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IMPERIAL OIL LTD. $40 (Toronto symbol IMO; Conservative Growth Portfolio; Resources sector; Shares outstanding: 847.6 million; Market cap: $33.9 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.2%; TSINetwork Rating: Average; www.imperialoil.ca) has started operating its new Kearl oil sands project in northern Alberta. Imperial owns 71% of Kearl. ExxonMobil Corp. (New York symbol XOM) owns the remaining 29%. Exxon also owns 69.6% of Imperial.

Kearl is the biggest project in Imperial’s history. Its first phase will produce 110,000 barrels a day (Imperial’s share is 78,100 barrels) by the end of 2013. The project’s second phase will add a further 78,100 barrels to Imperial’s daily production by late 2015. Kearl’s reserves should last 40 years.

Meanwhile, Imperial produced 284,000 barrels of oil equivalent a day in the three months ended March 31, 2013. That’s down 1.7% from 289,000 barrels a year earlier. The decline is mainly the result of planned maintenance at the Syncrude oil sands project; Imperial owns 25.0% of Syncrude.
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SUNCOR ENERGY INC. $32 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $48.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.5%; TSINetwork Rating: Average; www. suncor.com) recently agreed to sell its conventional natural gas operations in Alberta, northeastern British Columbia and southern Saskatchewan for $1 billion. The deal does not include Suncor’s undeveloped shale gas and oil properties in B.C. and Alberta.

The cash from this sale prompted Suncor to raise its quarterly dividend by 53.8%, to $0.20 a share from $0.13. The new annual rate of $0.80 yields 2.5%. The company also plans to buy back up to $2 billion of its shares over the next five months.

In addition, Suncor continues to expand its oil sands operations. In the three months ended March 31, 2013, the company produced an average of 596,100 barrels of oil equivalent (including gas) a day. That’s up 6.0% from 562,300 barrels a year earlier.
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CANADIAN PACIFIC RAILWAY LTD. $132 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 174.7 million; Market cap: $23.1 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.1%; TSINetwork Rating: Above Average; www.cpr.ca) continues to benefit from a major restructuring plan, which includes new locomotives, better tracks and software that optimizes train loads and speeds.

In the first three months of 2013, CP’s earnings jumped 52.8%, to $217 million, or $1.24 a share. A year earlier, the company earned $142 million, or $0.82 a share.

The higher earnings are mainly due to CP’s improving efficiency. Its operating ratio improved to 75.8% from 80.1% a year ago. The company aims to cut its operating ratio to 65% by the middle of 2016.
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CANADIAN NATIONAL RAILWAY CO. $102 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 424.1 million; Market cap: $43.3 billion; Price-to-sales ratio: 4.3; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. The company’s 32,350-kilometre network stretches across Canada and through the U.S. Midwest to the Gulf of Mexico.

Ottawa nationalized CN in 1918 because of the vital role the company played in Canada’s early growth. In 1995, CN became a publicly traded company. Unlike CP, Ottawa limits a single investor’s ownership in CN to 15%.

Due to a drop in freight volumes during the recession, CN’s revenue fell 13.1%, from $8.5 billion in 2008 to $7.4 billion in 2009. Revenue recovered to $8.3 billion in 2010 and surged to $9.9 billion in 2012.

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Pat McKeough responds to many requests for advice on specific stocks 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 the largest wireless provider in the world. China Mobile competes with two other Chinese wireless providers, each of which has the advantage of being compatible with Apple iPhones, while China Mobile is not. Pat looks at whether an upgrade of China Mobile’s network and new chip technology will let it hook up with Apple and other popular smartphones and keep its lead in the Chinese market. ...

In October 2012 Kraft Foods Inc. broke up into two separate companies, Kraft Foods Group (Nasdaq symbol KRFT) and Mondelez. Recently, we looked at Kraft (view the daily post here), whose operations are now focused on North America. Today we look at its spinoff, Mondelez, which gets most of its sales from overseas markets. MONDELEZ INTERNATIONAL INC. (Nasdaq symbol MDLZ; www.mondelezinternational.com) makes cookies and biscuits (Oreo, Chips Ahoy, Ritz), chocolate bars (Cadbury, Toblerone) and gum and candy (Trident, Chiclets, Halls cough drops). It also makes beverages, including coffee (Tassimo) and powdered fruit drinks (Tang), as well as grocery and cheese products for overseas markets. Mondelez gets 46% of its sales from developing countries, 35% from Europe and 19% from North America....

