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ISHARES S&P/TSX 60 INDEX FUND $17.66 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.

The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include.

The index’s top holdings are Royal Bank, 7.8%; TD Bank, 6.7%; Bank of Nova Scotia, 6.0%; Suncor Energy, 4.6%; Bank of Montreal, 3.6%; CN Railway, 3.6%; Potash Corp., 3.3%; Enbridge, 3.1%; Trans- Canada Corp., 3.0%; BCE, 3.0%; CIBC, 2.9%; Canadian Natural Resources, 2.9%; Barrick Gold, 2.9%; Goldcorp, 2.6%; Manulife Financial, 2.3%; Cenovus Energy, 2.2%; and Telus, 1.9%.
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ENBRIDGE INC. $47.11 (Toronto symbol ENB; Shares outstanding: 806.5 million; Market cap: $38.8 billion; TSINetwork Rating: Above A v e r a g e ; D i v i d e n d y i e l d : 2 . 7 % ; www.enbridge.com) has formed a 50/50 partnership with France’s EDF Energies Nouvelles to buy the Blackspring Ridge wind farm in Alberta for $600 million.

This facility will produce 300 megawatts of power when it’s finished in mid-2014; Enbridge now generates 1,169 megawatts of wind power.

Blackspring Ridge has long-term, fixed-price deals in place for its power. That cuts the risk of this investment. Expanding its renewable energy holdings also helps Enbridge improve its relationships with regulators and environmentalists.
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VERESEN $13.32 (Toronto symbol VSN; Shares outstanding: 198.4 million; Market cap: $2.7 billion; TSINetwork Rating: Average; Yield: 7.5%) owns pipelines, power plants and gas processing facilities across North America. A major holding is 50% of the Alliance gas line, which runs 3,000 kilometres between Chicago and Fort St. John, B.C. Enbridge owns the other 50%. Veresen also owns the Alberta Ethane Gathering System, and Veresen and Enbridge together hold 85.4% of the Aux Sable NGL plant.

In February 2012, Veresen paid Encana Corp. $920 million for the Hythe/Steeprock natural gas gathering and processing complex. Encana signed a long-term deal to buy most of this facility’s gas.

To diversify beyond pipelines and gas-processing plants, Veresen continues to expand its power generation business. It now owns hydroelectric facilities in New York State and B.C.; natural gasfired plants in Ontario, California and Colorado; and waste-heat plants in B.C. and Saskatchewan.
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PEMBINA PIPELINE $32.69 (Toronto symbol PPL; Shares outstanding: 294.9 million; Market cap: $10.2 billion; TSINetwork Rating: Average; Divd. yield: 5.0%; www.pembina.com) owns pipelines that carry half of Alberta’s conventional oil production, 30% of Western Canada’s natural gas liquids (NGLs) and almost all of B.C.’s conventional oil output.

In the quarter ended December 31, 2012, revenue rose 170.4%, to $1.3 billion from $468.1 million a year earlier. In April 2012, it paid $3.2 billion for rival Provident Energy, which extracts, transports and stores NGLs. Provident was the main reason for the higher revenue.

Cash flow rose 161.5%, to $172.3 million from $66.0 million. Cash flow per share rose 51.3%, to $0.59 from $0.39, because Pembina issued more shares to pay for Provident.
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BANK OF NOVA SCOTIA $57.83 (Toronto symbol BNS: Shares outstanding: 1.2 billion; Market cap: $69.2 billion; TSINetwork Rating: Above Average; Dividend yield: 4.2%, www.scotiabank.com) has acquired 50% of AFP Horizonte, which manages pension funds in Peru, for $260 million. This business has 1.4 million clients and $9 billion U.S. of assets under management. SURA Asset Management owns the other 50%.

Demand for pension fund services is growing quickly in Latin America. As well, Bank of Nova Scotia has a long history in this region, which cuts the risk of this investment.

The bank and SURA plan to divide AFP Horizonte in the next few weeks. Following the split, Bank of Nova Scotia will merge this business with its existing pension plan operations in Peru. The combined business will have 1.9 million clients and $10.3 billion U.S. in assets under management.
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VANGUARD EMERGING MARKETS ETF $43.30 (New York symbol VWO; buy or sell through brokers) aims to track the FTSE Emerging Transitions Index, which is made up of common stocks of companies located in developing countries around the world. The fund has an MER of just 0.18%.

