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CAE INC. $11 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 259.2 million; Market cap: $2.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.8%; TSINetwork Rating: Average; www.cae.com) recently sold seven flight simulators and related equipment....

TRANSCANADA CORP. $49 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 705.0 million; Market cap: $34.5 billion; Price-to-sales ratio: 4.0; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.transcanada.com) has received approval from Nebraska’s governor for its plan to reroute the proposed Keystone XL pipeline around environmentally sensitive areas of the state.

The company is currently building Keystone XL in sections. When completed, it would pump oil from Alberta to the U.S. Gulf Coast. The final project still needs various approvals, including from the U.S. State Department. Even so, Nebraska’s consent makes Keystone XL’s approval more likely.

TransCanada is a buy.

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CANADIAN PACIFIC RAILWAY LTD. $113 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 173.9 million; Market cap: $19.7 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.2%; TSINetwork Rating: Above Average; www.cpr.ca) is improving its efficiency with new locomotives and software that optimizes train loads and speeds.

CP’s earnings fell 15.1% in 2012, to $484 million, or $2.79 a share. In 2011, the company earned $570 million, or $3.34 a share. However, if you disregard costs related to CP’s recently announced plan to cut 25% of its workforce, as well as writedowns of locomotives and other assets, its earnings per share would have risen 37.8%, to $4.34 from $3.15. Revenue rose 10.0%, to $5.7 billion from $5.2 billion.

The company’s operating ratio worsened to 83.3% from 81.3% a year ago. However, its restructuring should cut this figure to around 70% in 2013.

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CANADIAN NATIONAL RAILWAY CO. $96 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 428.4 million; Market cap: $41.1 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.cn.ca) earned $2.5 billion in 2012. That’s up 11.9% from $2.2 billion in 2011. The company spent $1.4 billion on share buybacks during the year. Because of fewer shares outstanding, earnings per share rose 15.9%, to $5.61 from $4.84.

Revenue rose 9.9%, to $9.9 billion from $9.0 billion. The company continues to benefit from rising trade between North America and Asia. CN also raised its freight rates and fuel surcharges.

CN’s operating costs rose 9% in 2012, mainly due to higher labour and fuel expenses. Even so, CN’s operating ratio improved to 62.9% from 63.5%. (Operating ratio is calculated by dividing a company’s regular operating costs by its revenue. The lower the ratio, the better.)

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LOBLAW COMPANIES LTD. $41 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 281.5 million; Market cap: $11.5 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.loblaw.ca) is Canada’s largest food retailer, with roughly 1,000 stores. George Weston Ltd. (Toronto symbol WN) owns 63% of the company’s shares.

Loblaw has announced a plan to form a real estate investment trust (REIT) that will hold most of its real estate assets.

Right now, the company owns 47 million square feet of real estate with a market value of $9 billion to $10 billion. Loblaw will transfer 35 million square feet of these properties—including stores, warehouses and office buildings—to the REIT. Loblaw will then rent these properties from this new trust. After the company closes this transaction in mid- 2013, it will sell units of the REIT to the public. Loblaw will hang on to a majority stake.

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MANITOBA TELECOM SERVICES INC. $32 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 67.0 million; Market cap: $2.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 5.3%; TSINetwork Rating: Average; www.mtsallstream.com) gets around 55% of its revenue from its 1.3 million telephone and wireless customers in Manitoba.

The remaining 45% comes from its Allstream division, which sells integrated telephone, Internet and other communication services to businesses across Canada. Manitoba Telecom is now conducting a strategic review of Allstream. This could lead to a sale of some or all of this business.

Allstream is profitable, but while it accounts for almost half of Manitoba Telecom’s revenue, it only contributes 18% of the company’s operating earnings. So selling the division would let Manitoba Telecom expand its more profitable operations.

