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CHESAPEAKE ENERGY $21.75 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848- 8000; www.chkenergy.com; Shares outstanding: 666.5 million; Market cap: $14.5 billion; Dividend yield: 1.6%) is the second-largest natural gas producer in the U.S.

Chesapeake continues to sell assets to meet its debt-reduction targets—it’s now selling properties in the Eagle Ford and Haynesville shale formations to Exco Resources for $1 billion.

With this deal, Chesapeake has now sold $3.6 billion of properties this year. By the end of 2013, it aims to raise that to $6 billion to $7 billion. These sales, plus its cash flow from production, will let it pay for its planned 2013 exploration and development spending of $7.6 billion.
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AIMIA INC. $15.12 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 172.5 million; Market cap: $2.6 billion; Dividend yield: 4.5%) owns and operates Aeroplan, Canada’s largest loyalty program, with over 4.6 million members. It also owns Nectar, the U.K.’s biggest loyalty program. In addition, Aimia has interests in Air Miles Middle East and Nectar Italia, as well as Club Premier, the leading loyalty program in Mexico.

In the three months ended March 31, 2013, Aimia’s revenue rose 7.4%, to $609.5 million from $567.7 million a year earlier. Excluding one-time items, earnings per share fell 12.9%, to $0.27 from $0.31. The earnings decline was due to an increase in the company’s cost per mile, mostly because its expenses rose as it expanded its operations.

TD Bank has just agreed to become the main credit card issuer for Aeroplan. Under a new 10-year deal that will begin January 1, 2014, TD will launch new credit cards under the Aeroplan banner, including cards for frequent flyers and small businesses. TD will also pay Aimia $100 million at the start of the deal and commit to buying a minimum number of Aeroplan miles from Aimia for the first three years. In addition, the partners will spend a total of $140 million in the first four years to promote these new cards and rewards.
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TRANSCONTINENTAL INC. (Toronto symbol TCL.A; www.tctranscontinental.com) gets 68% of its revenue from its commercial printing business, which is the largest in Canada. The remaining 32% comes from publishing newspapers and magazines. In its 2013 second quarter, which ended April 30, 2013, Transcontinental’s revenue fell 0.2%, to $521.3 million from $522.4 million a year earlier. Revenue from six recently acquired printing plants in Canada helped offset the loss of a contract to print flyers for the now-closed Zellers retail chain....

U.S. oil production is up 40% since 2008. That’s largely because of new technologies like hydraulic fracturing, or fracking. This involves injecting water, sand and chemicals to break up shale and other tight rock formations and allow access to the oil and gas. The best way to profit from this volatile industry is through companies with high-quality reserves and diverse operations. Here is one of the diversified U.S. energy stocks we cover regularly....

The beginning of the summer holiday is a good time to defuse one of the predominant fears of stock market investing, market risk. While it pays to stay aware of market risk, you should never let it become an obsession. All investors need to recognize that stock prices do sometimes reach a market peak or ‘top’, then go into a slump. However, some investors and advisors make a career out of analyzing past market tops, especially those that were followed by deep declines....

LOBLAW COMPANIES $48.89 (Toronto symbol L; Shares outstanding: 282.1 million; Market cap: $13.9 billion; TSINetwork Rating: Above Average; Dividend yield: 2.0%; www.loblaw.ca) has announced more details of its upcoming plan to set up 75% of its real estate holdings as a publicly traded real estate investment trust (REIT).

The company will transfer 425 properties, including 415 stores, nine warehouses and one office building, to a new entity called Choice Properties Real Estate Investment Trust. Following the transfer, Loblaw will rent the properties from this new trust. Loblaw will be the REIT’s main tenant, accounting for roughly 90% of its rental income. Its leases range from 10 to 18 years.

Choice Properties will sell units to the public, probably in the next month or two, at a yet-to-be-disclosed price. Loblaw will hang on to a majority stake.
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CANADIAN REIT $42.88 (Toronto symbol REF.UN; Units outstanding: 68.4 million; Market cap: $2.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.9%; www.creit.ca) owns over 192 properties, including retail, industrial and office buildings, across Canada and in Chicago. These holdings contain over 19.7 million square feet of leasable area. The trust’s occupancy rate is 94.9%.

In the three months ended March 31, 2013, Canadian REIT’s revenue rose 8.9%, to $91.4 million from $83.9 million a year earlier. Cash flow per unit rose 6.3%, to $0.68 from $0.64.