Vanguard Emerging Markets ETF’s top holdings include Samsung Electronics (South Korea), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Taiwan Semiconductor (Taiwan: computer chips), Vale SA (Brazil: mining), Banco Bradesco (Brazil: banking), Gazprom (Russia: gas utility), China Construction Bank, Itau Unibanco Holding SA (Brazil: banking), Industrial & Commercial Bank of China and CNOOC Limited (China: oil and gas).

The $74.6-billion fund’s breakdown by country is as follows: China (18.6%), Brazil (14.3%), Taiwan (11.1%), India (8.1%), South Africa (8.1%), South Korea (7.7%), Russia (6.4%), Mexico (5.6%), Malaysia (4.1%), Indonesia (3.2%), Thailand (3.0%), Turkey (2.3%), Chile (2.2%), Poland (1.4%) and others (3.9%).
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VANGUARD GROWTH ETF $78.17 (New York symbol VUG; buy or sell through brokers) aims to track the CRSP U.S. Large Cap Growth Index, a broadly diversified index that mainly consists of shares of large U.S. companies. The fund’s MER is just 0.10%.

The $27.0-billion Vanguard Growth ETF’s top holdings are Apple, IBM, Google, Coca-Cola, Philip Morris International, Oracle, Wal-Mart, Schlumberger, Qualcomm and Home Depot.

The fund’s breakdown by industry is as follows: Information Technology (27.2%), Consumer Discretionary (20.3%), Consumer Staples (12.5%), Industrials (12.3%), Health Care (11.5%), Financials (6.4%), Energy (6.0%), Materials (3.1%), Telecommunication Services (0.6%) and Utilities (0.1%).
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IBM $199.63 (New York symbol IBM; Shares outstanding: 1.1 billion; Market cap: $224.8 billion; TSINetwork Rating: Above Average; Dividend yield: 1.9%) reported lower-than-expected earnings and revenue for the latest quarter.

In the three months ended March 31, 2013, the company earned $3.00 a share before one-time items, up 7.9% from $2.78. The gain was mainly the result of IBM’s ongoing efforts to cut costs and improve productivity. Even so, the latest earnings missed the consensus estimate of $3.05 a share.

Revenue fell 5.1%, to $23.4 billion from $24.7 billion. That also fell short of the consensus estimate of $24.6 billion. IBM gets two-thirds of its revenue from overseas. If you adjust for foreign-exchange rates, overall sales would have declined by 3%.
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LOBLAW COMPANIES $44.75 (Toronto symbol L; Shares outstanding: 281.8 million; Market cap: $12.1 billion; TSINetwork Rating: Above Average; Dividend yield: 2.0%; www.loblaw.ca) is Canada’s largest food retailer, with about 1,000 stores.

In the three months ended March 23, 2013, Loblaw’s sales rose 3.8%, to $7.2 billion from $6.94 billion a year earlier. Overall sales at its supermarkets rose 3.4%, while same-store sales rose 2.8%. Revenue from its financial services division, which mainly issues credit cards, rose 27.9%. Before one-time items, earnings rose 11.6%, to $0.48 a share from $0.43.

As mentioned, Loblaw has announced a plan to form a REIT that will hold $7 billion of its properties. Right now, the company owns 47 million square feet of real estate with a market value of $9 billion to $10 billion. After this transaction closes in mid-2013, Loblaw will sell units of the REIT to the public. It will hang on to a majority stake.
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CALIAN TECHNOLOGIES $20.35 (Toronto symbol CTY; www.calian.com) operates in two areas: the business and technology services division (which supplies 70% of Calian’s revenue) provides engineers, health care workers and other skilled professionals to clients on a contract basis. The systems engineering division (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems....

IGM FINANCIAL INC. (Toronto symbol IGM; www.igmfinancial.com) is Canada’s largest independent mutual fund company, with $125.8 billion of assets under management. Power Financial owns 58.4% of IGM....

PENGROWTH ENERGY CORP. $5.07 (www.pengrowth.com) continues to develop its Lindbergh oil sands project in Alberta. When this operation begins commercial production late next year, it should produce 12,500 barrels a day. That’s equal to 14% of the 89,702 barrels a day that Pengrowth produced in the first three months of 2013....

BELL ALIANT INC. $28 (www.bellaliant.ca) earned $0.43 a share in the three months ended March 31, 2013, unchanged from a year earlier. Revenue rose 0.3%, to $683.6 million from $681.8 million. Strong demand for high-speed Internet and TV services offset lower local and long-distance revenue....

