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BHP BILLITON LTD. ADRs $63 (New York symbol BHP; Conservative Growth Portfolio, Resources sector; ADRs outstanding: 2.7 billion; Market cap: $170.1 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.5%; TSINetwork Rating: Average; www.bhpbilliton.com) is the world’s largest mining company, with operations in Australia, South Africa, Chile and the U.K. It produces iron ore, coal, oil, natural gas, aluminum, manganese, diamonds and titanium.

In 2011, BHP expanded its oil and gas business with two major purchases: it paid $12.0 billion for Petrohawk Energy Corp., which produces oil and natural gas in Texas and Louisiana; and $4.75 billion for shale gas properties in Arkansas.

These acquisitions increased BHP’s oil and gas production by 58% in three months ended March 31, 2012, to 56.5 million barrels of oil equivalent (including gas) from a year earlier.

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PETSMART INC. $63 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 108.4 million; Market cap: $6.8 billion; Price-to-sales ratio: 1.0; Dividend yield: 0.9%; TSINetwork Rating: Above Average; www.petsmart.com) recently hit a new all-time high after it reported strong earnings and sales for its latest quarter. The stock is now up 96.9% since we first recommended it at $32 in our October 2007 issue.

The company is the biggest petsupply chain in the U.S. In all, it operates 1,241 pet stores in the U.S. and Canada. It also has 194 in-store PetsHotels, which look after pets while their owners are away.

In the first quarter of PetSmart’s 2013 fiscal year, which ended April 29, 2012, its earnings rose 33.5%, to $94.7 million from $70.9 million a year earlier. The company spent $175 million buying back its shares during the quarter. Due to fewer shares outstanding, earnings per share rose 39.3%, to $0.85 from $0.61.

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NEWELL RUBBERMAID INC. $18 (New York symbol NWL; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 289.9 million; Market cap: $5.2 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.2%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, window blinds, pens and a number of other household items. Its top brands include Rubbermaid, Sharpie, Paper Mate, Parker, Graco, Irwin, Waterman and Levolor.

The company has three divisions: Newell Consumer (which supplies 50% of Newell’s sales and 45% of its earnings); Newell Professional (35%, 40%) and Baby and Parenting (15%, 15%). Wal-Mart accounted for 11.0% of Newell’s sales in 2011.

The company’s sales rose 1.0%, from $6.4 billion in 2007 to $6.5 billion in 2008, but the recession lowered its sales by 13.8%, to $5.6 billion, in 2009. Sales rebounded by 3.3%, to $5.8 billion, in 2010, and climbed to $5.9 billion in 2011.

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A bargain is generally regarded as a good thing. What could be a better bargain for investors than buying shares of a stock at lower prices? “Averaging down” is the well-known market tactic by which investors buy more shares of a stock that has come down in price....

The Canadian penny is on its way out, and cash transactions are increasingly rare as well. Although it may not be a household name, this maker of transaction-processing software is aggressively seeking an even greater share of the market in credit card, debit card and smartphone payments. ACI WORLDWIDE (Nasdaq symbol ACIW; www.tsainc.com) makes software that is used to process transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments....

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. This past week, one Inner Circle member asked about one of the dividend stocks in his portfolio. Pat replies with a look at whether this leader in diabetes products can sustain its growth with new products and expanded international markets. ...

This is the latest in a series of video interviews in which Pat McKeough will give his investment 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 week, the topic is the ongoing crisis in Europe, and the apparently unsolvable problems of Greece. Is it time to take some money out of the market? On the contrary, says Pat, investors who remain calm are looking at modest risk and a lot of upward potential.
Q: Pat, a socialist president was elected in France and Greece took another turn for the worse. Is it time to be taking some money out of the stock market?...

Dividends are in fashion with investors right now, and that’s always a good thing. Creative accounting can produce false impressions of prosperity and hide embarrassing financial problems. But accounting can’t create cash for this year’s dividend, let alone conjure up a history of past dividends. If you restrict your stock market picks to dividend payers, you’ll avoid most of the market’s greatest disasters. It’s odd that while investors periodically crave cash dividends, they rarely get excited about stock buybacks. But in some ways, stock buybacks are better than dividends. In particular, they give you a tax-deferral option that you don’t get with cash dividends....

AGRIUM INC. (Toronto symbol AGU; www.agrium.com) makes fertilizers from natural gas. It sells its products to farmers and industrial users through its more than 1,200 stores in North America, South America and Australia. The company’s retail outlets help shield it from volatile fertilizer prices. Agrium continues to add more stores. It recently agreed to pay $1.65 billion (all amounts except share price and market cap in U.S. dollars) for 230 fertilizer outlets in western Canada operated by Viterra Inc....