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TELUS CORP. (Toronto symbols T $68 and T.A $68; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 326.0 million; Market cap: $22.2 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.telus.com) has received court approval for its plan to convert its 151 million non-voting class A shares into regular common shares (which have one vote each) on a one-for-one basis.

The company converted the shares in the U.S. on February 4, 2013. The move dilutes common shareholders’ voting power, but it lets the common shares trade on the New York Stock Exchange (symbol TU). Previously, only the non-voting shares traded on New York. The change should make the common shares more liquid. Telus will make the conversion in Canada on February 11, 2013.

Telus A stock is a buy.

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RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 299.0 million; Market cap: $8.1 billion; Price-to-sales ratio: 5.3; Dividend yield: 5.2%; TSINetwork Rating: Average; www.riocan.com) has agreed to buy a mall in Oakville, Ontario, plus 50% of another mall in Burlington, Ontario. Right now, Primaris Retail Real Estate Investment Trust (Toronto symbol PMZ.UN) owns these malls. RioCan will buy them from a consortium that has launched a friendly takeover for Primaris. The $362-million price is equal to 4% of RioCan’s market cap.

The new malls will give RioCan more flexibility to attract tenants with leases that include space in its other Toronto-area malls.

RioCan is a buy.

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BLACKBERRY $16 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.0 million; Market cap: $8.4 billion; Price-to-sales ratio: 0.7; No dividends paid; TSINetwork Rating: Above Average; www.blackberry.com) is the new name of Research in Motion Ltd. (old symbol RIM). (Note: The company’s legal name will remain Research in Motion until shareholders approve the name change at the next annual meeting.)

The company recently launched two smartphones powered by its new BlackBerry 10 software: the BlackBerry Z10 uses a 4.2-inch touch-screen interface, while the BlackBerry Q10 features a smaller screen and a physical keyboard.

BlackBerry has already started selling the Z10 in Canada, the U.K. and other countries. The company will launch the new phone in the U.S. in March. It should launch the Q10 in April.

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TIM HORTONS INC. $49 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 154.5 million; Market cap: $7.6 billion; Price-to-sales ratio: 2.5; Dividend yield: 1.7%; TSINetwork Rating: Average; www.timhortons.com) is the largest fast-food company in Canada, with 3,365 outlets that mainly serve coffee and donuts. However, the company is attracting new customers with other foods, such as sandwiches and soups.

Tim Hortons’ success in Canada is helping it expand in other countries.

For example, many Tim Hortons outlets now sell ice cream through the company’s alliance with U.S.-based Cold Stone Creamery. That helps them attract more customers in the afternoon and evening. As part of this deal, Cold Stone sells Tim Hortons coffee and other products in its upscale ice cream parlours. In addition, the company continues to build new stores in the U.S.; it now has 755 outlets in that country. Most of Tim Hortons’ U.S. stores are in states along the Canadian border, where they can attract cross-border shoppers.

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MOLSON COORS CANADA INC. (Toronto symbols TPX.A $44 and TPX.B $44; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 181.2 million; Market cap: $8.0 billion; Price-to-sales ratio: 2.3; Dividend yield: 2.9%; TSINetwork Rating: Average; www.molsoncoors.com) continues to benefit from the 2005 merger of Canada’s Molson brewing operations with those of U.S.-based Coors. The combined company later merged its U.S. business with rival Miller Brewing Company.

The ongoing savings from these mergers has helped Molson Coors, which is the world’s seventhlargest brewer by volume, to compete with larger multinational brewers.

Molson Coors now aims to expand in emerging markets, where beer sales are growing faster than its main markets of North America and the U.K. That’s why it paid $3.4 billion for StarBev LP in June 2012. StarBev owns nine breweries in Central and Eastern Europe (all amounts except share prices and market cap in U.S. dollars).

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THOMSON REUTERS CORP. $31 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 826.5 million; Market cap: $25.6 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.thomsonreuters.com) gets 57% of its revenue and 50% of its earnings by selling news and information to professionals in the banking industry. It also sells specialized information products to clients in the legal, accounting and scientific research fields.

