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TELUS CORP. $70 (Toronto symbol T; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 326.8 million; Market cap: $22.9 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.telus.com) now gets 54% of its revenue and 62% of its earnings from its 7.7 million wireless subscribers across Canada.

The remaining 46% of Telus’s revenue and 38% of earnings come from its wireline division, which mainly consists of 3.4 million traditional phone customers in B.C., Alberta and eastern Quebec. This business also includes 1.4 million Internet users and 678,000 TV customers.

Telus’s revenue fell 0.5%, from $9.7 billion in 2008 to $9.6 billion in 2009, but rose to $10.9 billion in 2012. Earnings fell 11.5%, from $1.1 billion, or $3.52 a share, in 2008 to $998 million, or $3.14 a share, in 2009. However, earnings rebounded to $1.3 billion, or $4.03 a share, in 2012.
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ENBRIDGE INC. (Toronto symbol ENB; www.enbridge.com) gets 90% of its revenue from pipelines that pump oil and gas from western Canada to eastern Canada and the U.S. The remaining 10% mainly comes from distributing gas to 2 million consumers in Ontario, Quebec and parts of New York State....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network....

SHERRITT INTERNATIONAL (Toronto symbol S; www.sherritt.com) is a natural resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 356 megawatts of power generation capacity in Cuba, with an additional 150 megawatts starting up this year. The company is a major nickel producer, with operations in Cuba and Canada. As well, it is now starting up its 40%-owned Ambatovy mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and is Canada’s largest thermal coal producer....

MAPLE LEAF FOODS INC. (Toronto symbol MFI; www.mapleleaf.ca) is Canada’s largest food processing company. It mainly sells its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. Through 90.0%-owned Canada Bread, the company also makes fresh and frozen bread, pastries and pasta. Maple Leaf is starting to see the benefits of a major restructuring plan, which includes building new plants and eliminating unprofitable products. It’s also installing a new computer system that will give its managers more timely information....

Pat McKeough responds to many personal questions on investing in 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. In the past week, we had a question from an Inner Circle member on a company that makes metal products, chiefly for transportation. Trinity Industries relies heavily on shipments of industrial products and natural resources, and Pat looks at whether it can continue to push up its revenue and profits in a sluggish economy. ...

Chinese stocks are down 12% since the start of this year. The markets have been reflecting investor worries that the country’s economic growth will continue to lag along with its exports to Europe and the U.S. China’s inflation rate is also rising, which could make it more difficult to spur growth through stimulus spending or lower interest rates. Still, the long-term outlook is bright....

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: “When you have the discipline to keep only the stocks you have the most confidence in, you find that fewer stocks lead to greater opportunities.”...

MCKESSON CORP. $107 (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 232.9 million; Market cap: $24.9 billion; Price-to-sales ratio: 0.2; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www. mckesson.com) is the largest wholesale drug distributor in the U.S. and Canada. It also owns 49% of Mexico’s largest drug distributor.

McKesson’s clients include 40,000 pharmacies, as well as doctor’s offices, hospitals and clinics. It also sells surgical tools and health and beauty products.

The company continues to expand its technology solutions division, which makes computers and software that help clinics and pharmacies manage their drug inventories. This division accounts for just 3% of McKesson’s revenue but supplies 15% of its earnings.
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J.P. MORGAN CHASE & CO. $49 (New York symbol JPM; Income Portfolio, Finance sector; Shares outstanding: 3.8 billion; Market cap: $186.2 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.1%; TSINetwork Rating: Average; www.jpmorganchase.com) earned a record $6.5 billion in the three months ended March 31, 2013. That’s up 32.6% from $4.9 billion a year earlier. Earnings per share rose 33.6%, to $1.59 from $1.19, on fewer shares outstanding.

Morgan’s revenue in the quarter fell 3.6%, to $25.1 billion from $26.1 billion. The slow economy is hurting loan demand. The bank is also placing new loans at lower interest rates. However, more borrowers are repaying their loans on time: Morgan set aside $617 million to cover bad loans, down 15.0% from $726 million.

J.P. Morgan Chase is a buy....

BROADRIDGE FINANCIAL SERVICES INC. $24 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 121.9 million; Market cap: $2.9 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.0%; TSINetwork Rating: Average; www.broadridge.com) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. The company processes 85% of all proxy votes in the U.S.

The U.S. Patent and Trademark Office recently confirmed one of the company’s key patents, which covers how Broadridge creates and organizes data that mutual fund operators must file with the Securities and Exchange Commission. Broadridge’s unique system makes it easier for brokerage firms, insurance companies and pension plans to access this information in a timely manner. Reaffirming this patent will help Broadridge maintain its leading position in this niche market.

Broadridge is a buy.

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FAIR ISAAC CORP. $44 (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.5 million; Market cap: $1.6 billion; Price-to-sales ratio: 2.2; Dividend yield: 0.2%; TSINetwork Rating: Average; www.fico.com) makes FICO Scores, a computer program that helps businesses make better decisions about customer creditworthiness. The company also makes software that helps credit card issuers control fraud and analyze cardholders’spending patterns.