Canadian REIT added just $11.3 million of new properties in the latest quarter. However, it bought $401.9 million of buildings in 2012. That includes a 50% stake in Calgary Place, a 575,000-square-foot office and retail complex, for $156.0 million.
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H&R REIT $22.11 (Toronto symbol HR.UN; Units outstanding: 258.3 million; Market cap: $16.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.8%; www.hr-reit.com) owns stakes in 40 office buildings, 112 industrial properties and 163 shopping malls across Canada. The trust has a 99.0% occupancy rate.

In the three months ended March 31, 2013, the REIT’s revenue rose 21.2%, to $222.6 million from $183.0 million a year earlier. Cash flow rose 24.3%, to $90.0 million from $72.4 million. Cash flow per unit gained 12.5%, to $0.45 from $0.40, on more units outstanding.

In March 2013, H&R finished building The Bow, a $1.33-billion, two-million-square-foot office building in Calgary. Encana Corp. has already leased the entire building for 25 years.
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ISHARES AUSTRALIA INDEX FUND $23.84 (New York symbol EWA; buy or sell through brokers) is an ETF that holds the 70 largest Australian stocks. Its MER is 0.50%.

The fund’s top holdings include BHP Billiton, 10.8%; Commonwealth Bank of Australia, 10.6%; Westpac Banking Corp., 8.9%; Australia and New Zealand Banking Group, 7.5%; National Australia Bank, 6.8%; Woolworths, 4.0%; Wesfarmers, 3.9%; CSL Ltd., 2.9%; Westfield Group, 2.4%; and Woodside Petroleum, 2.3%.

Australia benefits from its stable banking and political systems. It is also rich in natural resources, and it’s close to key Asian markets with vast potential, including India and China.
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TRANSCANADA CORP. $46.23 (Toronto symbol TRP; Shares outstanding: 707.0 million; Market cap: $33.5 billion; TSINetwork Rating: Above Average; Dividend yield: 4.0%; www.transcanada.com) plans to build a new 200-kilometre crude oil pipeline that will connect Edmonton to the storage hub at Hardisty, Alberta. From there, TransCanada will pump the oil to refineries in the U.S. Midwest through its Keystone pipeline (and link up later with its Keystone XL pipeline if it’s built).

The $900-million project also includes a new oil-storage facility. The company already has long-term contracts from producers, which cuts the risk of this investment. The new line should begin operating in the second half of 2015.

TransCanada is a buy....

IBM $202.74 (New York symbol IBM; Shares outstanding: 1.1 billion; Market cap: $228.6 billion; TSINetwork Rating: Above Average; Dividend yield: 1.9%) is paying an undisclosed sum for SoftLayer Technologies, which sells online data storage space and related services to over 21,000 businesses. SoftLayer has 13 data centres in the U.S., Asia and Europe.

Demand for cloud-computing, which mainly involves storing data and using software on remote servers, is growing strongly. That’s because it gives cost-conscious companies access to better software and services without the high cost of setting up their own servers.

SoftLayer’s technology will enhance IBM’s expertise in this expanding market.
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ISHARES MSCI BRAZIL INDEX FUND $50.15 (New York Exchange symbol EWZ; buy or sell through brokers) is an exchange traded fund that is designed to track the Brazilian stock market. The fund’s top holdings are Petrobras (oil and gas), 12.7%; Vale do Rio Doce (mining), 8.4%; Cia Itau Unibanco Holding (banking), 7.4%; Banco Brandesco (banking) preferred, 6.5%; Cia de Bebidas das Americas (beer and beverages), 5.5%; and BRF SA (food), 3.6%.

The ETF was launched on July 10, 2000. It has an expense ratio of 0.60%.

The fund’s focus on the resource sector and its concentration in certain stocks, such as Petrobras and Vale do Rio Doce, add risk. However, both are high-quality stocks.
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ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $56.48 (New York Exchange symbol ECH; buy or sell through brokers) is an ETF that aims to track the MSCI Chile Investable Market Index, which consists of stocks that are mainly traded on the Santiago Stock Exchange.

The fund’s top holdings are Enersis AS (electricity), 8.0%; Empresas Copec SA (conglomerate), 7.4%; Cencosud SA (retailer), 7.2%; S.A.C.I. Falabella (retail), 6.6%; Empresa Nacional de Electricidad (electricity), 6.2%; LATAM Airlines SA, 5.7%; Quimica y Minera de Chile (mining), 5.0%; Banco Santander Chile (banking), 4.4%; and Empresas CMPC (pulp and paper), 3.9%.