MOLSON COORS CANADA INC. (Toronto symbols TPX.A $49 and TPX.B $49; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 181.7 million; Market cap: $8.9 billion; Price-to-sales ratio: 2.4; 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.

The company’s sales fell 36.5%, from $4.8 billion in 2008 to $3.0 billion in 2009 (all amounts except share prices and market cap in U.S. dollars). That’s because it merged its U.S. brewing operations with those of rival SABMiller to form MillerCoors. Each company has a 50% voting interest in this joint venture, but Miller gets 58% of the profits while Molson Coors gets 42%. Because it owns less than half of MillerCoors, accounting rules forced Molson Coors to stop including the sales from this business in its overall sales.


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METRO INC. $70 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 95.2 million; Market cap: $6.7 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.4%; TSINetwork Rating: Average; www.metro.ca) earned $100.5 million in the 12 weeks ended March 16, 2013. This figure excludes a $266.4-million gain on the sale of about half its stake in Alimentation Couche-Tard Inc. (Toronto symbol ATD.B), which operates convenience stores in North America and Norway. The latest earnings are also up 4.4% from $96.3 million a year earlier. Metro used the sale proceeds to buy back shares. As a result, earnings per share rose 8.5%, to $1.02 from $0.94.

Sales fell 2.6%, to $2.5 billion from $2.6 billion, as the company closed some unprofitable supermarkets in Ontario. As well, the year-earlier quarter, which began on December 18, 2011, included the busy week before Christmas. Same-store sales were flat.

Metro is a buy....

CANADIAN TIRE CORP. $74 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.2 million; Market cap: $6.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.canadiantire.ca) operates 490 Canadian Tire stores, which specialize in automotive, household and sporting goods. The company owns these stores, but franchisees (called dealers) operate most of them.

The company recently negotiated a new 11-year contract with its dealers. This should make it easier for Canadian Tire and its dealers to remodel stores and adjust inventories as they compete with U.S.- based retailers like Wal-Mart and Target.

Canadian Tire is a buy....

CANADIAN IMPERIAL BANK OF COMMERCE $81 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 401.9 million; Market cap: $32.5 billion; Price-to-sales ratio: 1.9; D i v i d e n d y i e l d : 4 . 6 % ; TSINetwork Rating: Above Average; www.cibc.com) is buying Atlantic Trust Private Wealth Management, which sells portfolio management services to wealthy clients in the U.S.

CIBC will pay $210 million U.S. when the deal closes later this year. To put that in context, it earned $895 million (Canadian), or $2.15 a share, in the three months ended January 31, 2013. Atlantic Trust will add $20 billion U.S. to the $223 billion (Canadian) in assets that CIBC’s wealth management division already has under administration.

CIBC is a buy....

TRANSCANADA CORP. $49 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 707.0 million; Market cap: $34.6 billion; Price-to-sales ratio: 4.2; Dividend yield: 3.8%; TSINetwork Rating: Above Average; 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.

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

These investments will help TransCanada handle rising production from Alberta’s oil sands. The new system will also help support its proposed Keystone XL pipeline extension. This project, which requires U.S. government approval, would pump oil to refineries on the U.S. Gulf Coast.
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BLACKBERRY INC. $15 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.0 million; Market cap: $7.9 billion; Price-to-sales ratio: 0.7; No dividends paid; TSINetwork Rating: Average; www.blackberry.com) announced that the U.S. Department of Defense will let its employees use the company’s new smartphones, which run on the BlackBerry 10 operating system.

The company’s unique software helps businesses and governments encrypt mobile email messages and other sensitive data. That’s why the Defense Department has 470,000 BlackBerry users, compared to just 49,700 users of other devices.

BlackBerry is still a hold....

CAE INC. $11 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 259.7 million; Market cap: $2.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.8%; TSINetwork Rating: Average; www.cae.com) received orders for 35 flight simulators in the fiscal year ended March 31, 2013. That’s down slightly from 37 in 2012.

However, CAE continues to win contracts for its pilot-training operations: it now has over 100 flight schools in 30 countries. For example, it recently agreed to build a pilot-training facility for the Kuwait Air Force. Other recent contracts include deals to train pilots for airlines in South America, Turkey and Ireland.

The company probably earned $0.69 a share in fiscal 2013, and the stock trades at 15.9 times that figure. CAE’s fiscal 2014 earnings could rise to $0.79 a share, and the stock trades at a more reasonable 13.9 times that forecast. The $0.20 dividend yields 1.8%.