The company has paid an undisclosed sum for Infoglide Software Corp. This privately held firm makes programs that help businesses and government agencies detect identity theft, money laundering and other fraudulent activities. It does this by simultaneously searching a wide variety of databases for hidden relationships between people, places and things. For example, Infoglide’s technology can quickly check to see if a witness to an insurance claim has a connection to a known fraudster.

Fair Isaac is a buy.

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YUM! BRANDS INC. $69 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 450.7 million; Market cap: $31.1 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.yum.com) earned $0.70 a share in the first quarter of 2013, down 7.9% from $0.76 a year earlier. Sales fell 7.6%, to $2.5 billion from $2.7 billion.

These declines are mainly due to bad publicity over allegations that Yum’s KFC outlets in China bought raw chicken with higherthan- permitted levels of antibiotics. As a result, profits at the China division (45% of sales) fell 39.8% in the quarter. However, Chinese regulators did not charge Yum with violating safety standards.

Yum Brands is still a buy....

IDEXX LABORATORIES INC. $84 (Nasdaq symbol IDXX; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 54.6 million; Market cap: $4.6 billion; Priceto- sales ratio: 3.6; No dividends paid; TSINetwork Rating: Average; www.idexx.com) gets 83% of its revenue by making equipment that veterinarians use to detect diseases in pets. The remaining 17% comes from sales of systems that detect contaminants in livestock and water.

The company continues to enjoy strong demand for its new Pro-Cyte Dx hematology analyzer, which processes animal blood tests in just two minutes. That makes veterinarians less reliant on outside labs, and lowers their costs. This new model is attracting new customers and encouraging many of Idexx’s existing customers to upgrade.

In the three months ended March 31, 2013, Idexx earned $44.9 million, up 10.1% from $40.7 million a year earlier. Earnings per share rose 12.5%, to $0.81 from $0.72, on fewer shares outstanding. Revenue rose 2.9%, to $332.1 million from $322.7 million. Idexx spent 6.6% of its revenue on research in the quarter.
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PETSMART INC. $67 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 102.7 million; Market cap: $6.9 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.petm.com) operates 1,269 pet stores in the U.S. and Canada. It also has 195 in-store PetsHotels, which look after pets while their owners are away.

In its 2013 fiscal year, which ended February 3, 2013, PetSmart’s earnings rose 34.2%, to $389.5 million from $290.2 million in fiscal 2012. The company spent $457 million on share buybacks during the year. Due to fewer shares outstanding, earnings per share rose 39.2%, to $3.55 from $2.55.

Sales rose 10.6%, to $6.8 billion from $6.1 billion. That’s mainly because same-store sales rose 6.3%, while sales of pet services, such as grooming and Pets- Hotel stays, increased 9.7%. Services accounted for 11.0% of PetSmart’s revenue, unchanged from the prior year. Sales also benefited from 46 new stores and four new PetsHotels.
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THE BOEING CO. $91 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 756.2 million; Market cap: $68.8 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.boeing.com) has received approval from U.S. regulators for its redesigned battery system for the 787 Dreamliner passenger plane. Regulators grounded all 787s in January 2013 after an overheated battery forced one to make an emergency landing in Japan.

Remodelling the battery and delays in delivering new planes probably cost Boeing $600 million. That’s equal to 8% of the $7.2 billion, or $5.88 a share, it earned in 2012. However, the new battery design should make it easier for Boeing to attract new buyers for the 787.

Boeing is a buy....

NEWMONT MINING CORP. $34 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 496.8 million; Market cap: $16.9 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.0%; TSINetwork Rating: Average; www.newmont.com) produced 1.2 million ounces of gold in the first quarter of 2013, down 10.9% from a year earlier. That’s because colder-than-normal winter weather hurt production at its mine in Nevada. However, it still expects to produce 4.8 million to 5.1 million ounces in 2013.

Newmont remains our top gold stock. Its reserves should last decades, and most of its production is in politically stable areas. However, gold prices have fallen in the last six months and could remain under pressure, particularly if European governments sell their gold reserves to deal with their financial problems.

Newmont is now a hold....

HILLSHIRE BRANDS CO. $35 (New York symbol HSH; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 122.9 million; Market cap: $4.3 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.4%; TSINetwork Rating: Average; www.hillshirebrands.com) makes a variety of packaged meat products. Its main brands include Ball Park hot dogs, Jimmy Dean sausages and Hillshire Farm deli meats.

In its 2013 second quarter, which ended December 31, 2012, Hillshire’s sales rose 0.7%, to $1.06 billion from $1.05 billion a year earlier. If you disregard the contribution of a business that the company sold, sales would have risen 2.5%. Without unusual items, earnings per share rose 29.2%, to $0.62 from $0.48.

The earnings increase is partly due to savings from plant closures and layoffs. These moves should cut its costs by $100 million a year by the end of fiscal 2015.
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GENERAL MILLS INC. $49 (New York symbol GIS, Conservative Growth Portfolio, Consumer sector; Shares outstanding: 644.3 million; Market cap: $31.6 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.generalmills.com) is one of the world’s largest food makers. Its top brands include Big G (cereal), Green Giant (canned and frozen vegetables), Pillsbury (baking dough), Old El Paso (tacos) and Progresso (soups and sauces).

