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Gold prices have moved down from their peak of $1,918 an ounce in August 2011 to the current price of $1,571. Gold could well regain its highs and move up even further over the longer term, although it will likely remain volatile. Higher prices would arise from investor fears that inflation or global political and economic instability will weaken key currencies, such as the euro or the U.S. dollar. If you do hold gold stocks, we recommend that you keep them to a reasonable part of the resources component of a well-balanced portfolio. YAMANA GOLD (Toronto symbol YRI; www.yamana.com) owns seven operating gold mines in Mexico, Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina, and has three other properties in advanced stages of development....

This is the latest in a series of video interviews in which Pat McKeough gives his advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies and in still others he serves as an investment counsellor as he discusses events that are affecting the markets and the economy. That’s his role this week as he discusses the anxiety many have about the ongoing crisis in Greece. Pat turns the general sense of pessimism on its head—the markets frequently move up before crises are solved, while there’s often more cause to worry when things look good. And he adds an optimistic postscript about energy in the years ahead.
The Crisis in Greece: Be Ready for an Upturn...

CANADA BREAD CO. LTD. $48 (www.canadabread.ca) is seeing lower demand for its fresh baked goods. At the same time, its costs for wheat and other ingredients are rising. As a result, its earnings fell 62.5% in the first quarter of 2012, to $0.21 a share from $0.56 a year earlier....

CAE INC. $9.88 (www.cae.com) has won several contracts from military clients for flight simulators and other training equipment. In all, these deals are worth $110 million, which is equal to 6% of CAE’s annual revenue of $1.8 billion. Best Buy.

FINNING INTERNATIONAL INC. $23 (www.finning.com) earned $0.39 a share in the three months ended March 31, 2012. That’s down 7.1% from $0.42 a year earlier. If you exclude the costs of installing a new computer system that will make its Canadian operations more efficient, Finning would have earned $0.48 a share in the latest quarter....

EMERA INC. $33 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 123.5 million; Market cap: $4.1 billion; Price-to-sales ratio: 1.9; Dividend yield: 4.1%; TSINetwork Rating: Average; www.emera.com) gets 75% of its revenue and 65% of its earnings from Nova Scotia Power Inc., which is that province’s main electricity supplier. Emera also continues to expand outside Nova Scotia.

The company owns the Brunswick Pipeline, which pumps natural gas from the U.S. to a liquefied natural gas plant in Saint John, New Brunswick. It has also acquired electrical utilities in the U.S. and the Caribbean.

Revenue and earnings have soared

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BCE INC. $42 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 773.6 million; Market cap: $32.5 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.2%; TSINetwork Rating: Above Average; www.bce.ca) is joining a consortium of investors, including the Ontario Teachers’ Pension Plan, to buy privately held Q9 Networks Inc., which provides data-storage and web-hosting services to businesses across Canada. Q9 has 11 data centres in Ontario, Alberta and B.C.

This investment will help BCE take advantage of growing demand from business clients for reliable cloud-computing services. BCE already operates six data centres. It will open a seventh later this year.

BCE will pay $180 million for a 30% stake in Q9 when the deal closes, probably by the end of 2012. The purchase price is equal to 31% of the $580 million, or $0.75 a share, that BCE earned in the three months ended March 31, 2012.

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TELUS CORP. (Toronto symbols T $59 and T.A $58; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 325.0 million; Market cap: $19.2 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.telus.com) has won a contract to help more pharmacies in Newfoundland connect to an electronic drug database....

AGRIUM INC. $84 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 158.0 million; Market cap: $13.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.2%; TSINetwork Rating: Average; www.agrium.com) has raised its semi-annual dividend by 122.2%, to $0.50 a share (all amounts except share price and market cap in U.S. dollars) from $0.225. The new annual rate of $1.00 yields 1.2%.

Meanwhile, some farmers have objected to the company’s $1.65-billion purchase of 232 of Viterra Inc.’s (Toronto symbol VT) 258 retail stores in western Canada, which sell seed, fertilizer and other agricultural products. However, Agrium’s competitors would still control twothirds of this market.

The deal also includes Viterra’s 17 stores in Australia, plus its 34% stake in a fertilizer plant. The deal should close in the next few weeks.

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CANADIAN IMPERIAL BANK OF COMMERCE $71 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 404.9 million; Market cap: $28.7 billion; Price-to-sales ratio: 1.8; Dividend yield: 5.1%; TSINetwork Rating: Above Average; www.cibc.com) continues to profit by focusing on retail banking, which accounts for 76% of its business. That cuts its reliance on its more-volatile corporate-lending and securities-trading divisions.

