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Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific investment advice. Each Investor Toolkit update gives you a fundamental piece of strategy, such as stock trading advice, and shows you how you can put it into practice right away....

H&R REIT (Toronto symbol HR.UN; www.hr-reit.com) owns stakes in 41 office buildings, 112 industrial properties and 163 shopping malls in Canada, principally in the Greater Toronto Area. In the past two years it also added two major purchases in the U.S: Two Gotham Center in New York and the Hess Tower in Houston. The trust has a 99.0% occupancy rate....

Agilent is up 9.5% since it was spun off from its parent company 14 years ago. We take a look at the outlook for this tech stock which bases its growth on an aggressive acquisition strategy. AGILENT TECHNOLOGIES INC. (New York symbol A; www.agilent.com) makes testing systems that help electronics firms improve their products. It also manufactures testing gear for medical research labs. Agilent was a unit of Hewlett-Packard until 1999, when Hewlett spun it off as a separate firm....

Pat McKeough responds to many requests for advice on specific stock picks and other questions on investment and the economy from the members of his Inner Circle. 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. This week, an Inner Circle member asked about a stock that has risen sharply this year. AutoCanada’s franchise car dealerships have profited from robust car sales and the company continues to expand. Pat looks at whether AutoCanada can sustain its growth and also measures the risk of its growth-by-acquisition strategy....

CANADIAN PACIFIC RAILWAY LTD. (Toronto symbol CP; www.cpr.ca) fell almost 7% this week after activist investor Pershing Square Capital Management L.P. announced that it will sell 7 million of its CP shares over the next year. Pershing currently holds 24 million CP shares, or 14.2% of the total outstanding. In June 2012, Pershing helped install Hunter Harrison as CP’s chief executive officer. Mr. Harrison is the former CEO of Canadian National Railway Co. (Toronto symbol CNR)....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning 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....

TEMPUR-PEDIC $44.72 (New York symbol TPX; TSINetwork Rating: Speculative) (800-878-8889; www.tempurpedic.com; Shares outstanding: 60.3 million; Market cap: $2.8 billion; No dividends paid) is changing its name to Tempur Sealy International. Its stock will continue to trade under the TPX symbol.

Tempur-Pedic completed its $1.3-billion purchase of rival Sealy Corp. in March 2013. This was a major acquisition for Tempur-Pedic, but it lets the company diversify into the market for traditional spring-coil beds. That should help it offset rising competition in its current business.

The company makes and distributes Swedish mattresses and neck pillows made from its proprietary Tempur material, which conforms to the body to provide support and help alleviate pressure points. Simmons Bedding Co. and Serta Inc. have both successfully launched memory-foam mattresses that directly compete with Tempur-Pedic’s products.
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INTUITIVE SURGICAL $510 (Nasdaq symbol ISRG; TSINetwork Rating: Average) (515-507-5000; www.intuitivesurgical.com; Shares outstanding: 40.2 million; Market cap: $20.5 billion; No dividends paid) makes the da Vinci, a computerized surgical system.

Guided by a miniature camera connected to a 3-D monitor, surgeons use the da Vinci to operate by remotely manipulating tiny robotic arms. This process is safer and much less invasive than regular surgery. It helps cut patient recovery time and post-operative discomfort. It also reduces scarring and infection risk.

In the three months ended March 31, 2013, Intuitive earned $188.9 million, or $4.56 a share. That’s up 31.6% from $143.5 million, or $3.50 a share, a year earlier. Revenue rose 23.5%, to $611.4 million from $495.2 million. Intuitive is debt-free and holds cash of $3.1 billion, or $77.51 a share.
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AMAZON.COM $278.16 (Nasdaq symbol AMZN; TSINetwork Rating: Extra Risk) (206- 266-1000; www.amazon.com; Shares outstanding: 455.2 million; Market cap: $128.3 billion; No dividends paid) has invested heavily in cloud computing. This is now paying off with some big contracts: earlier this year, it won a $600-million deal with the U.S. Central Intelligence Agency to build a cloud-computing service.

The CIA has traditionally awarded many of its big computing contracts to IBM (New York symbol IBM), a recommendation of our Wall Street Stock Forecaster newsletter.

IBM has protested the awarding of this deal to Amazon, and the U.S. Government Accountability Office recently recommended that the CIA reopen negotiations. The CIA now has 60 days to say whether it will follow this recommendation.
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FIRSTSERVICE CORP. $31.20 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.9 million; Market cap: $1.0 billion; No dividends paid) is expanding further into Western Europe through its Colliers International commercial real estate sales division. Colliers has just acquired controlling interests in two firms in Germany and one in the Netherlands. All are leaders in their respective markets.

European real estate markets have weakened along with the region’s economies, and now is a good time to make acquisitions.

FirstService is a hold....

