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SUNCOR ENERGY INC. $34 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $51.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.suncor.com) will spend $6.65 billion to upgrade its operations in 2012, down 11.3% from its earlier forecast of $7.5 billion. That’s mainly due to lowerthan- expected costs to expand its Firebag oil sands project in Alberta. The new addition should begin operating by the end of 2012—three months ahead of schedule.

The recent drop in oil prices has also prompted Suncor to slow the development of three other big oil sands projects. However, lower oil prices are boosting profits at Suncor’s refineries. As a result, cash flow per share rose 2.9% in the three months ended September 30, 2012, to $1.78 from $1.73 a year earlier.

Suncor is a buy.

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AGRIUM INC. $95 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 149.0 million; Market cap: $14.2 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.1%; TSINetwork Rating: Average; www.agrium.com) gets 60% of its sales from stores that sell fertilizers to farmers. It also makes fertilizers from natural gas, and other fertilizers such as potash and phosphate.

In the three months ended September 30, 2012, earnings fell 26.6%, to $215 million, or $1.34 a share, from $293 million, or $1.85 a share a year earlier (all amounts except share price and market cap in U.S. dollars). Sales fell 5.7%, to $3.0 billion from $3.1 billion. Weak demand for potash offset strong sales of other fertilizers.

Partly due to pressure from activist investor Jana Partners, which owns about 4% of Agrium’s shares, the company recently doubled its dividend to $2.00 a share from $1.00. The stock now yields 2.1%. It also spent $900 million (Cdn.) on share buybacks.

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POTASH CORP. OF SASKATCHEWAN $40 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 861.6 million; Market cap: $34.5 billion; Price-to-sales ratio: 4.1; Dividend yield: 2.1%; TSINetwork Rating: Average; www.potashcorp.com) is the world’s largest fertilizer producer. It has six potash mines in Saskatchewan and one in New Brunswick.

The company has faced delays in securing new supply contracts with buyers in China. That has lowered its potash shipments. As well, the Indian government has cut fertilizer subsidies.

As a result, Potash Corp.’s earnings fell 21.9% in the three months ended September 30, 2012, to $645 million or $0.74 a share (all amounts except share price and market cap in U.S. dollars). A year earlier, it earned $826 million, or $0.94 a share. Sales fell 7.7%, to $2.1 billion from $2.3 billion.

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PENGROWTH ENERGY CORP. $5.59 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 507.1 million; Market cap: $2.8 billion; Price-to-sales ratio: 1.8; Dividend yield: 8.6%; TSINetwork Rating: Average; www.pengrowth.com) has suffered from low natural gas prices, same as Encana. That’s why in May 2012 it bought NAL Energy Corp., which gets roughly half of its production from higher-priced oil. Thanks to this purchase, Pengrowth’s daily production rose 26.4% in the three months ended September 30, 2012, to a record 94,284 barrels of oil equivalent from 74,568 a year ago. Natural gas accounted for 60% of its production, down from 63% a year earlier.

Depressed natural gas prices pushed down Pengrowth’s cash flow by 6.2% in the quarter, to $141.1 million from $150.4 million a year earlier. Cash flow per share fell 39.1%, to $0.28 from $0.46, on more shares outstanding. Even so, the extra production from NAL should let Pengrowth keep paying monthly dividends of $0.04 a share (for an 8.6% annualized yield).

Pengrowth is still a buy.

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TRANSCANADA CORP. $45 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 705.0 million; Market cap: $31.7 billion; Price-to-sales ratio: 3.6; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.transcanada.com) has won contracts to build and operate two pipelines that will supply natural gas to government-owned power plants in Mexico.

These lines will cost $1.4 billion U.S., and should begin operating in 2016. TransCanada has 25-year contracts with Mexico’s federal power company, which cuts the risk of these investments. These deals should help the company win even more business as Mexico continues to convert its power plants from coal to gas.

TransCanada is a buy.

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TORSTAR CORP. $8.01 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.7 million; Market cap: $638.4 million; Price-to-sales ratio: 0.4; Dividend yield: 6.6%; TSINetwork Rating: Above Average; www.torstar.com) publishes The Toronto Star, Canada’s largest daily newspaper by circulation. It also publishes three other daily papers and over 110 weeklies, mainly in Southern Ontario. The company also owns a hidden asset in Harlequin Enterprises Ltd., the world’s leading romance novel publisher.

Ad revenue from Torstar’s newspapers is shrinking faster than we thought. As well, revenue from its web sites has so far failed to make up the difference. Strong competition and unfavourable foreign exchange rates are also hurting profits at Harlequin. As a result, Torstar’s earnings fell 44.0% in the three months ended September 30, 2012, to $14.1 million, or $0.18 a share, from $25.2 million, or $0.32 a share, a year earlier.