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. Today’s tip: “You take a double loss if you lose money in your RRSP, which means that it is an expensive place to find out if you have a talent for stock trading.”...

MOLSON COORS CANADA INC. (Toronto symbols TPX.A and TPX.B; 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 when it merged its U.S. brewing operations with those of rival SABMiller to form MillerCoors in 2008. 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....

Members of my Inner Circle can ask me and my investment team financial questions of any kind. Aside from questions on specific investments like stocks and exchange-traded funds, members ask us many other questions about how they should be investing their money. One intriguing question came from a member who asked whether there is any advantage to investing in a prepaid funeral. I’d like to share this question, and our answer, with you....

Pat McKeough responds to many requests for specific advice on stock tips 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, we had a request from an Inner Circle member about Accord Financial, a stock that did well for us a couple of years ago. We recommended selling Accord and taking profits in February 2011. Pat looks at the company’s prospects today. ...

SYMANTEC CORP. $23 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 696.6 million; Market cap: $16.0 billion; Price-to-sales ratio: 2.3; Dividend yield: 2.6%; TSINetwork Rating: Average; www.symantec.com) makes software that protects computers from viruses and intruders, including the popular Norton anti-virus program. It also sells products and services, such as e-mail filtering and data backup, to businesses.

In July 2005, the company paid $13.2 billion for Veritas Software, whose software stores and protects information in large databases. The deal cut the company’s reliance on selling software to consumers and helped it compete with larger computer-services firms, like IBM.


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CEDAR FAIR L.P. $43 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.6 million; Market cap: $2.4 billion; Price-to-sales ratio: 2.2; Dividend yield: 5.8%; TSINetwork Rating: Average; www.cedarfair.com) lost $1.95 a share in the first quarter of 2013, compared to a loss of $1.18 a year earlier. That’s mainly due to a one-time charge on the early retirement of debt. Cedar Fair typically loses money in the first quarter, as most of its 11 amusement parks and seven water parks close during the winter. However, revenue jumped 48.2%, to $41.8 million from $28.2 million, thanks to higher attendance and per-guest spending at its Knott’s Berry Farm year-round park in southern California.

The stock has gained 60% in the past year. However, that’s mainly due to its rising distributions, which could slow this year.

Cedar Fair is still a hold....

PROCTER & GAMBLE CO. $79 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $213.3 billion; Price-to-sales ratio: 2.7; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.pg.com) recently raised its quarterly dividend by 7.0%, to $0.6015 a share from $0.562....

FORD MOTOR CO. $16 (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.9 billion; Market cap: $62.4 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.5%; TSINetwork Rating: Extra Risk; www.ford.com) continues to expand in China. It sold 75,331 vehicles in that country in April 2013, up 37% from April 2012. That’s mainly due to strong demand for its new Focus sub-compact car and several of its sport utility models.

The company plans to launch 15 new vehicles in China by 2015. It also aims to double its production capacity in China, to 1.2 million vehicles, by 2015.

Ford is a buy.
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ALCOA INC. $8.58 (New York symbol AA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.1 billion; Market cap: $9.4 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.4%; TSINetwork Rating: Average; www.alcoa.com) is looking at more ways to cut costs, as aluminum prices have dropped 33% from their 2011 peak.

In response to the lower prices, the company has already closed about 13% of its smelting capacity. It is now thinking about lowering its production by a further 11%. This should help it reach its goal of cutting its operating costs by around 10% by 2015.

Alcoa is a buy.
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GANNETT CO. INC. $22 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 229.6 million; Market cap: $5.1 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.6%; TSINetwork Rating: Average; www.gannett.com) earned $86.0 million in the first quarter of 2013. That’s up 6.5% from $80.8 million a year earlier. Earnings per share rose 8.8%, to $0.37 from $0.34, on fewer shares outstanding. Revenue climbed 1.6%, to $1.24 billion from $1.22 billion.

