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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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TOYOTA MOTOR CO. ADRs $84 (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.7 billion; Market cap: $142.8 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.toyota.com) is the world’s largest carmaker based on sales. Japan is the company’s largest market, accounting for 28% of its revenue, followed by North America (26%), Asia (19%), Europe (9%) and the rest of the world (18%).

Toyota continues to recover from the March 2011 earthquake and tsunami, which cut its production in Japan. In its fiscal 2013 second quarter, which ended September 30, 2012, Toyota sold 2.25 million vehicles, up 24.5% from 1.8 million a year earlier.

The higher car sales pushed up Toyota’s revenue by 32.7%, to $55.2 billion from $41.6 billion a year earlier. Earnings soared 255.7%, to $2.6 billion, or $1.66 per ADR (Each American Depositary Receipt represents two Toyota common shares). A year earlier, it earned $730.9 million, or $0.47 per ADR.

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DUN & BRADSTREET CORP. $76 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 44.6 million; Market cap: $3.4 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.0%; TSINetwork Rating: Average; www.dnb.com) shot up to around $84 in August 2012 on speculation that the company may sell itself. However, reports that it has stopped looking for a buyer caused the stock to fall to its current price.

Meanwhile, the slow economy is hurting demand for Dun & Bradstreet’s credit reports. In the third quarter of 2012, its revenue fell 6.0%, to $413.2 million from $439.4 million a year earlier. However, savings from a cost-cutting plan pushed up its earnings by 13.4%, to $79.4 million from $70.0 million. Due to fewer shares outstanding, earnings per share rose 23.9%, to $1.76 from $1.42.

Dun & Bradstreet is still a hold.

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D.E. MASTER BLENDERS 1753 N.V. 8.88 euros (Amsterdam Exchange symbol DE; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 594.9 million; Market cap: 5.3 billion euros (1 euro = $1.28 Canadian); Price-to-sales ratio:1.9; No dividends paid; TSINetwork Rating: Average; www.demasterblenders1753.com) makes coffee and tea under a variety of brands, including Senseo, Pickwick and Douwe Egberts.

In its fiscal 2013 first quarter, which ended September 30, 2012, D.E. Master’s sales rose 1.1%, to 626 million euros from 619 million euros a year earlier. D.E. Master raised its prices to offset rising costs for coffee beans. That offset a 2.7% decline in sales volumes. The company did not report earnings.

D.E. Master recently began a restructuring that includes closing a plant in Denmark and outsourcing its accounting and other administrative functions. This should cut 55 million to 75 million euros from its annual costs by 2015.

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HILLSHIRE BRANDS CO. $27 (New York symbol HSH; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 122.3 million; Market cap: $3.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.9%; 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. Its other foods include Sara Lee frozen desserts and Chef Pierre pies.

If you disregard costs related to the breakup and other unusual items, Hillshire would have earned $62 million in its fiscal 2013 first quarter, which ended September 29, 2012. That’s up 65.9% from $38 million a year earlier. Earnings per share rose 59.4%, to $0.51 from $0.32, on more shares outstanding. Sales rose 2.0%, to $1.0 billion from $991 million.

The higher earnings are partly due to savings from plant closures and job cuts. These moves should lower its annual costs by $100 million by the end of fiscal 2015.

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NVIDIA CORP. $12 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 624.9 million; Market cap: $7.5 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.5%; TSINetwork Rating: Average; www.nvidia .com) is down 20% in the past year. That’s mainly because slowing sales of traditional computers are hurting demand for its graphic chips, which make computer video run more smoothly and appear more lifelike.

Nvidia continues to invest a high 24% of its revenue in research. That’s helping it expand into new areas, particularly chips for mobile devices. Its new Tegra chips now power Google and Microsoft’s new tablet computers.

As the world’s leading make of video chips, Nvidia will also benefit from several long-term trends. These include new video games with faster, more realistic characters and action. Device makers are also upgrading their smartphones and tablets with higher quality displays.

