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STANLEY BLACK & DECKER INC. $82 (New York symbol SWK; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 160.3 million; Market cap: $13.1 billion; Priceto- sales ratio: 1.3; Dividend yield: 2.4%; TSINetwork Rating: Average; www.stanleyblackanddecker.com) has completed its purchase of Infastech, a Hong Kong-based fastener maker that serves the automotive, electronic, construction and aerospace markets. The purchase price of $850 million is equal to 1.1 times the $778.7 million, or $4.67 a share, that Stanley earned in 2012. Infastech should add $0.20 a share to Stanley’s 2013 earnings.

Thanks to this new business, Stanley now gets 16% of its revenue from emerging markets like Asia and Latin America. It aims to raise this to 20% by 2015.

Stanley Black & Decker is a buy....

APPLE INC. $451 (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 939.1 million; Market cap: $423.5 billion; Price-to-sales ratio: 2.6; Dividend yield: 2.4%; TSINetwork Rating: Average; www.apple.com) is down 36% from its all-time high of $705.07 in September 2012.

Thanks to the huge success of the iPhone and iPad, as well as the star power of the late Steve Jobs, Apple’s co-founder and CEO, the company became a media and broker favourite. However, increasing competition from devices powered by Google’s Android software have hurt Apple’s appeal.

The company still has a loyal customer base and will probably use some of its $137.1 billion in cash and investments to increase is dividend and buy back shares. Even so, the stock will continue to have trouble living up to investors’high expectations.
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PHILIPS ELECTRONICS N.V. ADRs $31 (New York symbol PHG; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 914.6 million; Market cap: $28.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.0%; TSINetwork Rating: Average; www.philips.com) gets about 50% of its revenue by making health care products, such as Xray and magnetic resonance imaging (MRI) scanners. It also makes lighting (30% of revenue) and consumer electronics, such as appliances and electric razors (20%).

The company recently agreed to sell its video and audio products business to Japan’s Funai Electronics for 150 million euros (1 euro = $1.32 Canadian). As part of the deal, it will receive royalties on sales of Philipsbranded products for at least the next five years.

Philips also continues to make progress with a major restructuring plan, which includes making its plants more efficient and cutting 4% of its workforce. Moreover, Philips is expanding sales in emerging markets like Turkey, Russia and China.
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ABB LTD. ADRs $23 (New York symbol ABB; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 2.3 billion; Market cap: $52.9 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.abb.com) is a leading maker of power technologies for utilities, including transformers, transmission systems and circuit breakers. The Switzerland-based company also makes automation systems and robotics that industrial clients use to make their facilities more productive.

ABB is taking advantage of the slow economy to make acquisitions. In May 2012, it paid $3.7 billion for Thomas & Betts Corp., which makes a number of industrial products, including heating and air condi- tioning equipment, electrical connectors and transmission towers for power companies. Combining some of its functions with those of Thomas & Betts could save ABB $200 million a year by 2016.

These new operations pushed up ABB’s revenue by 3.5% in 2012, to $39.3 billion from $38.0 billion in 2011. Without the negative impact of the high U.S. dollar, which hurts the contribution of its overseas operations, revenue would have risen 7% in 2012.
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BHP BILLITON LTD. ADRs $70 (New York symbol BHP; Conservative Growth Portfolio, Resources sector; ADRs outstanding: 2.7 billion; Market cap: $189.0 billion; Price-to-sales ratio: 2.7; Dividend yield: 3.3%; TSINetwork Rating: Average; www.bhpbilliton.com) is the world’s largest mining company, with major operations in Australia, South Africa, Chile and the U.K. Its main products include iron ore, coal, aluminum, manganese, titanium, oil and natural gas.

In the six months ended December 31, 2012, BHP earned $5.7 billion, or $2.14 per ADR. (BHP’s fiscal year ends June 30; each ADR represents two BHP common shares.) That’s down 43.4% from $10.0 billion, or $3.77 per ADR, a year earlier. Lower prices for commodities, particularly iron ore, cut BHP’s gross profits by $5.4 billion in the latest period. Unfavourable exchange rates also lowered earnings by $574 million. Revenue fell 14.1%, to $32.2 billion from $37.5 billion.