In its fiscal 2012 second quarter, which ended April 30, 2012, the bank earned $766 million, or $1.90 a share. That’s up 6.1% from $722 million, or $1.80 a share, a year earlier. Without unusual items, such as losses on securities that CIBC holds, earnings per share would have risen 9.3%, to $2.00 from $1.83. Revenue rose 2.3%, to $3.1 billion from $3.0 billion.

CIBC is a buy.

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MOLSON COORS CANADA INC. (Toronto symbols TPX.A $40 and TPX.B $40; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 181.1 million; Market cap: $7.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.3%; TSINetwork Rating: Average; www.molsoncoors.com) hopes to spur sales this summer with Coors Light Iced T, a new beer mixed with tea and lemon.

Innovative products like this should help the company compete with makers of flavoured vodka and wine drinks. Molson also aims to attract more consumers who don’t typically drink beer, particularly women.

Molson Coors is a buy. The class B shares are the better choice.

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IGM FINANCIAL INC. $39 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 257.5 million; Market cap: $10.0 billion; Price-to-sales ratio: 3.7; Dividend yield: 5.5%; TSINetwork Rating: Above Average; www.igmfinancial.com) is Canada’s largest independent mutual fund company, with $117.0 billion of assets under management.

Falling stock markets continue to hurt mutual fund sales. As a result, IGM’s earnings fell 5.5%, to $199.7 million, in the three months ended March 31, 2012. A year earlier, it earned $211.2 million. Earnings per share fell 3.7%, to $0.78 from $0.81, on fewer shares outstanding. Revenue declined 5.4%, to $673.1 million from $711.4 million.

To help spur sales and compete with other fund companies, IGM is cutting the management fees on most of the mutual funds it sells through its Investors Group subsidiary. It is also changing the way it pays its salespeople, which will result in savings that will help offset the lower fee income.

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GREAT-WEST LIFECO INC. $21 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 949.8 million; Market cap: $19.9 billion; Price-to-sales ratio: 0.7; Dividend Yield: 5.9%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s largest insurance company, with $523.0 billion of assets under administration. It also sells mutual funds, as well as retirement-planning and wealthmanagement services. Canada accounts for 53% of the company’s earnings, followed by Europe (31%) and the U.S. (16%).

In the three months ended March 31, 2012, Great-West’s earnings rose 8.7%, to $451 million, or $0.48 a share. A year earlier, it earned $415 million, or $0.44 a share. Revenue rose 3.9%, to $6.5 billion from $6.3 billion.

The gains mainly came from its European division, which earned $141 million, up 64.0% from $86 million a year earlier. That’s because it set aside $75 million in the year-earlier quarter to cover claims related to the earthquakes in Japan and New Zealand. Earnings fell 1.2% in Canada and 14.8% in the U.S.

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ANDREW PELLER LTD. $9.93 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $148.0 million; Price-to-sales ratio: 0.5; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest wine producer, after Vincor Canada. Peller operates wineries in B.C., Ontario and Nova Scotia. It also imports wines and sells home-winemaking kits.

In its 2012 fiscal year, which ended March 31, 2012, Peller’s sales rose 4.3%, to $276.9 million from $265.4 million in fiscal 2011.

That’s because the company continues to launch new wines, particularly higher-priced premium wines. Its sales also benefited from a new joint venture with Wayne Gretzky Estate Winery and a recently purchased home-winemaking business.

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CENOVUS ENERGY INC. $32 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $24.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.8%; TSINetwork Rating: Extra Risk; www.cenovus.com) has received regulatory approval to develop its Narrows Lake oil sands project in northern Alberta; U.S.-based ConocoPhillips (New York symbol COP) owns 50% of this property.

Narrows Lake could begin operating in 2017. When it reaches full capacity, it should produce 130,000 barrels per day (Cenovus’s share is 65,000 barrels). To put that in context, Cenovus produced an average of 156,850 barrels per day in the first quarter of 2012. Narrows Lake’s reserves should last 40 years.

The company plans to use a new technique, called a solventaided process, to extract the oil from Narrows Lake. This approach will add to the project’s construction and development costs, but it should let the partners recover up to 15% more oil than current methods.

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BANK OF NOVA SCOTIA $52 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $57.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.scotiabank.com) has agreed to sell Scotia Plaza, its 68-storey office building in downtown Toronto.

Under the terms of the deal, Dundee REIT (Toronto symbol D.UN) and H&R REIT (Toronto symbol HR.UN) will pay Scotia $1.3 billion for the building when the sale closes, probably by June 30, 2012. Dundee will own two-thirds of the property, and H&R will own the remaining third. The bank will remain as the anchor tenant.