The company continues to cut costs by laying off workers and selling surplus real estate. These moves should save it $5.2 million in the fourth quarter of 2012 and an additional $9.5 million in 2013. If you exclude severance costs and other one-time items, Torstar’s earnings per share would have fallen 21.6%, to $0.29 from $0.37.

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TRANSCONTINENTAL INC. $10 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 80.6 million; Market cap: $806.0 million; Price-to-sales ratio: 0.4; Dividend yield: 5.8%; TSINetwork Rating: Average; www.tctranscontinental.com) gets two-thirds of its revenue from its commercial printing business, which is the largest in Canada and the fourth-biggest in North America. The remaining third comes from publishing newspapers and magazines. Transcontinental is also continuing to expand its online operations: it now has over 3,500 websites that attract 18.7 million unique visitors a month.

The company’s exposure to the highly cyclical advertising business adds to its risk. However, over half of its printing revenue comes from long-term contracts that range from three to 18 years.

For example, Transcontinental currently prints a wide variety of magazines and advertising materials for Rogers Communications Inc. (Toronto symbol RCI.B). Rogers recently agreed to extend this contract to 2019. That will add a total of $250 million to Transcontinental’s revenue.

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THOMSON REUTERS CORP. $28 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 825.9 million; Market cap: $23.1 billion; Price-to-sales ratio: 1.6; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.thomsonreuters.com) gets 56% of its revenue and 45% 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.

Slow economic growth and tighter regulations are prompting banks and brokerage firms to cut their spending on information products. Thomson Reuters is also spending more to improve the performance of, and add new features to, its Eikon desktop computer terminals, which deliver news and financial data to traders and portfolio managers.

As a result, the company’s earnings fell 1.8% in the three months ended September 30, 2012, to $445 million from $453 million a year earlier (all amounts except share price and market cap in U.S. dollars). Due to fewer shares outstanding, earnings per share were unchanged at $0.54.

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p>RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 298.6 million; Market cap: $8.1 billion; Price-to-sales ratio: 5.0; Dividend yield: 5.1%; TSINetwork Rating: Average; www.riocan.com) has completed its deal to buy full control of 21 shopping malls in the U.S. from Cedar Shopping Centers, Inc. (New York symbol CDR).Previously, RioCan had an 80% stake in these malls through a joint venture with Cedar. It now owns 49 malls in the U.S., and 289 in Canada. RioCan paid $39.0 million U.S. for these properties. To put that price in context, it earned $125 million (Canadian) in the three months ended September 30, 2012. That’s down 25.6% from $168 million a year earlier. Earnings per unit fell 33.3%, to $0.42 from $0.63, on more units outstanding.

However, the best way to assess a real estate investment trust’s operating performance is to look at its cash flow. That’s because it excludes nonrecurring items, like gains on the sale of real estate. RioCan’s cash flow rose 18.6% in the quarter, to a record $115 million from $97 million. Cash flow per unit rose 8.1%, to $0.40 from $0.37.

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ENCANA CORP. $22 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $16.2 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.6%; TSINetwork Rating: Average; www.encana.com) is one of North America’s largest natural gas producers. The U.S. accounts for 55% of Encana’s production, while Canada supplies the remaining 45%. The company’s proven reserves should last over 14 years. If you include properties where estimates are less well defined, Encana’s reserves could last 50 years.

On December 1, 2009, the old EnCana Corp. split itself into two new companies: the new Encana and Cenovus Energy Toronto symbol CVE), which specializes in oil sands projects, oil refineries and conventional natural gas. The new Encana’s revenue fell 4.5%, from $8.9 billion in 2010 to $8.5 billion in 2011 (all amounts except share price and market cap in U.S. dollars). New techniques, such as horizontal drilling, have unlocked large amounts of shale gas. This has increased inventories and cut gas prices: the company sold its gas for $4.96 per thousand cubic feet in 2011, down 9.5% from $5.48 in 2010.

Earnings fell 33.3%, to $0.54 a share (or a total of $398 million) from $0.81 (or $598 million). Cash flow per share fell 5.4%, to $5.66 from $5.98.

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Pat McKeough responds to many personal questions about specific stocks and other investment topics 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 the Inner Circle. This week, we received a question from an Inner Circle member on an Italian eyewear company whose products range from popular brands like LensCrafters to luxury names like Prada. The company, which trades as an ADR, makes the majority of its sales in North America, and Pat looks at its prospects for growth in an uncertain global economy....