BIRCHCLIFF ENERGY $8.34 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Units outstanding: 142.2 million; Market cap: $1.2 billion; No dividends paid) develops, produces and explores for oil and natural gas, mainly in the Peace River Arch area near the Alberta/B.C. border.

In the three months ended March 31, 2013, the company produced an average of 26,108 barrels of oil equivalent a day (82% gas and 18% oil). That was up 24.0% from 21,061 barrels a year earlier. The production increase pushed up Birchcliff’s cash flow per share by 33.3%, to $0.28 from $0.21.

Last year, Birchcliff completed Phase III of its gas plant expansion in Pouce Coupe, Alberta. This project doubled the facility’s capacity and is helping the company bring the additional gas it is producing to market.
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WESTJET AIRLINES $22.46 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 121.9 million; Market cap: $3.0 billion; Dividend yield: 1.8%) reports that its load factor fell slightly in May 2013, to 78.5% from 79.2% a year earlier. Load factor is the percentage of available seats that are occupied by paying passengers.

However, the decline was only slight, even though the company increased its capacity by 9.1% to meet higher demand. Revenue passenger miles (the total number of paying passengers on each plane multiplied by the distance travelled in miles) rose 8.2% in the latest quarter.

Demand for the company’s flights remains high, and it has entered into new partnerships with other airlines; these were the main reasons for the increased number of passengers.
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WAJAX CORP. $32.54 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212- 3300; www.wajax.ca; Shares outstanding:16.7 million; Market cap: $528.7 million; Dividend yield: 7.4%) sells and services cranes, forklifts and other heavy equipment. It also sells related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions).

In the quarter ended March 31, 2013, Wajax’s revenue fell 6.1%, to $336.3 million from $358.1 million a year earlier. Earnings per share fell 39.8%, to $0.62 from $1.03.

The declines mostly came from reduced activity in the western Canadian oil and gas industry, which hurt results at Wajax’s power systems business. Lower mining equipment sales more than offset strength in the forestry and construction markets.
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ENERFLEX LTD., $13.66 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 77.9 million; Market cap: $1.1 billion; Dividend yield: 2.1%) 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 production; 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 March 31, 2013, Enerflex’s revenue fell slightly, to $353.3 million from $355.7 million a year ago. Lower revenue in Canada and the northern U.S. offset increases from producers in the southern U.S., Latin America and overseas. Earnings per share rose 5.3%, to $0.20 from $0.19, due to improved profit margins.
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TOROMONT INDUSTRIES LTD. $22.58 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667- 5511; www.toromont.com; Shares outstanding: 76.6 million; Market cap: $1.7 billion; Dividend yield: 2.3%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. Toromont also makes refrigeration systems through its CIMCO division.

The company completed the spinoff of Enerflex Ltd. (see below) in July 2011. Shareholders received shares of the new Toromont and shares of Enerflex.

In the three months ended March 31, 2013, higher equipment sales and rentals, particularly to mining customers, pushed up Toromont’s revenue by 11.3%, to $313.1 million from $281.5 million a year earlier.
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COMPUTER MODELLING GROUP $23.05 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 38.2 million; Market cap: $887.4 million; Dividend yield: 3.1%) reported revenue of $19.3 million in the three months ended March 31, 2013. That’s up 12.0% from $17.2 million a year earlier.

Earnings rose 9.6%, to $7.3 million from $6.6 million. Per-share earnings rose 5.6%, to $0.19 from $0.18, on more shares outstanding.

Computer Modelling holds cash of $59.4 million, or $1.56 a share, and has no debt. It spent $3.5 million, or a high 18.0% of its revenue, on research and development in the latest quarter.
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CIMAREX ENERGY $71.16 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 86.5 million; Market cap: $6.3 billion; Dividend yield: 0.8%) produces and explores for natural gas and oil. Gas makes up 49% of its output.

Cimarex’s properties are in the Mid-Continent region of the U.S., which includes Oklahoma, Kansas and Texas (55% of production); the Permian Basin of western Texas and southeastern New Mexico (42%); and the Texas Gulf Coast (3%).

In the three months ended March 31, 2013, Cimarex’s production averaged 661.1 million cubic feet of natural gas equivalent per day (including oil). That’s up 9.5% from 603.5 million cubic feet a year earlier. Thanks to the higher production, Cimarex’s cash flow per share fell just 4.2%, to $3.38 from $3.53, despite lower oil prices.
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DEVON ENERGY CORP. $54.13 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235- 3611; www.dvn.com; Shares outstanding: 406.0 million; Market cap: $22.5 billion; Dividend yield: 1.6%) is one of the largest U.S.-based oil and natural gas explorers and producers. Its production mix is 59% gas and 41% oil.