Meanwhile, Bank of Nova Scotia earned $1.5 billion in the three months ended April 30, 2012. That’s up 16.1% from $1.3 billion a year earlier. Earnings per share rose 8.5%, to $1.15 from $1.06, on more shares outstanding. Revenue rose 1.4%, to $4.7 billion from $4.6 billion. Strong gains at its international operations offset slower growth at its Canadian retail banking division.

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LINAMAR CORP. $21 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.7 million; Market cap: $1.4 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.5%; TSINetwork Rating: Extra Risk; www.linamar.com) gets 85% of its revenue by making engines, transmissions and other precisionmachined parts for automakers. The company has plants in North America, Europe and Asia.

The remaining 15% of Linamar’s revenue comes from its self-propelled, scissor-type elevating work platforms, which it makes under the Skyjack name, plus consumer products, such as lawn mowers and cargo trailers.

Thanks to rising new car sales, Linamar’s earnings jumped 55.3%, to $0.59 a share, in the three months ended March 31, 2012. This figure excludes a foreign-exchange gain. A year earlier, Linamar earned $0.38 a share.

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SHAWCOR LTD. $33 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.7 million; Market cap: $2.3 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.2%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting (88% of revenue). It also manufactures electrical wire and protective sheaths (12% of revenue).

So far this year, ShawCor has won over $45 million U.S. of coating orders related to big offshore natural gas projects near Australia. In addition, it has received a $30-million U.S. contract to coat undersea pipelines for a gas platform off the coast of Indonesia.

Meanwhile, ShawCor’s revenue rose 11.7% in the three months ended March 31, 2012, to $312.3 million from $279.5 million a year earlier. The company is benefiting as pipeline operators expand their operations to handle higher oil and gas production in North America and Latin America.

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SNC-LAVALIN GROUP INC. $39 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 161.1 million; Market cap: $6.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.snclavalin.com) is a leading Canadian engineering and construction company. It specializes in large-scale public works projects, such as roads, bridges, transit systems and water-treatment plants.

SNC’s shares fell from around $48 in February 2012 after the company discovered $35 million of unusual payments related to certain construction contracts.

A panel of independent directors and lawyers later found another unusual payment, bringing the total to around $56 million. The company didn’t say which projects are connected to these transactions.

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CANADIAN PACIFIC RAILWAY LTD. $73 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 170.9 million; Market cap: $12.5 billion; Price-to-sales ratio: 2.4; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.cpr.ca) has attracted a lot of media attention lately. That’s mainly due to efforts by a U.S.-based investment firm that wants to improve its performance and possibly spark a takeover offer.

In our three-part Successful Investor portfolio strategy, we advise investors to invest mainly in well-established companies, spread your money out across the five main economic sectors, and downplay stocks that are in the broker/media limelight, which can bloat investor expectations.

Downturns can be brutal when stocks fail to live up to those inflated expectations. So, investors have asked why we chose a #1 stock that’s in what they see as ‘the limelight’. The difference is in the definition.

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CANADIAN NATIONAL RAILWAY CO. $84 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 438.7 million; Market cap: $36.9 billion; Price-to-sales ratio: 4.1; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.cn.ca) operates the largest freight-rail network in Canada, with access to major ports such as Vancouver, Montreal and Halifax. It also serves 16 U.S. states, including ports in New Orleans and Mobile, Alabama.

Ottawa nationalized CN in 1922 because of the vital role the company played in Canada’s early growth. CN became a publicly traded company in 1995.

CN hauls consumer and industrial goods (22% of 2011 revenue), grain and fertilizers (19%), petroleum products (17%), forest products (16%), metals and minerals (12%), coal (8%) and automotive products (6%).

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Pat McKeough responds to many personal questions on 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. Inner Circle members often ask us about dividend stocks In this case, Pat responds to a question about a U.S. company that provides business outsourcing services to a wide variety of clients and is counting on strategic acquisitions and an improving employment rate to keep its dividend rising. ...

This is the latest in a series of video interviews in which Pat McKeough will give his advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies and still others will be comments on events that are affecting the markets and the economy. This time, the topic is one that figures into the retirement planning of many Canadians. Is my home an investment? Make sure you’ve made careful and complete calculations before you come to that conclusion, advises Pat.
Planning for Retirement: Your House as an Investment...

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 advice on the fundamentals of successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “Those who wish to trade stocks online should be very wary of the promises offered by automated stock trading systems.”...

ANDREW PELLER LTD. (Toronto symbol ADW.A; www.andrewpeller.com) is Canada’s second-largest wine producer, after Vincor Canada. Peller operates wineries in B.C., Ontario and Nova Scotia. It also imports wines and sells home-winemaking kits. In its 2012 fiscal year, which ended March 31, 2012, Peller’s sales rose 4.3%, to $276.9 million from $265.4 million in fiscal 2011....