In response to weak commodity prices, BHP has agreed to sell $4.3 billion of less-important projects. That includes a deal to sell its remaining diamond operations in Canada for $500 million.
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THE BOEING CO. $85 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 756.2 million; Market cap: $64.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.boeing.com) had to ground all of its new 787 Dreamliner passenger planes in January 2013 after a battery problem forced one to make an emergency landing in Japan.

The 787 uses advanced rechargeable lithium-ion batteries to power its electrical systems. These batteries were overheating, which increases the risk of a fire. The company has redesigned the battery and feels flights will resume in the next few weeks.

The stock fell to $75 after the grounding but has rebounded strongly. That’s mainly due to Boeing’s quick response. Demand for the company’s other planes also remains strong.
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TUPPERWARE BRANDS CORP. $80 (New York symbol TUP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 54.0 million; Market cap: $4.3 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) gets 75% of its sales by making plastic food and beverage containers and children’s educational toys. The remaining 25% comes from cosmetics, bath oils and fragrances. Its main brands include Tupperware, Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare and Nuvo.


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NEWELL RUBBERMAID INC. $26 (New York symbol NWL; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 286.4 million; Market cap: $7.4 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.3%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, window blinds, pens and a number of other household items. Its top brands include Rubbermaid, Sharpie, Paper Mate, Parker, Graco, Waterman and Levolor.

The company has six divisions: Home Solutions makes foodstorage and cooking products (28% of Newell’s 2012 sales); Writing makes pens and markers (24%); Tools makes hand and power tools, as well as accessories (14%); Commercial Products makes cleaning products (13%); Baby & Parenting makes high chairs, car seats and other products for infants (12%); and Specialty makes a variety of products, such as window blinds and paint brushes (9%). Wal-Mart accounts for around 11% of Newell’s sales.

Newell’s sales fell 13.8%, from $6.5 billion in 2008 to $5.6 billion in 2009, mainly because consumers cut spending during the recession. As well, Newell stopped making certain unprofitable products. However, sales rebounded to $5.9 billion in 2012.
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Pat McKeough responds to many personal questions about specific stocks and other topics 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 us about Canada Lithium, which mines a metal used in a highly specialized area. Lithium is a key element in batteries for electric and hybrid vehicles. Pat examines the company’s operations, including two deals with Asian commodities traders, and looks at the longer-term outlook for lithium....

BELLATRIX EXPLORATION (Toronto symbol BXE;www.bellatrixexploration.com) produces oil and natural gas in Alberta, B.C. and Saskatchewan. Gas makes up about 69% of its output; the remaining 31% is oil. In the three months ended December 31, 2012, Bellatrix’s production rose 32.1%, to 18,763 barrels of oil equivalent per day (including natural gas) from 14,209 barrels. Cash flow per share rose 7.1%, to $0.30 from $0.28....

CANADIAN TIRE CORP.(Toronto symbol CTC.A; www.canadiantire.ca) operates 490 Canadian Tire stores, which specialize in automotive, household and sporting goods. The company owns these stores, but franchisees operate most of them. Canadian Tire also operates 299 gas stations and 87 PartSource auto parts stores. In the past few years, the company has diversified its product lines by purchasing retailers with specialized products. These include Mark’s, which sells casual clothing though 386 stores, and Forzani Group, which sells sporting goods through 495 outlets, mainly under the SportChek banner. As well, Canadian Tire will soon complete its $85-million purchase of Pro Hockey Life, which sells hockey equipment through 23 stores....

The long-term outlook for oil and natural gas is positive, although in the short term, shale oil and gas discoveries continue to rapidly increase supply. That’s keeping prices low—and pushing down the shares of producers. We advise against overindulging in any one sector. However, we do think most safety-conscious investors should stick with the energy stocks we rate as buys in Canadian Wealth Advisor. Here is our latest advice on two of them....

Pat McKeough responds to many personal questions about investing in stocks and other topics 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 received a question from an Inner Circle member about Pitney Bowes. This company has been a leader in the manufacture of postage meters and mailing equipment, and Pat assesses its efforts to adapt to the growing predominance of electronic mail and Internet communications. ...