The company was already a well-established specialized information provider before it merged with the Reuters news agency in 2008. That deal gave the combined company even more information to sell. It also cut its reliance on North America. Thomson Reuters now gets 57% of its revenue from the Americas, followed by Europe (31%) and Asia (12%).

In addition, the Reuters merger helped the company launch its new Eikon terminals, which deliver real-time news and financial data to securities traders and portfolio managers. Even as the uncertain global economy prompted banks and other financial service businesses to scale back their spending, the number of Eikon users rose 35% in the third quarter of 2012 from the second quarter.

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CGI GROUP INC. $27 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 308.0 million; Market cap: $8.3 billion; Price-to-sales ratio: 1.3; No dividends paid; TSINetwork Rating: Extra Risk; www. cgi.com) continues to benefit from its $2.7-billion purchase of Logica plc in August 2012. This U.K.-based firm provides computer outsourcing services in 36 countries.

Thanks to these new operations, CGI’s revenue in its fiscal 2013 first quarter, which ended December 31, 2012, jumped 145.4% to $2.5 billion from $1.0 billion a year earlier. If you exclude integration costs and other unusual items, earnings rose 29.4%, to $137.8 million from $106.5 million. Earnings per share rose 10.0%, to $0.44 from $0.40, on more shares outstanding.

CGI booked $2.8 billion of new contracts during the quarter, up 104.4% from $1.4 billion a year earlier. Its order backlog is now $18.3 billion.

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METRO INC. $64 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 96.2 million; Market cap: $6.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.metro.ca) is Canada’s third-largest supermarket operator after Loblaw (see page 21) and Sobeys. The company has about 600 supermarkets in Quebec and Ontario. It also operates 260 drugstores under the Brunet, The Pharmacy and Drug Basics banners.

The company recently sold roughly half of its stake in Alimentation Couche-Tard Inc. (Toronto symbol ATD.B), which operates convenience stores in North America and Norway. (Couche-Tard is a recommendation of Stock Pickers Digest, our newsletter that focuses on aggressive investing.) That left Metro with a 5.7% economic interest and a 17.0% voting interest in Couche-Tard.

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INTUITIVE SURGICAL (Nasdaq symbol ISRG; www.intuitivesurgical.com) makes the da Vinci, a computerized surgical system a computerized surgical system for use in prostate surgery and other procedures. Guided by a miniature camera connected to a 3-D monitor, surgeons use the da Vinci to operate by remotely manipulating tiny robotic arms. This process is safer and much less invasive than regular surgery and helps cut a patient’s recovery time and post-operative discomfort. It also reduces scarring and infection risk....

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, Pat received a question from an Inner Circle member about a stock that provides a different approach to excavating for the petroleum and utility industries. Pat assesses the company’s unique arrangement with its operating partners and whether or not it can continue to improve its results in a recovering economy....

METRO INC. (Toronto symbol MRU; www.metro.ca) has moved up sharply in the past few months. That’s mainly because it is taking steps to unlock some of its hidden value, including selling some of its investments....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investing advice on a wide range of investing topics. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Tip of the week: “Even for the most seasoned traders, futures represent a risky speculation on the movement of prices.”...

TIM HORTONS (Toronto symbol THI; www.timhortons.com) operates 3,365 coffee-and-donut shops in Canada, 755 in the U.S. and 18 in the Middle East. The company’s new menu items, such as lattes and panini sandwiches, continue to sell well. In addition, Tim Hortons now offers free Wi-Fi Internet access at its Canadian outlets. That’s helping it compete with bigger fast-food chains like McDonald’s, which is aggressively promoting its coffee in Canada....

Investors who are looking for a stock market trading strategy are certain to come across the basic ways to make investment decisions: bottom-up and top-down. With the bottom-up approach, you focus on understanding what’s going on, rather than trying to predict what happens next. You could call this descriptive finance. You delve into earnings, dividends, sales, balance sheet structure, competitive advantages and so on....