The company continues to benefit from its move to charge users for access to its newspapers’ websites: revenue from its Internet operations (which supply 15% of the total) rose 3.9%. It now has 50,000 digital subscribers and feels this will rise to 300,000 by 2014. However, weaker demand for print advertising cut revenue at Gannett’s newspaper division (69% of revenue) by 0.3%. Revenue from its 23 TV stations (16%) rose 8.7% due to higher retransmission fees from cable and satellite TV operators.

Gannett is a buy.
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BHP BILLITON LTD. ADRs $66 (New York symbol BHP; Conservative Growth Portfolio, Resources sector; ADRs outstanding: 2.7 billion; Market cap: $178.2 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.5%; TSINetwork Rating: Average; www.bhpbilliton.com) plans to spend $18 billion developing new mines in the fiscal year ending June 30, 2014, down 18.2% from $22 billion in fiscal 2013. That’s because slowing economic growth in China has hurt prices for commodities like iron ore, copper and coal.

This spending should continue to fall in future years, because many of the projects that BHP is developing will start up in 2015.

BHP Billiton is a buy....

ARCHER DANIELS MIDLAND CO. $33 (New York symbol ADM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 658.8 million; Market cap: $21.7 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.adm.com) will pay $3.5 billion for the 80.2% of GrainCorp, a leading Australian grain-storage and shipping company, that it does not already own. Controlling all of GrainCorp will help Archer Daniels profit as Australia ships more grain and other crops to Asia. The deal should close by the end of 2013.

Meanwhile, Archer Daniels earned $269 million, or $0.41 a share, in the three months ended March 31, 2013. That’s down 32.6% from $399 million, or $0.60 a share, a year earlier. If you exclude writedowns and other unusual items, per-share earnings fell 38.5%, to $0.48 from $0.78.

Last year’s drought in the U.S. increased the prices that Archer Daniels’ food-processing operations paid for soybeans and other crops. That was the main reason for the lower earnings. However, revenue rose 2.7%, to $21.7 billion from $21.2 billion, as falling ethanol inventories helped increase prices.
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MONSANTO CO. $105 (New York symbol MON, Aggressive Growth Portfolio; Manufacturing & Industry sector; Shares outstanding: 533.8 million; Market cap: $56.0 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.4%; TSINetwork Rating: Above Average; www.monsanto.com) recently won a major patent-infringement lawsuit. The dispute arose after a farmer in Indiana, who grew soybeans using Monsanto’s herbicide-resistant seeds, used the resulting seeds for future crops instead of buying more.

Monsanto gets over 70% of its revenue by selling genetically modified seeds, so allowing farmers to replant these seeds would have significantly hurt the company’s prospects. The remaining 30% comes from pest- and weed-control products.

Meanwhile, Monsanto earned $1.5 billion, or $2.74 a share, in the three months ended February 28, 2013. That’s up 22.5% from $1.2 billion, or $2.24 a share, a year earlier. If you disregard unusual items, mainly costs to clean up contamination at a chemical plant in West Virginia, earnings per share would have risen 19.7%, to $2.73 from $2.28. Sales rose 15.2%, to $5.5 billion from $4.7 billion. That’s mainly due to strong sales of its corn seeds in Brazil.
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CANON INC. ADRs $36 (New York symbol CAJ; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.2 billion; Market cap: $43.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www. canon.com) recently raised its revenue and earnings forecasts for 2013. However, that’s entirely due to the Bank of Japan’s recent moves to devalue the yen. The lower currency makes Canon’s printers, cameras and other products cheaper in other countries.

As well, more people are using their smartphone’s built-in camera to take pictures. That’s hurting sales of Canon’s low-priced compact cameras.

Canon is still a hold....

C.R. BARD INC. $104 (New York symbol BCR; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 80.5 million; Market cap: $8.4 billion; Price-to-sales ratio: 2.9; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.crbard.com) makes vascular products, such as stents and catheters; oncology products that detect and treat various types of cancer; urology products, such as drainage and incontinence devices; and surgical tools. Overseas markets supply a third of the company’s sales.