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. This past week, an Inner Circle member wondered about one of Canada’s most successful growth stocks. The shares for this athletic wear firm have done very well for this investor, but he asks Pat if he should be cautious about the high share price....

This is the latest in a series of video interviews in which Pat McKeough will give his investing 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 week, the topic is the decision of Internet phenomenon Facebook to start selling shares to the public. The intense media limelight surrounding this initial public offering is just one of the things that should make investors cautious, in Pat’s opinion.
Q: Pat, a lot of people are excited about the fact that Facebook is going to start selling its stock to the public. Do you think people should buy it?...

When the market is as turbulent as it has been lately, investors can easily panic and make mistakes. Our investment advice is to avoid three common mistakes we have seen over the years:

1. Overanalyzing: During this week’s market turmoil, the media has been focusing on the uncertainty in Europe. The election of a socialist president in France and electoral confusion in Greece is fuelling further fears about the ongoing European debt crisis....

The right number of stocks for you to own depends in part on where you are in your investing career. It makes sense that you should have fewer stocks

WYNDHAM WORLDWIDE $49.78 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 145.9 million; Market cap: $7.3 billion; Dividend yield: 1.8%) is one of the world’s largest hospitality companies, with 7,205 franchised hotels worldwide. Aside from Wyndham and Ramada, it owns a variety of other brands, including Days Inn, Super 8, Wingate, Baymont Inn & Suites, Microtel Inns & Suites, Hawthorn Suites, Howard Johnson, Travelodge and AmeriHost Inn.

In addition to hotels, Wyndham manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has 100,000 vacation rental properties worldwide. This wide range of operations gives it more consistent cash flow than most of its competitors, which mainly focus on hotels.

Vacation travel keeps rising

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ATLANTIC TELE-NETWORK $34.48 (Nasdaq symbol ATNI; TSINetwork Rating: Speculative) (340- 777-8000; www.atni.com; Shares outstanding: 15.5 million; Market cap: $534.4 million; Dividend yield: 2.7%) sells telecommunications services in rural areas and other underserved areas in the U.S., Bermuda and the Caribbean region.

In the three months ended March 31, 2012, Atlantic’s revenue fell 2.8%, to $182.9 million from $194.7 million a year earlier. However, earnings jumped 107.3%, to $9.3 million, or $0.60 a share, from $4.5 million, or $0.29 a share.

In April 2010, Atlantic bought over 800,000 wireless accounts from Verizon Wireless for $200 million. These subscribers were mostly in rural parts of Georgia, Illinois, Ohio, Idaho and the Carolinas.

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CHESAPEAKE ENERGY $14.04 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848-8000; www.chkenergy.com; Shares outstanding: 659.3 million; Market cap: $9.3 billion; Dividend yield: 2.5%) is down 60.7% from its high of $35.75 last August. That’s largely because natural gas prices have fallen to near 10-year lows.

However, the drop has accelerated lately, partly on news that the company’s cofounder, CEO and chairman, Aubrey K. McClendon, took out loans that may have put him in a conflict of interest. It has also come to light that he ran a hedge fund between 2004 and 2008 that traded in the same commodities that Chesapeake produces.

The U.S. Securities and Exchange Commission (SEC) is investigating.

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AASTRA TECHNOLOGIES $18.60 (Toronto symbol AAH; TSINetwork Rating: Speculative) (905- 760-4200; www.aastra.com; Shares outstanding: 11.9 million; Market cap: $221.3 million; Dividend yield: 4.3%) reported 9.5% lower sales in the three months ended March 31, 2012, to $147.3 million from $162.7 million a year earlier. Sales declined in all regions, including Western Europe, where Aastra gets the majority of its revenue. Even so, its earnings rose sharply, to $2 million, or $0.14 a share, from $184,000, or $0.01 a share.

Aastra needs a sustained economic recovery in Europe to raise its sales and further push up its earnings. Still, the stock trades at just 10.6 times the $1.76 a share that the company should earn in 2012. The shares yield 4.3%.

Aastra is a buy for aggressive investors.

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ENDEAVOUR SILVER $7.67 (Toronto symbol EDR; TSINetwork Rating: Speculative) (1-877-685-9775; www.edrsilver.com; Shares outstanding: 87.8 million; Market cap: $673. million; No dividends paid) operates the Guanacevi and Guanajuato silver/gold mines in Mexico.