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MONDELEZ INTERNATIONAL INC. $25 (Nasdaq symbol MDLZ; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.8 billion; Market cap: $45.0 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.mondelezinternational.com) is one the world’s largest snack food makers. The company’s name means “delicious world” in Latin.

Mondelez 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 markets outside North America. Cookies and biscuits account for 30% of Mondelez’s sales, followed by chocolate (27%), beverages (17%), gum and candy (16%) and grocery products (10%). It gets 44% of its sales from developing markets, 37% from Europe and 19% from North America.

Mondelez is now restructuring its operations, including shutting down less-profitable plants and sales offices. Severance and other costs will total $925 million. The company also expects to pay $150 million in expenses related to the breakup from Kraft.

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CAE INC. (Toronto symbol CAE; www.cae.com) is the world’s leading maker of flight simulators for commercial airlines, with 70% of the market. It also makes simulators for military clients. The company began training pilots for its customers in 2001; it now has over 100 flight schools in 30 countries. CAE gets 50% of its revenue from military clients. That cuts its exposure to cyclical commercial airlines, which supply 45% of its revenue....

Even when stock markets are in an upward trend, they are still subject to sharp setbacks, such as the one triggered by the re-election of Barack Obama as president last week. Many investors seek to protect their profits against such reverses though the use of stop-loss orders. Before you try this approach, you should keep in mind that stop-loss orders have a number of risks that can cost you money. Here’s a look at this investing strategy, and some of the dangers you may be exposed to with stop-loss orders....

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, one question from an Inner Circle member concerned a fund that holds gold stocks. The fund’s high distributions give it a substantial dividend yield. Pat examines whether it can sustain its yield and also looks at its policy of using call options to boost returns....

TEMPUR-PEDIC $24.77 (New York symbol TPX; TSINetwork Rating: Speculative) (800-878-8889; www.tempurpedic.com; Shares outstanding: 59.6 million; Market cap: $1.5 billion; No dividends paid) makes and distributes Swedish mattresses and neck pillows made from its proprietary Tempur material, which conforms to the body to provide support and help alleviate pressure points.

Tempur-Pedic’s shares are down 69.7% since they hit an all-time high of $87.43 in April 2012. Competitors have introduced many new products and supported them with aggressive promotions. That has steadily pushed down Tempur-Pedic’s results.

In the three months ended September 30, 2012, revenue fell 9.2%, to $347.9 million from $383.1 million a year earlier. Excluding one-time items, earnings per share fell 22.2%, to $0.70 from $0.90.

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INTUITIVE SURGICAL $526.46 (Nasdaq symbol ISRG; TSINetwork Rating: Average) (515-507-5000; www.intuitivesurgical.com; Shares outstanding: 39.8 million; Market cap: $21.0 billion; No dividends paid) makes the da Vinci, a computerized surgical system.

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.

In the three months ended September 30, 2012, Intuitive earned $183.3 million, or $4.59 a share. That’s up sharply from $122.4 million, or $3.13 a share, a year earlier. Revenue rose 20.4%, to $537.8 million from $446.7 million. Intuitive is debt-free, and holds cash of $2.7 billion, or $67.67 a share.

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FORTRESS PAPER $7.00 (Toronto symbol FTP; TSINetwork Rating: Extra Risk) (1-888- 820-3888; www.fortresspaper.com; Shares outstanding: 14.5 million; Market cap: $101.5 million; No dividends paid) lost $18.1 million, or $1.26 a share, in the three months ended September 30, 2012. A year earlier, it lost $7.7 million, or $0.54. Cash flow was negative $9.5 million, or $0.66 a share, in the latest quarter, compared to negative $3.7 million, or $0.26 a share.

The company’s Dresden wallpaperproducts plant is profitable, but the Landqart security-paper operation is losing money because of the high Swiss franc. Increased competition is also making it difficult for Fortress to attract customers. As well, the Thurso dissolving pulp plant is having startup problems, and rising global production has pushed down selling prices sharply.

