-performing television production business. Sony currently produces 38 series, including popular shows like Breaking Bad and The Blacklist.

Making TV shows is less expensive than feature films, which lowers risk and enhances potential profit.

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INTERNATIONAL FLAVORS & FRAGRANCES INC. $88 (New York symbol IFF; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.5 million; Market cap: $7.2 billion; Price-to-sales ratio: 2.5; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.iff.com) produces compounds that improve the taste of food and make consumer products smell better.

The company continues to benefit from rising demand in fast-growing markets like China, India and Turkey. In the three months ended September 30, 2013, sales in these countries rose 8% and now supply 48% of IFF’s total. That helped push up the company’s overall sales by 4.7% in the quarter, to $742.3 million from $709.0 million a year earlier. Earnings per share gained 13.0%, to $1.22 from $1.08.

IFF is a buy.

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GENERAL MILLS INC. $51 (New York symbol GIS, Conservative Growth Portfolio, Consumer sector; Shares outstanding: 634.3 million; Market cap: $31.6 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.generalmills.com) expects costs for ingredients like wheat and corn to rise 3% in its 2014 fiscal year, which ends May 24, 2014. It is also spending more to develop new foods, like gluten-free cereals.

However, cost controls should help offset these increases. As a result, General Mills still expects to earn $2.87 to $2.90 a share in fiscal 2014. The stock trades at a reasonable 17.7 times the midpoint of that range.

General Mills is a buy.

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DIEBOLD INC. $34 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 63.8 million; Market cap: $2.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.4%; TSINetwork Rating: Average; www.diebold.com) has cut jobs and sold two plants in response to slowing ATM sales in the U.S. These moves should cut its annual costs by $100 million to $150 million by the end of 2015. In the quarter ended September 30, 2013, Diebold lost $0.34 a share, compared to a profit of $0.25 a share a year earlier. Without unusual items, earnings per share jumped 51.4%, to $0.56 from $0.37.

Revenue fell 0.6%, to $705.4 million from $709.9 million. The company continues to see strong ATM demand from banks in Latin America and Asia, which is helping offset weaker sales in the U.S.

The company’s earnings should rise 29.6%, from a projected $1.35 a share in 2013 to $1.75 in 2014. The stock trades at a somewhat high 19.4 times the 2014 estimate. However, that’s still reasonable, particularly as Diebold continues to expand in developing markets. As well, it now gets half of its revenue from recurring software upgrades and other services. The $1.15 dividend still seems safe and yields 3.4%.

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AGILENT TECHNOLOGIES INC. $54 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 333.0 million; Market cap: $18.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.0%; TSINetwork Rating: Average; www.agilent.com) plans to break itself into two publicly traded companies. One of these businesses will keep the Agilent name and focus on testing equipment for medical-research labs.

In the parent company’s 2013 fiscal year, which ended October 31, 2013, the division that will form this new firm saw its sales rise 9.9%, to $3.9 billion from $3.5 billion in fiscal 2012. That’s mainly due to strong demand from pharmaceutical makers, and rising sales of gear for testing food safety in China and other developing countries. This company will pay a dividend comparable to Agilent’s current 1.0% yield.

The second company will make testing systems for improving electronics, such as cellphones and computer equipment. Its fiscal 2013 revenue fell 12.9%, to $2.9 billion from $3.3 billion. That’s partly because U.S. budget cuts hurt demand from aerospace and defence clients. However, new testing systems for wireless networks should boost this firm’s revenue in fiscal 2014. This second firm will not pay a dividend, at least initially.

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MOTOROLA SOLUTIONS INC. $66 (New York symbol MSI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.7 million; Market cap: $17.1 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.9%; TSINetwork Rating: Average; www.motorolasolutions.com) makes bar-code scanners and radios for police and fire vehicles.

In the third quarter of 2013, overall sales fell 1.9%, to $2.11 billion from $2.15 billion a year earlier. That’s partly due to the recent federal government shutdown: sales to government clients (which account for 69% of Motorola Solutions’ total sales) declined 3.7%. However, sales to businesses (31%) rose 2.4%.

The company’s new restructuring plan, which includes closing some plants and cutting jobs, should save it $50 million a year by the end of 2014. It is already realizing some of these savings, which helped increase its earnings by 49.0% in the latest quarter, to $307 million from $206 million. Per-share earnings gained 61.1%, to $1.16 from $0.72, on fewer shares outstanding. Without unusual items, earnings per share rose 57.1%, to $1.32 from $0.84.

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PETSMART INC. $74 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 103.9 million; Market cap: $7.7 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.petm.com) operates 1,314 pet stores in the U.S. and Canada. It also has 196 in-store PetsHotels, which look after animals while their owners are away.

In the third quarter of its 2014 fiscal year, which ended November 3, 2013, PetSmart’s earnings rose 12.0%, to $92.2 million from $82.3 million a year earlier. The company bought back $30 million of its shares during the quarter. Due to fewer shares outstanding, earnings per share rose 17.3%, to $0.88 from $0.75.