DUNDEE REIT $36.11 (Toronto symbol D.UN; TSINetwork Rating: Speculative) (416-365-3535; www.dundeereit.com; Shares outstanding: 97.7 million; Market cap: $3.7 billion; Dividend yield: 6.1%) owns and manages 22.9 million square feet of office and retail space. The trust has a 95.1% occupancy rate.

In the three months ended December 31, 2012, Dundee REIT’s revenue jumped 51.3%, to $192.0 million from $126.9 million a year earlier. In 2012, Dundee made $2.6 billion of acquisitions and added 9.9 million square feet of office space. These properties supplied most of the revenue increase.

Cash flow jumped 41.4%, to $58.1 million from $41.0 million. However, cash flow per unit fell 8.1%, to $0.57 from $0.62, on more units outstanding (the trust issued new units to pay for the acquired properties).
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CHEMTRADE LOGISTICS INCOME FUND $17.15 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics- .com; Units outstanding: 41.7 million; Market cap: $710.0 million; Dividend yield: 7.1%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base-metal processors. These companies create sulphur, acid and other by-products as part of their activities. Chemtrade converts these substances into useful chemicals, like sulphuric acid.

Chemtrade’s Marsulex subsidiary provides a range of environmental services, including improving air quality and treating and handling industrial waste.

In the three months ended December 31, 2012, Chemtrade’s revenue fell 9.8%, to $223.0 million from $247.2 million a year earlier. The decline mostly reflects lower prices for sulphuric acid on international markets. However, cash flow per unit rose 13.1%, to $0.69 from $0.61.
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INTACT FINANCIAL CORP. $64.30 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 129.6 million; Market cap: $8.6 billion; Dividend yield: 2.7%) is Canada’s largest provider of property and casualty insurance, based on premiums.

In the three months ended December 31, 2012, Intact’s revenue rose 7.2%, to $1.69 billion from $1.58 billion a year earlier.

Before one-time items, Intact earned $1.51 a share in the quarter, up 32.5% from $1.14 a share a year earlier. The insurance business was helped by generally favourable weather. The company also saw higher gains on its investments in the latest quarter.
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INTUITIVE SURGICAL $509.33 (Nasdaq symbol ISRG; TSINetwork Rating: Average) (515-507-5000; www.intuitivesurgical.com; Shares outstanding: 40.1 million; Market cap: $20.7 billion; No dividends paid) makes the da Vinci, a computerized surgical system.

Intuitive fell as low as $493 a share on February 28, 2013, from $570. However, it has since regained a lot of that decline.

The shares fell on a report that the U.S. Food and Drug Administration (FDA) sent out surveys asking surgeons to detail any complications they may have seen with surgeries performed using the da Vinci. The FDA also asked them which procedures they think the system is best and least suited for, and also to describe their training.
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AASTRA TECHNOLOGIES $19.79 (Toronto symbol AAH; TSINetwork Rating: Speculative) (905- 760-4200; www.aastra.com; Shares outstanding: 11.8 million; Market cap: $234.6 million; Dividend yield: 4.1%) reported revenue of $175.2 million in the three months ended December 31, 2012. That was down 12.3% from $199.7 million a year earlier.

Sales declined in all regions, including Western Europe, where Aastra gets the majority of its revenue. Excluding the impact of foreign exchange rates, sales declined 7.1% from a year earlier.

Earnings per share rose sharply, to $2.42 from $1.30, due to a number of one-time items, including income-tax recoveries. Without those items, Aastra would have earned $1.15 a share in the latest quarter.
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WYNDHAM WORLDWIDE $62.70 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973-753-6000; www.wyndhamworldwide.com; Shares outstanding: 136.6 million; Market cap: $8.5 billion; Dividend yield: 1.9%) reports that its revenue rose 9.4% in the three months ended December 31, 2012, to $1.09 billion from $1.0 billion a year earlier. Higher vacation bookings helped push up the company’s occupancy rate by 2.6%.

Before one-time items, the hotel and resort operator’s earnings rose 34.0%, to $0.63 a share from $0.47.

The company has increased its quarterly dividend by 26.1%, to $0.29 from $0.23 a share. The shares now yield 1.9%.
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DOREL INDUSTRIES $39.73 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 31.5 million; Market cap: $1.2 billion; Dividend yield: 3.0%) makes a wide range of products, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational products, mainly bicycles.