CHEMTRADE LOGISTICS INCOME FUND (Toronto symbol CHE.UN; www.chemtradelogistics.com) 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....

Pat McKeough responds to many personal questions about specific stocks and other investment topics 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 the Inner Circle. This week, an Inner Circle member asked about the world’s biggest generic drug maker. This Israeli-based firm, which trades as an ADR, has grown steadily by acquisition. Pat examines the prospects for growth as an aging population demands more drugs, but he also looks at the challenges of increased competition and government regulation....

BAXTER INTERNATIONAL INC. $66 (New York symbol BAX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 549.4 million; Market cap: $36.3 billion; Price-to-sales ratio: 2.6; Dividend yield: 2.7%; TSINetwork Rating: Average; www.baxter.com) makes medical products, such as intravenous pumps and kidney dialysis equipment. It also makes vaccines and drugs. Half of its sales come from single-use products that need to be continually reordered.

Demand for the company’s products continues to improve, particularly as an aging population needs more medical devices and drugs. Baxter’s sales rose 23.4%, from $11.3 billion in 2007 to $13.9 billion in 2011.

Earnings rose 36.1%, from $1.8 billion in 2007 to $2.5 billion in 2011. The company is an aggressive buyer of its own shares. Because of a 10% drop in the number of shares outstanding, earnings per share jumped 54.5%, from $2.79 to $4.31.

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SONY CORP. ADRs $10 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $10.0 billion; Price-to-sales ratio: 0.1; Dividend yield: 3.1%; TSINetwork Rating: Average; www.sony.com) has agreed to buy 11% of distressed Japanese camera maker Olympus for $640 million. In addition, the companies will work together on new medical-imaging equipment that includes Sony’s TV technologies. They will also share digital camera technology. Sony feels this investment will help cut its reliance on its struggling TV set business.

To pay for this purchase, Sony is selling $1.9 billion of convertible bonds due in 2017. That will increase its long-term debt to $13.1 billion, or a high 1.3 times its market cap. As well, if all bondholders convert, the number of shares outstanding would rise by 15.6%. That would dilute the holdings of current shareholders.

Sony is still a hold.

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TEXAS INSTRUMENTS INC. $29 (Nasdaq symbol TXN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $31.9 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.9%; TSINetwork Rating: Average; www.ti.com) is selling fewer chips to smartphone makers. That’s because these customers are making more of their own chips instead of buying them from outside suppliers.

In response, Texas Instruments is shifting its focus to chips for cars, industrial machinery and other products. As a result, it will cut 5% of its workforce. The company will pay $325 million in severance and other costs. However, these moves should save it $450 million a year by the end of 2013. That’s equal to 57% of the $784 million, or $0.67 a share, that the company earned in the third quarter of 2012.

Texas Instruments is a buy.

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PETSMART INC. $69 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 108.2 million; Market cap: $7.5 billion; Price-to-sales ratio: 1.2; 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 the third quarter of its 2013 fiscal year, which ended October 28, 2012, PetSmart’s earnings jumped 46.6%, to $82.3 million from $56.2 million a year earlier. The company bought back $60 million of its shares during the quarter. Due to fewer shares outstanding, earnings per share rose 50.0%, to $0.75 from $0.50.

Sales rose 8.8%, to $1.6 billion from $1.5 billion. Same-store sales rose 6.5%, while sales of pet services, such as grooming, rose 8.5%. Services accounted for 10.7% of PetSmart’s total sales.

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ALCOA INC. $8.27 (New York symbol AA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.1 billion; Market cap: $9.1 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.5%; TSINetwork Rating: Average; www.alcoa.com) has completed the sale of its Tapoco hydroelectric dams in Tennessee and North Carolina. These facilities supply power to Alcoa’s nearby aluminum smelter. The company recently shut down parts of the smelter, so it no longer needs this power.

Alcoa received $600 million, or 7% of its market cap, for the Tapoco assets. The company did not say what it would do with the cash, but it could use it to pay down its long-term debt of $8.4 billion.

Alcoa is a buy.

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NCR CORP. $24 (New York symbol NCR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 159.9 million; Market cap: $3.8 billion; Price-to-sales ratio: 0.6; No dividends paid; TSINetwork Rating: Average; www.ncr.com) has won a contract to install 10,000 of its self-checkout systems at more than 1,200 Wal-Mart stores in the U.S. These devices let shoppers pay for their purchases without a cashier. That cuts the retailer’s labour costs, speeds up checkout times and encourages repeat visits.

The company did not say how much this contract is worth. However, Wal-Mart’s purchase should make it easier for NCR to sell its systems to other big retailers.