Sales rose 4.0%, to $1.7 billion from $1.6 billion. Same-store sales gained 2.7%, while sales of pet services, such as grooming and training, rose 5.2%. Services accounted for 10.9% of PetSmart’s total sales.

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JONES GROUP INC. $14 (New York symbol JNY; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 79.7 million; Market cap: $1.1 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.4%; TSINetwork Rating: Average; www.jonesgroupinc.com) designs clothing, accessories and footwear for men and women. Its major brands include Jones New York, Gloria Vanderbilt, Rachel Roy, Anne Klein and Nine West. Jones sells its products through department stores and 543 company-owned outlets.

In the three months ended October 5, 2013, Jones’s sales fell 1.3%, to $1.02 billion from $1.03 billion a year earlier. Weaker-than-expected back-to-school sales forced many of Jones’s U.S. department store clients to cut their prices to clear unsold merchandise.

Earnings fell 17.0%, to $35.6 million from $42.9 million. Due to fewer shares outstanding, earnings per share declined 15.8%, to $0.48 from $0.57.

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NORDSTROM INC. $63 (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 197.0 million; Market cap: $12.4 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.9%; TSINetwork Rating: Average; www.nordstrom.com) mainly sells upscale clothing, accessories and footwear. The company owns and operates 261 stores in 35 states.

In the third quarter of its 2014 fiscal year, which ended November 2, 2013, Nordstrom’s sales rose 2.8%, to $2.9 billion from $2.8 billion a year earlier.

Same-store sales rose just 0.1%. That’s mainly because the company’s popular anniversary sale occurred in the second quarter of fiscal 2014, but straddled the second and third quarters a year earlier. If you adjust for this, same-store sales rose 2.4%.

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L BRANDS INC. $65 (New York symbol LB (old symbol LTD); Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 289.9 million; Market cap: $18.8 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.8%; TSINetwork Rating: Average; www.limitedbrands.com) owns 1,096 Victoria’s Secret lingerie stores and 1,645 Bath & Body Works personal care products outlets. Smaller chains include 157 La Senza (lingerie) locations in Canada and 29 Henri Bendel (jewellery) stores in the U.S.

The company continues to see strong demand for its Victoria’s Secret Pink clothing line for younger women. In the current fiscal year, L Brands plans to open 50 new stand-alone Pink stores, while it continues to expand the brand in its existing outlets.

Currently, 25% of Victoria’s Secret stores carry the full Pink assortment. New soaps and home fragrances are also fueling sales at Bath & Body Works.

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MACY’S INC. $54 (New York symbol M, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 376.2 million; Market cap: $20.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.9%; TSINetwork Rating: Average; www.macysinc.com) operates 840 Macy’s and Bloomingdale’s department stores in 45 states.

In the third quarter of its 2014 fiscal year, which ended November 2, 2013, Macy’s sales rose 3.3%, to $6.3 billion from $6.1 billion a year earlier. Same-store sales— which include online orders— gained 3.5%. If you include commissions from areas of its stores that Macy’s licenses to other sellers, same-store sales would have risen 4.6%.

Earnings jumped 22.1%, to $177 million from $145 million. The company spent $447 million on share buybacks during the quarter. As a result, its per-share earnings rose at a faster rate of 30.6%, to $0.47 from $0.36.

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WAL-MART STORES INC. $81 (New York symbol WMT; Conservative Growth Portfolio: Consumer sector; Shares outstanding: 3.3 billion; Market cap: $267.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.walmart.com) earned $3.9 billion in its fiscal 2014 third quarter, which ended October 31, 2013. That’s up 1.6% from $3.8 billion a year earlier. Per-share earnings gained 6.5%, to $1.14 from $1.07, on fewer shares outstanding.

Overall sales rose 1.7%, to $115.7 billion from $113.8 billion. Sales at the company’s U.S. stores, which supply 59% of the total, increased 2.4%. However, same-store sales fell 0.3%, as shoppers lowered their spending due to high unemployment and uncertainty over future health insurance premiums in the wake of the Affordable Care Act (or Obamacare).

However, sales at the international stores (29% of the total) gained 4.1%, excluding exchange rates. New locations in fast-growing markets like China and Africa should continue to offset slower sales in the U.S. Moreover, Wal-Mart could unlock some of its value by spinning off its Sam’s Club warehouse outlets (12%). This chain’s sales rose 1.1% in the latest quarter.

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TUPPERWARE BRANDS CORP. $92 (New York symbol TUP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 50.7 million; Market cap: $4.7 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) gets about 70% of its sales by making high-quality products for the home, mainly plastic food and beverage containers. The remaining 30% comes from its beauty-products division, which makes a wide range of cosmetics, bath oils and fragrances. This division also makes related products like jewellery and bed linens.

The company’s main brands include Tupperware, Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics and Nuvo. International markets supply 90% of its sales.

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