Fortress holds cash of $83.8 million or $5.88 a share, but its long-term debt of $245 million is a very high 241% of its $101.5- million market cap. That’s a big risk factor, especially in a company that’s reporting negative cash flow.

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TIM HORTONS $45.75 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 154.4 million; Market cap: $7.1 billion; Dividend yield: 1.8%) operates 3,365 coffee and donut stores in Canada and 755 in the U.S. It also has 16 outlets in the Persian Gulf.

New menu items, such as lattes and panini sandwiches, are selling well. In addition, the company now offers free Wi-Fi Internet at its Canadian outlets. That’s helping it compete with fast-food chains like McDonald’s, which is aggressively expanding its coffee sales in Canada. Sales of Tim Hortons singleserve cups for Tassimo coffee machines are also rising.

These factors pushed up Tim Hortons sales by 10.3% in the three months ended September 30, 2012, to $802.0 million from $726.9 million a year earlier. Same-store sales rose 2.3% at its U.S. outlets and 1.9% in Canada. Earnings per share rose 4.6%, to $0.68 from $0.65.
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SYMANTEC CORP. $17.53 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 693.9 million; Market cap: $12.2 billion; No dividends paid) sells computer-security technology, including anti-virus and email-filtering software, to businesses and consumers.

In the company’s 2013 second quarter, which ended September 28, 2012, its earnings per share rose 15.4%, to $0.45 from $0.39. Revenue rose 1.1%, to $1.70 billion from $1.68 billion.

Symantec is selling more of its products to businesses, partly because it is now offering its salespeople higher incentives for bringing in new contracts than for renewals.
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ATLANTIC TELE-NETWORK $36.75 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 15.6 million; Market cap: $573.3 million; Yield: 2.7%) reported strong earnings in the latest quarter, even though revenue declined.

In the three months ended September 30, 2012, Atlantic’s revenue fell 2.9%, to $188.8 million from $194.3 million a year earlier. However, earnings jumped 40.8%, to $16.0 million, or $1.03 a share, from $11.3 million, or $0.74 a share.

The company stands to make further gains as it sells more smartphones, which generate higher fees than regular cellphones. As well, it is upgrading its wireless networks to 4G long-term evolution (LTE) standards. LTE is up to five times faster than current networks, and should help it attract new subscribers.
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AIMIA INC. $14.80 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 172.3 million; Market cap: $2.6 billion; Dividend yield: 4.3%) has agreed to raise its stake in Club Premier Loyalty & Marketing, the loyalty program of Grupo Aeromexico, Mexico’s biggest airline. This move is part of Aimia’s plan to diversify its operations geographically.

Aimia will pay $88 million U.S. to increase its interest to 49% from 29%. Grupo Aeromexico will continue to own 51%.

Club Premier is Mexico’s leading loyalty program, with more than 2.8 million members and 50 partners. Club Premier members can earn and redeem points on Aeromexico, which offers 550 daily flights throughout the Americas and to Europe and Asia. As well, members can earn points on 14 other airlines, including Delta and Air France-KLM.

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ALARMFORCE INDUSTRIES $11.23 (Toronto symbol AF TSINetwork Rating: Speculative) (1-800- 267-2001; www.alarmforce.com; Shares outstanding: 12.2 million; Market cap: $137.0 million; Dividend yield: 0.9%) sells twoway voice alarm systems and monitoring services in Canada and increasingly in the U.S. It’s also adding to its prospects with its VideoRelay system, which it launched in October 2011.

In the three months ended July 31, 2012, Alarm- Force’s sales rose 10.9%, to $11.4 million from $10.3 million a year earlier. Even so, AlarmForce lost $6,589, or nil per share, compared to a profit of $831,342, or $0.07.

AlarmForce’s earnings fell because it increased its advertising spending as it expanded into Florida. It also invested more in its VideoRelay system, which lets subscribers watch their homes through their computers and smartphones. Users can either view live video or receive alerts when the system detects motion. VideoRelay also lets you establish two-way voice communication through the camera.

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