MOTOROLA SOLUTIONS INC. $61 (New York symbol MSI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 276.0 million; Market cap: $16.8 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.7%; TSINetwork Rating: Average; www.motorolasolutions.com) makes specialized electronic equipment, such as bar-code scanners and radios for police and fire vehicles. It gets 69% of its revenue by selling its products to governments; the U.S. government is the company’s largest single customer, accounting for 7% of its overall revenue. Businesses supply the remaining 31% of Motorola Solutions’revenue.

The company took its current form on January 4, 2011. That’s when Motorola Inc. spun off of its struggling cellphone business, Motorola Mobility, as a separate company. Following the transaction, the remaining operations became Motorola Solutions.

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CAMPBELL SOUP CO. $40 (New York symbol CPB; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 314.4 million; Market cap: $12.6 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.campbellsoupcompany. com) aims to increase its Mexican sales through new alliances with two of that country’s leading food makers. As a result, Campbell will close its plant in Mexico. It expects to pay $6 million in severance and other costs.

Meanwhile, Campbell earned $220 million in the three months ended January 27, 2013. That’s up 6.3% from $207 million a year earlier. Earnings per share rose 9.4%, to $0.70 from $0.64, on fewer shares outstanding. Sales rose 10.5%, to $2.3 billion from $2.1 billion, mainly due to a recent acquisition.

Campbell Soup is a buy.

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SHERWIN-WILLIAMS CO. $159 (New York symbol SHW; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 103.1 million; Market cap: $16.4 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.3%; TSINetwork Rating: Above Average; www.sherwin-williams.com) has raised its quarterly dividend by 28.2%, to $0.50 a share from $0.39. The new annual rate of $2.00 yields 1.3%. Sherwin has now raised its dividend for 34 consecutive years.

The company recently agreed to buy privately held Consorcio Comex, Mexico’s largest paint and coating maker. Comex sells its products through 3,300 stores in Mexico, 240 in the U.S. and 78 in Canada.

Sherwin will pay $2.3 billion, including assumed debt, when the sale closes later this year. Expanding by acquisition, particularly in foreign countries, adds risk. The stock is also expensive at 20.7 times Sherwin’s likely 2013 earnings of $7.68 a share.

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TERADATA CORP. $62 (New York symbol TDC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 169.1 million; Market cap: $10.5 billion; Priceto- sales ratio: 4.0; No dividends paid; TSINetwork Rating: Average; www.teradata.com) earned $2.85 a share in 2012. That’s up 22.8% from $2.32 in 2011. Revenue rose 12.8%, to $2.7 billion from $2.4 billion.

However, Teradata expects its revenue to rise by just 6% to 10% in 2013. That’s because the uncertain economy is hurting demand for its analytics services, which help businesses gather and analyze large amounts of data, including customer purchasing patterns. The stock is down 23.5% from its peak of $81 in September 2012. Even so, it trades at a high 19.9 times the company’s likely 2013 earnings of $3.12 a share.

Teradata is a hold.

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INTERNATIONAL FLAVORS & FRAGRANCES INC. $72 (New York symbol IFF; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.6 million; Market cap: $5.9 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.iff.com) produces compounds that improve the taste of food and make consumer products smell better.

In 2012, IFF’s sales rose 1.2%, to $2.82 billion from $2.79 billion in 2011. The company gets 75% of its sales from outside the U.S., and the high U.S. dollar is hurting the contribution of these businesses. Without the negative impact of currency exchange rates, sales would have risen 4%. Earnings per share rose 6.4%, to $3.98 from $3.74.

The company continues to expand in fast-growing markets like China, India and Turkey. These investments should push up its earnings to $4.40 a share in 2013, and the stock trades at 16.4 times that estimate. The $1.36 dividend yields 1.9%.

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