In the three months ended December 30, 2012, Dorel’s sales rose 10.9%, to $622.6 million from $561.6 million a year earlier (all figures except share price and market cap in U.S. dollars). Excluding onetime items, earnings per share jumped 37.0%, to $0.63 from $0.46.

The home furnishing division’s revenue rose 7.5% on higher sales of imported furniture, mattresses and futons. The juvenile division’s revenue gained 11.6%, partly due to contributions from recent acquisitions, including Dorel Chile and distributors of children’s products in Colombia and Panama. Strong sales of new bicycle models helped push up the recreational/leisure division’s sales by 12.0%. Sales of the company’s premium Cannondale bicycles were particularly strong.
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STANTEC INC. $43.25 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.0 million; Market cap: $2.0 billion; Dividend yield: 1.5%) sells a range of consulting, project delivery, design and technology services. Stantec’s clients operate in a variety of industries, including transportation, construction and oil and gas.

In the three months ended December 31, 2012, Stantec’s revenue rose 13.3%, to $483.9 million from $432.0 million a year earlier. Acquisitions were one reason for the increase. Stantec is also working on several new projects. Earnings rose 28.0%, to $31.1 million, or $0.67 a share, from $24.3 million, or $0.53.

Stantec continues to grow by acquisition, including purchases of seven companies in 2012. Its most recent addition was Landmark Survey and Mapping, a 24- person firm specializing in surveying and mapping for pipelines. Stantec sees major growth potential in the oil and gas and mining industries.
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HECLA MINING COMPANY $4.21 (New York symbol HL; TSINetwork Rating: Extra Risk) (208-769-4100; www.hecla-mining.com; Shares outstanding: 285.2 million; Market cap: $1.3 billion) is now purchasing Canadian mining company Aurizon Mines Ltd. (Toronto symbol AZK) for $796 million. Aurizon shareholders can choose to receive $4.75 a share in cash or 0.9953 of a Hecla share.

In January 2013, Aurizon rejected a takeover offer from Alamos Gold (Toronto symbol AGI), which held 14% of Aurizon’s stock. Alamos offered 0.2801 of its shares for each Aurizon share. However, Alamos’s shares have dropped since the offer, which is now worth $4.00 per Aurizon share, based on Alamos’s current price of $14.29.

Hecla expects its current mines to produce 8 million to 9 million ounces of silver this year, while Aurizon forecasts 125,000 to 130,000 ounces of gold production at its Casa Berardi mine in Quebec. Aurizon is also developing other gold properties.
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ENERFLEX LTD., $13.01 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 77.7 million; Market cap: $1.0 billion; Dividend yield: 2.2%) 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, which is converted to liquefied natural gas (LNG) for shipping.

In the quarter ended December 31, 2012, Enerflex’s revenue rose 9.8%, to $421.6 million from $383.8 million a year ago. Earnings per share rose 59.1%, to $0.35 from $0.22, due to the higher revenue and improved profit margins.
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ACI WORLDWIDE $47 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402- 334-5101; www.tsainc.com; Shares outstanding: 39.4 million; Market cap: $1.9 billion; No dividends paid) reported 66.0% higher revenue in the three months ended December 31, 2012, to $224.1 million from $135.0 million a year earlier. The February 2012 acquisition of S1Corp. was the main reason for the gain. Without one-time items, earnings per share jumped 80.3%, to $1.37 from $0.76.

The company’s outlook is positive, and it is well positioned to profit from global growth in payment processing. However, the stock is up over 23% since November 2012 and now trades at a high 29.4 times the company’s forecast 2013 earnings of $1.60 a share.

ACI Worldwide is a hold.

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ADOBE SYSTEMS $41.59 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 498.8 million; Market cap: $20.8 billion; No dividends paid) makes software that lets computer users create, edit and share documents in the popular PDF format. As well, graphic designers use its software to create print publications and web pages.

Excluding one-time items, Adobe’s earnings fell 7.4% in the three months ended November 30, 2012, to $307.9 million from $332.6 million a year earlier. Earnings per share declined 9.0%, to $0.61 from $0.67, on more shares outstanding.

Revenue was flat at $1.15 billion, although it did exceed the consensus estimate of $1.1 billion. The company continues to spend over 17% of its revenue on research.
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