NCR is a buy.

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ALLIANT ENERGY CORP. $44 (New York symbol LNT; Income Portfolio, Utilities sector; Shares outstanding: 111.0 million; Market cap: $4.9 billion; Price-to-sales ratio: 1.5; Dividend yield: 4.1%; TSINetwork Rating: Average; www.alliantenergy.com) sells electricity and natural gas to 1.4 million residential and business customers in Wisconsin, Iowa and Minnesota.

The company recently agreed to buy a gas-fired power plant in Wisconsin for $392 million. Alliant currently buys power from this plant under a long-term contract. Owning this plant will make it easier for Alliant to lower its operating costs. The deal should close by the end of 2012.

Meanwhile, Alliant earned $149.0 million, or $1.34 a share, in the third quarter of 2012. That’s up 7.2% from $139.0 million, or $1.25 a share, a year earlier. Revenue rose 1.9%, to $887.6 million from $870.9 million. That’s mainly because warmer-than-usual summer weather prompted consumers to use more power for air conditioning.

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AMEREN CORP. $29 (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 242.6 million; Market cap: $7.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 5.5%; TSINetwork Rating: Average; www.ameren.com) sells power and natural gas to 3.3 million clients in Illinois and Missouri.

In the three months ended September 30, 2012, Ameren’s earnings fell 15.2%, to $323 million, or $1.33 a share. A year earlier, it earned $381 million, or $1.57 a share. These figures exclude unusual items, such as a writedown of a coal-fired power plant.

Revenue fell 11.8%, to $2.0 billion from $2.3 billion. Electricity sales (which accounted for 94% of Ameren’s revenue) fell 12.5% as the weak economy hurt power demand and prices at its non-regulated plants. Gas sales (6% of revenue) were flat.

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HEWLETT-PACKARD CO. $12 (New York symbol HPQ; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 2.0 billion; Market cap: $24.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 4.4%; TSINetwork Rating: Above Average; www.hp.com) paid $11.1 billion in August 2011 for U.K.-based Autonomy Corp., which makes software that helps businesses organize information in a variety of formats, including email, web pages and documents.

The company now claims that improper accounting policies made Autonomy look more profitable that it really was. As a result, it wrote down the value of this purchase by $8.8 billion. Hewlett will try to recover some of these losses through lawsuits.

However, that could take years. As well, sales of the company’s computers and printers continue to decline as consumers shift to tablet computers.

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EBAY INC. $49 (Nasdaq symbol EBAY; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $63.7 billion; Price-to-sales ratio: 4.6; No dividends paid; TSINetwork Rating: Above Average; www.ebay.com) aims to profit from rising demand for online shopping in China through a new alliance with Xiu.com, a leading Chinese seller of luxury goods.

Under the deal, the partners will launch a new website, ebay.xiu.com, which will let certain U.S. retailers sell their goods at fixed prices. The sellers will then send the orders they receive from the site to eBay’s Dallas warehouse, which will forward the goods to China. Xiu.com will handle local shipping and customer service.

eBay is a buy.

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FORD MOTOR CO. $11 (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.7 billion; Market cap: $40.7 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.8%; TSINetwork Rating: Extra Risk; www.ford.com) is the secondlargest carmaker in the U.S. behind General Motors. In the latest quarter, Ford accounted for14.8% of the U.S. market, down from 16.3% a year earlier.

The company continues to see strong sales and earnings in North America (50% of sales) and Asia (19%). That’s offsetting weaker results in Europe (23%) and South America (8%).

In the three months ended September 30, 2012, Ford’s earnings rose 15.6%, to $1.6 billion from $1.4 billion a year earlier. Earnings per share rose 17.6%, to $0.40 from $0.34, on fewer shares outstanding.

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HONDA MOTOR CO. LTD. ADRs $33 (New York symbol HMC; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.8 billion; Market cap: $59.4 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.honda.com) is Japan’s secondlargest carmaker and the world’s biggest motorcycle manufacturer.

Like Toyota (see left), Honda’s sales are continuing to recover from the 2011 earthquake and tsunami. In its fiscal 2013 second quarter, which ended September 30, 2012, Honda sold 996,000 cars and trucks. That’s up 46.9% from 678,000 a year earlier. Motorcycle sales increased 1.8%, to 3.9 million from 3.8 million.

As a result, the company’s overall sales rose 19.0%, to $29.3 billion from $24.6 billion a year earlier. Earnings jumped 35.4%, to $1.1 billion, or $0.59 per ADR (each American Depositary Receipt represents one Honda common share). A year earlier, Honda earned $788 million, or $0.44 per ADR.

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