In 2011, Devon sold all of its international and Gulf of Mexico properties, which it saw as risky and expensive to develop. The company is now focused on its North American projects, which include conventional production, shale oil in Texas and oil sands in Alberta.

Devon has formed joint ventures to cut the risk of its big development projects. Last year, it sold a onethird stake in five shale oil and gas fields to giant Chinese state-owned petroleum and chemical company Sinopec for $2.2 billion. As well, Japan’s Sumitomo Corp. bought 30% of the Cline and Wolfcamp shales in Texas for $1.4 billion.
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ADOBE SYSTEMS $45.78 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536 -6000; www.adobe.com; Shares outstanding: 501.9 million; Market cap: $21.8 billion; No dividends paid) has paid an undisclosed sum for Ideacodes. This privately held firm helps businesses make their mobile software, or apps, and other online content look and perform better.

Ideacodes’ technology will enhance Adobe’s new Creative Cloud suite of publishing and photo-editing programs. Adobe has switched from selling packaged software on CDs to offering ongoing subscriptions online.

Ideacodes’ founders, Emily Chang and Max Kiesler, will join Adobe as Creative Cloud’s new creative directors.
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ACI WORLDWIDE $44.92 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 39.8 million; Market cap: $1.8 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 mid-February 2012, ACI completed its $540- million purchase of S1 Corp. This acquisition has been a good fit: S1 sells transaction software for banks, credit unions, retailers and other payment processors. It has over 3,000 clients worldwide.

In the three months ended March 31, 2013, ACI’s revenue rose 17.7%, to $162.0 million from $137.6 million a year earlier. The rise was partly because S1 contributed for the full quarter, compared to half of the 2012 first quarter.
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SYMANTEC CORP. $22.70 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 696.6 million; Market cap: $15.8 billion; Dividend yield: 2.6%) sells computer security technology, including anti-virus and emailfiltering software, to businesses and consumers. It also offers data-archiving software.

In its fiscal 2013 third quarter, which ended March 29, 2013, Symantec’s earnings per share rose 15.8%, to $0.44 from $0.38 a year earlier. Revenue gained 4.4%, to $1.75 billion from $1.68 billion.

The company is poised to keep reporting higher earnings as its new restructuring plan takes effect.
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AEROPOSTALE INC.$13.75 (New York symbol ARO; TSINetwork Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding: 78.5 million; Market cap: $1.1 billion; No dividends paid) saw its sales fall 9.0% in the three months ended May 4, 2013, to $452.3 million from $497.2 million a year earlier. Samestore sales declined 14%.

The teen-clothing retailer lost $0.16 a share, compared to a year-ago profit of $0.13 a share. Aeropostale had to spend heavily on promotions and marketing to clear out inventory from the preceding quarter.

The company will likely be able to repeat its past success at attracting customers, but its sales may remain weak in the near term.
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LEON’S FURNITURE LTD. $12.97 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 70.6 million; Market cap: $897.5 million; Dividend yield: 3.1%) built its 75-store 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.

In the three months ended March 31, 2013, Leon’s sales rose 3.2%, to $162.5 million from $157.4 million a year earlier. However, earnings fell 36.9%, to $5.4 million, or $0.08 a share. A year earlier, it earned $8.6 million, or $0.12 a share. The decline mostly resulted from costs related to its $700-million purchase of The Brick, which closed on March 28, 2013.

The Brick operates 234 stores across Canada, while Leon’s has 75 outlets in every province except British Columbia. Leon’s and The Brick will continue to operate as separate chains.
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REITMANS (CANADA) LTD. $8.45 (Toronto symbol RET.A; TSINetwork Rating: Extra Risk) (514-384- 1140; www.reitmans.com; Shares outstanding: 64.6 million; Market cap: $544.7 million; Dividend yield: 9.5%) owns 909 women’s clothing stores across Canada.

The chain consists of 359 Reitmans, 145 Smart Set, 157 Penningtons, 103 Addition Elle, 72 Thyme Maternity and 73 RW & Co. stores. In addition, it has 20 Thyme Maternity boutiques in some Canadian Babies “R” Us locations, as well as 154 in U.S. Babies “R” Us stores.

In the three months ended May 4, 2013, Reitmans’ sales fell slightly, to $216.9 million from $217.1 million a year earlier. However, same-store sales declined 3.5%.
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NEW GOLD $6.63 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 476.9 million; Market cap: $3.2 billion; No dividends paid) has just agreed to buy Rainy River Resources (Toronto symbol RR) in a friendly takeover for $381.9 million.

Rainy River’s project in northwestern Ontario could hold as much as 4.0 million ounces of gold. The company has already completed a feasibility study that projects a mine producing 225,000 ounces annually for 16 years. Production could start as early as 2016.

New Gold produced 411,892 ounces of gold in 2012. That could top 1 million ounces within six years, even without Rainy River.

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