The fund’s industry breakdown is: Utilities, 24.8%; Financials, 17.2%; Consumer Staples, 13.6%; Materials, 12.6%; Industrials, 9.3%; Consumer Discretionary, 8.3%; Energy, 7.4%; Telecommunications, 3.2%; and Information Technology, 2.5%.
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ISHARES MSCI GERMANY FUND $25.89 (New York Exchange symbol EWG; buy or sell through brokers) tracks the stocks in the MSCI Germany Index. This index aims to replicate 85% of the total market capitalization of the German stock market. The remaining 15% is unavailable for investment, partly due to limitations on foreign ownership.

The ETF’s top holdings are BASF (chemicals), 8.7%; Siemens (engineering conglomerate), 8.6%; Bayer (diversified chemicals), 8.6%; Allianz (insurance), 6.9%; SAP (software), 6.7%; Daimler (autos), 5.7%; Deutsche Bank, 4.6%; Linde AG (industrial gases), 3.5%; and Munich Re (reisurance), 3.3%.

The fund’s industry breakdown is as follows: Consumer Discretionary, 19.3%; Financials, 17.2%, Materials, 15.4%; Industrials, 13.7%; Health Care, 13.1%; Information Technology, 7.9%; Utilities, 4.7%; Consumer Staples, 4.3%; and Telecommunication Services, 3.1%.
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ISHARES MSCI SOUTH KOREA INDEX FUND $57.12 (New York Exchange symbol EWY; buy or sell through brokers) is an exchange traded fund that aims to track the MSCI Korea Index.

The ETF’s top holdings are Samsung Electronics, 23.1%; Hyundai Motor Co., 5.3%; Posco (steel), 3.4%; Hyundai Mobis (auto parts), 3.2%; SK Hynix Semiconductor, 2.8%; Shinhan Financial, 2.7%; Kia Motors, 2.6%; KB Financial, 2.2%; LG Chemical, 2.1%; and NHN (Internet content), 2.1%.

The fund’s industry breakdown is as follows: Information Technology, 32.3%; Consumer Discretionary, 18.2%; Financials, 14.7%; Industrials, 13.2%; Materials, 10.0%; Consumer Staples, 5.4%; Energy, 2.7%; Utilities, 1.4%; Telecommunication Services, 1.2%; and Health Care, 0.8%.
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ISHARES MSCI EMERGING MARKETS INDEX FUND $40.56 (New York symbol EEM; buy or sell through brokers) is an exchange traded fund that aims to track the MSCI Emerging Markets Index. Its geographic breakdown includes China, 17.8%; South Korea, 14.8%; Brazil, 12.1%; Taiwan, 11.5%; South Africa, 6.7%; India, 6.7%; Russia, 5.6%; Mexico, 5.2%; Malaysia, 3.9%; and Indonesia, 3.0%.

The ETF’s top holdings are Samsung Electronics (South Korea), 4.1%; Taiwan Semiconductor (computer chips), 2.4%; China Mobile, 1.7%; China Construction Bank, 1.6%; Industrial & Commercial Bank of China, 1.2%; Gazprom (Russia: gas utility), 1.1%; America Movil (Brazil: wireless), 1.1%; and Itau Unibanco (Brazil: banking), 1.1%.

The fund’s industry breakdown is as follows: Financials, 27.4%; Information Technology, 14.6%; Energy, 11.5%; Materials, 9.9%; Consumer Staples, 9.4%; Consumer Discretionary, 8.1%; Telecommunication Services, 7.5%; and Industrials, 6.4%.
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ISHARES MSCI JAPAN INDEX FUND $10.60 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an exchange traded fund that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.

The ETF’s top holdings include Toyota, 6.6%; Mitsubishi UFJ Financial, 3.0%; Honda Motor, 2.5%; Sumitomo Mitsui Financial, 2.1%; Softbank Corp., 1.9%; Mizuho Financial Group, 1.8%; Canon, 1.6%; Japan Tobacco, 1.5%; Takeda Pharmaceutical, 1.4%; and Hitachi, 1.3%.

The fund’s industry breakdown is as follows: Consumer Discretionary, 21.8%; Financials, 20.1%; Industrials, 18.9%; Information Technology, 10.7%; Consumer Staples, 6.5%; Health Care, 6.2%; Materials, 6.2%; Telecommunication Services, 4.7%; Utilities, 3.1%; and Energy, 1.3%.
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GLOBAL X COPPER MINERS ETF $10.23 (New York symbol COPX; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Copper Miners Index, which includes between 20 and 40 international companies that mine, refine or explore for copper. Germanybased Structured Solutions AG created this index.