In its fiscal 2013 third quarter, which ended February 24, 2013, General Mills’sales rose 7.5%, to $4.4 billion from $4.1 billion a year earlier. That’s mainly due to Yoki, a Brazilian snack food and seasoning maker that General Mills bought in August 2012. Without acquisitions, sales would have risen 2%.

Earnings rose 14.9%, to $420.9 million from $366.4 million. Earnings per share rose 16.4%, to $0.64 from $0.55, on fewer shares outstanding. These figures exclude a number of unusual items, such as costs to integrate new operations, and gains and losses on hedging contracts that General Mills uses to lock in prices of certain ingredients.
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KRAFT FOODS GROUP INC. $51 (Nasdaq symbol KRFT; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 593.4 million; Market cap: $30.3 billion; Price-to-sales ratio: 1.7; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.kraftfoodsgroup.com) makes a variety of grocery products, including Kraft macaroni and cheese, Oscar Mayer meats, Philadelphia cream cheese, Maxwell House coffee, Jell-O desserts and Miracle Whip salad dressing.

Unlike Mondelez, Kraft prefers to focus on North America. That limits its growth but also cuts its risk.

As a stand-alone company, Kraft earned $1.6 billion, or $2.75 a share, in 2012. That’s down 7.5% from $1.8 billion, or $3.00 a share, in 2011. The decline is mainly due to costs related to a restructuring, which includes closing plants and making its remaining operations more efficient. Kraft expects to spend $650 million on this plan by the end of 2014.
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MONDELEZ INTERNATIONAL INC. $31 (Nasdaq symbol MDLZ; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.8 billion; Market cap: $55.8 billion; Price-to-sales ratio: 1.6; Dividend yield: 1.7%; TSINetwork Rating: Above Average; 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.

Mondelez aims to improve its efficiency by shutting less profitable plants and offices. Severance and other costs will total $925 million. The company didn’t say how much it expects the restructuring will save it after it is completed in 2014. However, Mondelez will probably use these savings to cut its long-term debt of $15.6 billion, which is equal to 28% of its market cap.

If you assume the October 2012 breakup of the old Kraft Foods Inc. into Mondelez and Kraft Foods Group (see right) occurred at the start of 2011, Mondelez would have earned $1.6 billion, or $0.86 a share, in 2012. That’s down 9.8% from $1.7 billion, or $0.97 a share, in 2011. If you exclude restructuring costs and other unusual items, per-share earnings would have risen by 0.7%, to $1.39 from $1.38,
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CONAGRA FOODS INC. $35 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 416.8 million; Market cap: $14.6 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www. conagrafoods.com) makes a variety of packaged foods, including Chef Boyardee canned pasta, Hunt’s tomato sauce, Peter Pan peanut butter, Orville Redenbacher popcorn and Reddiwip whipped cream.

The company recently completed its $4.75-billion acquisition of Ralcorp Holdings, the largest maker of private-label food in the U.S.

The purchase helped push up ConAgra’s sales by 13.4% in its 2013 third quarter, which ended February 24, 2013, to $3.85 billion from $3.4 billion a year earlier. Ralcorp contributed $291.8 million to the latest sales. In addition, ConAgra raised its prices on its branded products to offset higher ingredient costs.
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HEWLETT-PACKARD CO. $20 (New York symbol HPQ; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.9 billion; Market cap: $38.0 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.7%; TSINetwork Rating: Average; www.hp.com), like IBM (see left), wants to cut its reliance on selling computer hardware. However, it has faced some setbacks.

In 2011, the company considered spinning off its personal computer and printer operations, which together account for 50% of its revenue. It eventually decided to hang onto these businesses and make them more profitable instead.

Hewlett also wants to expand its software division, which supplies just 3% of its revenue. That’s why it paid $11.0 billion for U.K.-based Autonomy in October 2011. This company’s software helps businesses organize information in different formats, including email and web pages.
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INTERNATIONAL BUSINESS MACHINES CORP. $192 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $211.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.ibm.com) started up in 1911, which makes it the world’s oldest computer company. Today, it operates in over 170 countries.

IBM continues to shift out of less profitable businesses, like making personal computers, and toward more promising activities, such as designing computer systems and managing them for clients. Long-term maintenance contracts give IBM more dependable revenue streams; services now supply 56% of its sales.

The company is also expanding its software business. It’s particularly interested in developing analytics software, which helps businesses and governments gather and analyze a wide variety of data. For example, IBM’s Smarter Planet initiative combines advanced hardware and software to help clients solve complex problems, such as traffic congestion. Software supplies 24% of IBM’s revenue.
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SNC-LAVALIN GROUP INC. (Toronto symbol SNC; www.snclavalin.com) has held up well in the face of negative press coverage, beginning with $56 million U.S. in unusual payments it made in 2011 to help win Libyan construction contracts. Lately, the company has come under scrutiny over allegations of widespread corruption in the Quebec construction industry. SNC’s quick response to these situations, including replacing its chief executive officer and other executives, helped prevent permanent damage to its 102-year-old reputation. It has also brought in stronger oversight and compliance procedures....