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BOMBARDIER INC. (Toronto symbols BBD.A $4.25 and BBD.B $4.23; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $7.6 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) had commitments in place for 382 CSeries planes, including 148 firm orders, at the end of 2012. If the buyers exercise all their options, these deals would be worth around $23 billion U.S. That’s equal to 1.4 times Bombardier’s 2012 revenue of $16.8 billion U.S.

Porter Airlines recently ordered 12 CSeries planes, with an option to buy 18 more. The deal is conditional on Porter winning approval for its plan to extend the runway at the Billy Bishop Toronto City Airport in downtown Toronto. The airline’s current fleet of 26 Bombardier Q400 turboprop planes flies out of the airport now, but the runway extension would be needed to handle the CSeries jets.

As part of the agreement, Porter also has an option to buy six more Q400s. If the airline exercises all of its options, the entire deal would be worth $2.3 billion U.S. Bombardier will deliver the CSeries planes in 2016.

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IGM FINANCIAL INC. $47 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 251.8 million; Market cap: $11.8 billion; Price-to-sales ratio: 4.6; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.igmfinancial.com) is Canada’s largest independent mutual fund company, with $125.8 billion of assets under management. Power Financial owns 58.4% of IGM.

The company has two main divisions. Investors Group sells its mutual funds, along with other services like portfolio management and mortgages, through 4,500 affiliated advisors. Mackenzie Financial sells its funds through independent brokers.

In 2012, Investors Group cut the management fees on most of its funds to better compete with other fund companies. This move seems to be paying off. In the three months ended March 31, 2013, Investors Group’s sales, net of redemptions, jumped 114.4% to $375.6 million from $175.2 million a year earlier.
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MAPLE LEAF FOODS INC. $13 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.0 million; Market cap: $1.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.2%; TSINetwork Rating: Average; www.mapleleaf.ca) recently increased the prices of its meat products to offset rising costs of animal feed after last year’s drought in the U.S. The recent drop in the value of the yen has also made its pork products more expensive in Japan. As a result, Maple Leaf’s sales fell 4.1% in the first quarter of 2013, to $1.1 billion from $1.2 billion a year earlier. If you exclude the cost of a major restructuring, which includes building new plants and eliminating unprofitable products, Maple Leaf lost $0.06 a share, compared with a year-earlier profit of $0.06 a share.

Due to new accounting rules for pensions, Maple Leaf has cut its gross margin (gross profits as a percentage of sales) target for 2015 to 11.7% from 12.5%. That’s still a big improvement over its 2012 gross margin of 8.6%.

Maple Leaf Foods is still a buy....

POTASH CORP. OF SASKATCHEWAN $44 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 865.1 million; Market cap: $38.1 billion; Price-to-sales ratio: 4.7; Dividend yield: 2.6%; TSINetwork Rating: Average; www.potashcorp.com) no longer aims to buy control of Israel Chemicals, which produces potash from minerals it extracts from the Dead Sea. Potash Corp. wanted to increase its stake from 13.9% to at least 51%, but the plan faced intense political opposition. The company plans to hang on to this investment and may try to buy more of Israel Chemicals in the future.

Meanwhile, the company’s sales rose 20.3% in the three months ended March 31, 2013, to $2.1 billion from $1.7 billion a year earlier (all amounts except share price and market cap in U.S. dollars). Earnings rose 13.2%, to $556 million from $491 million. Due to more shares outstanding, per-share earnings rose 12.5%, to $0.63 from $0.56. New contracts with potash buyers in China and India, plus higher shipments to Brazil, helped offset a 16.6% drop in the company’s average realized selling price.

Potash Corp. is a buy....

CENOVUS ENERGY INC. $31 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $23.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.1%; TSINetwork Rating: Average; www.cenovus.com) operates three heavy oil projects in Alberta and one in Saskatchewan. It gets about half of its output from the oil sands. Conventional oil and natural gas wells supply the other half.

U.S.-based ConocoPhillips (New York symbol COP) owns 50% of Cenovus’s main Foster Creek and Christina Lake oil sands projects in Alberta. These properties produce heavy bitumen, which Cenovus ships to its 50%-owned refineries in Illinois and Texas. ConocoPhillips recently spun off its refining operations as a separate company called Phillips 66 (New York symbol PSX). This new firm owns the other 50% of these refineries.

Cenovus continues to increase its oil sands output. In the first three months of 2013, it produced 271,100 barrels of oil equivalent a day (66% oil and 34% gas), up 3.1% from 262,900 barrels a year earlier.
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