Bard recently agreed to pay $50.5 million to settle allegations that from 1998 to 2006 the company offered hospitals free equipment and other benefits if they used its cancer-treatment products.

If you exclude these costs, Bard’s earnings fell 13.5% in the first quarter of 2013, to $120.7 million from $139.5 million a year earlier. Earnings per share fell 10.6%, to $1.44 from $1.61, on fewer shares outstanding. However, sales rose 1.4%, to $740.3 million from $730.0 million. Bard spent 8.0% of its sales on research in the quarter, up from 6.6% a year earlier.
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BAXTER INTERNATIONAL INC. $71 (New York symbol BAX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 542.0 million; Market cap: $38.5 billion; Price-to-sales ratio: 2.8; Dividend yield: 2.8%; TSINetwork Rating: Average; www.baxter.com) makes medical products, such as intravenous pumps and kidney dialysis equipment. It also produces vaccines and drugs.

The company has agreed to pay $4.0 billion for Gambro AB, a privately held Swedish company that makes dialysis products. It should complete the purchase in the next few weeks. If you exclude acquisition- related costs and other unusual items, Baxter would have earned $581 million in the quarter ended March 31, 2013. That’s up 2.1% from $569 million a year earlier. Due to fewer shares outstanding, pershare earnings rose 4.0%, to $1.05 from $1.01. Sales rose 1.8%, to $3.45 billion from $3.39 billion.

The company spent $246 million (or 7.1% of its sales) on research in the latest quarter. That’s down 8.6% from $269 million (or 7.9% of sales) a year earlier. Baxter recently teamed up with another firm to develop certain products, which lowered its research costs.
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NVIDIA CORP. $14 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 577.9 million; Market cap: $8.1 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.1%; TSINetwork Rating: Average; www.nvidia .com) continues to benefit from strong demand for its new graphic chips, which make computer games run more smoothly.

In the quarter ended April 28, 2013, Nvidia’s sales rose 3.2%, to $954.7 million from $924.9 million a year earlier. The higher sales pushed up earnings by 12.5%, to $0.18 a share from $0.16. The company continues to spend a high 34% of its revenue on research, but its sales of chips for mobile devices have slowed while buyers wait for it to launch new models later this year. The company also faces growing competition from larger chipmakers.

Nvidia is a hold....

TERADATA CORP. $55 (New York symbol TDC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 163.4 million; Market cap: $9.0 billion; Price-to-sales ratio: 3.4; No dividends paid; TSINetwork Rating: Average; www.teradata.com) makes computers and software that capture and store large amounts of a business’s data, including its sales and inventory. It then analyzes this information and identifies buying habits and trends, which helps its clients make better decisions. Teradata was a wholly owned subsidiary of NCR Corp. until October 1, 2007.

The slow economy is prompting businesses to cut spending on computer systems. That’s why Teradata’s revenue fell 4.2% in the first quarter of 2013, to $587 million from $613 million a year earlier. Earnings declined 29.1%, to $73 million, or $0.43 a share, from $103 million, or $0.60. Teradata spent 8.5% of its revenue on research in the latest quarter.

The company gets roughly half of its revenue from outside the U.S., and unfavourable foreign currency rates will probably hold back its sales this year. The stock trades at 19.7 times the $2.79 a share that Teradata will probably earn in 2013.
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AGILENT TECHNOLOGIES INC. $46 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 345.0 million; Market cap: $15.9 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.0%; TSINetwork Rating: Average; 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.

Agilent earned $269 million in its fiscal 2013 second quarter, which ended April 30, 2013. That’s down 2.2% from $275 million a year earlier. Due to fewer shares outstanding, earnings per share fell 1.3%, to $0.77 from $0.78.

Revenue was flat at $1.7 billion. Mobile phone makers bought less testing equipment. However, medical equipment sales benefited from last year’s $2.2- billion purchase of Dako, a Denmark-based firm whose products detect cancer.
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