Canadian companies make up 48.3% of the fund’s holdings. It also includes companies based in Australia (7.2%), Poland (5.0%), Peru (5.7%) and Mexico (6.7%). Global X Copper Miners ETF’s MER is 0.65%.

Its top 10 holdings are Turquoise Hill Resources at 5.8%; Capstone Mining, 5.5%; Vendanta Resources, 5.5%; Freeport Copper, 5.1%; First Quantum Minerals, 5.1%; Taseko Mines, 5.0%; Cudeco Ltd., 5.0%; Lundin Mining, 4.9%; Antofagasta plc, 4.9%; and Jiangxi Copper Company, 4.8%.
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GLOBAL X SILVER MINERS ETF $14.42 (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index.

This index includes 31 international companies that mine, refine or explore for silver. Germanybased Structured Solutions AG developed the Global X Silver Miners Index.

Canadian companies make up 46.6% of the fund’s holdings, but it also includes companies based in the U.S. (11.0%) and Mexico (14.6%). The ETF’s MER is 0.65%.
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ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $12.91 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index.

This index is made up of 54 gold stocks from Canada and around the world. The fund’s MER is 0.60%. iShares S&P/TSX Global Gold Index Fund began trading on March 23, 2001.

The fund’s top 10 holdings are Goldcorp at 13.1%; Barrick Gold, 13.8%; Newmont Mining, 11.3%; Yamana Gold, 5.8%; Kinross, 4.9%; Randgold Resources (ADR), 4.8%; AngloGold Ashanti (ADR), 4.6%; Franco Nevada, 4.1%, Eldorado Gold, 3.8%; and Agnico-Eagle Mines, 3.7%.
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MANITOBA TELECOM SERVICES INC. $35.75 (Toronto symbol MBT; Shares outstanding: 67.5 million; Market cap: $2.4 billion; TSINetwork Rating: Average; Dividend yield: 4.8%; www.mts.ca) has 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, which is equal to 22% of Manitoba Telecom’s $2.4-billion market cap. If you disregard closing costs, Manitoba Telecom will receive $405 million. Assuming regulators approve, the company expects to complete the sale in the second half of 2013.
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IMPERIAL OIL $39.57 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $34.2 billion; TSINetwork Rating: Average; Dividend yield: 1.2%; www.imperialoil.ca) is a major integrated oil company with oil sands projects in Alberta and conventional oil and gas operations across Western Canada. Imperial also owns four refineries and operates 1,850 Esso gas stations.

Imperial produced 284,000 barrels of oil equivalent per day in the latest quarter, down 1.7% from 289,000 barrels a year earlier. The decline was mainly the result of planned maintenance at the Syncrude oil sands project, in which Imperial owns a 25.0% stake.

In the three months ended March 31, 2013, Imperial’s earnings fell 21.4%, to $798 million, or $0.94 a share, due to an 8% drop in the company’s selling price for oil. A year earlier, it earned $1.0 billion, or $1.19 a share. Cash flow per share fell 17.4%, to $1.19 from $1.44. However, revenue rose 3.3%, to $8.0 billion from $7.5 billion, largely because downstream sales (refineries and gas stations) rose 10.0%.
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Pat McKeough responds to many requests for specific advice on the best stocks to invest in and other questions on investment strategy 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, we received a question from an Inner Circle member about a stock that may not be well known to Canadian investors, but has a product which has made headlines. Israeli defense contractor Elbit Systems has seen its profits rise thanks to the sale of unmanned air vehicles, or drones. Pat looks at the company’s overall outlook and how much emphasis investors should put on one ‘hot’ product like drones....

We think conservative investors could hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus. The best ETFs offer very low management fees and well-diversified, tax-efficient portfolios of high-quality stocks. Here are two international ETFs that we follow regularly. ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND (New York Exchange symbol ECH; us.ishares.com; buy or sell through brokers) is an ETF that aims to track the MSCI Chile Investable Market Index, which consists of stocks that are mainly traded on the Santiago Stock Exchange....

FINNING INTERNATIONAL INC. $22 (www.finning.com) has increased its quarterly dividend by 8.9%, to $0.1525 a share from $0.14. The new annual rate of $0.61 yields 2.8%. Finning sells heavy equipment to the mining industry, and lower commodity prices have hurt the stock....