Endeavour is now buying two more properties in Mexico, the El Cubo mine and the Guadalupe y Calvo exploration project, from AuRico Gold (symbol AUQ on Toronto). Endeavour will pay $100 million in cash and $100 million in stock.

Under the deal, AuRico is also entitled to an additional $50 million in cash payments if certain events occur during the first three years after the sale closes.

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INTUITIVE SURGICAL $537.18 (Nasdaq symbol ISRG; TSINetwork Rating: Average) (515-507-5000; www.intuitivesurgical.com; Shares outstanding: 39.7 million; Market cap: $21.3 billion; No dividends paid) earned $143.5 million, or $3.63 a share, in the three months ended March 31, 2012. That’s up sharply from $104.2 million, or $2.66 a share, a year earlier. Revenue rose 27.6%, to $495.2 million from $388.1 million.

Revenue from replenishable supplies rose 32.0%. Intuitive gets almost 40% of its revenue from steady sales of replacement parts, training and other services. That cuts its risk. The company is debt-free, and holds cash of $2.4 billion, or $60.61 a share.

Intuitive’s long-term outlook is positive. However, the stock has moved up 68% since August 2011. It now trades at 38.4 times the $14 a share that the company will likely earn in 2012.

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THE CHURCHILL CORP. $12.40 (Toronto symbol CUQ; TSINetwork Rating: Speculative) (780-454-3667; www.churchillcorporation.com; Shares outstanding: 24.3 million; Market cap: $301.3 million; Dividend yield: 3.9%) reports that its revenue rose 9.4% in the three months ended March 31, 2012, to $333.3 million from $304.7 million a year earlier. That’s because the industrial services company’s mining and oil sands clients increased their construction activity.

Even so, earnings fell 46.6%, to $3.1 million, or $0.13 a share, from $5.8 million, or $0.24 a share. That was mostly due to lowprofit- margin contracts that the company took on as part of its recent acquisitions, or when its markets were more competitive in late 2008, 2009 and early 2010. Most of these unfavourable deals should be completed by the end of this year.

Churchill is still a buy.

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DELPHI ENERGY $1.26 (Toronto symbol DEE; TSINetwork Rating: Speculative) (403-265-6171; www.delphienergy.ca; Shares outstanding: 131.0 million; Market cap: $165.1 million; No dividends paid) explores for oil and natural gas in Alberta and B.C. Gas makes up 73% of Delphi’s daily output; the remaining 27% is oil.

In the three months ended March 31, 2012, Delphi’s average daily output rose 8.8%, to 8,993 barrels of oil equivalent (including natural gas) from 8,259 barrels a year earlier.

The higher production couldn’t offset lower natural gas prices. As a result, the company’s cash flow per share fell 38.5%, to $0.08 from $0.13.

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BELLATRIX EXPLORATION $3.49 (Toronto symbol BXE; TSINetwork Rating: Speculative) (403-266- 8670; www.bellatrixexploration.com; Shares outstanding: 107.5 million; Market cap: $375.2 million; No dividends paid) produces oil and natural gas in Alberta, B.C. and Saskatchewan. Gas makes up about 61% of its output; the remaining 39% is oil.

In the three months ended March 31, 2012, Bellatrix’s production rose 57.7%, to 15,900 barrels of oil equivalent per day (including natural gas) from 10,084 barrels. The company’s drilling success continues to add to its production: in the latest quarter, it drilled 13 wells with a 100% success rate.

Cash flow per share rose 58.8%, to $0.27 from $0.17. The big production increase offset a 41.1% drop in Bellatrix’s average selling price for gas, to $2.32 U.S. per thousand cubic feet from $3.94 U.S. a year ago. The company’s long-term debt is $146.2 million, or a manageable 39.0% of its market cap.

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IAMGOLD $9.38 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 376.1 million; Market cap: $3.5 billion; Dividend yield: 2.7%) is buying Trelawney Mining and Exploration (symbol TRR on Toronto).

Prices of junior mining stocks are depressed, so IAMGold is getting a bargain at $608 million, or $3.30 for each Trelawney share. That’s a premium on the $2.30 it was trading at before IAMGold’s offer, but it’s well below the high of $5.91 that Trelawney shares hit in July 2011.

Trelawney’s Cote Lake gold project, located between Timmins and Sudbury, could hold as much as 6.9 million ounces of gold. The deal also lets IAMGold expand its operations in politically safe countries; its biggest mines are in Suriname and Burkina Faso in West Africa.

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RUSSEL METALS $25.90 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 60.1 million; Market cap: $1.6 billion; Dividend yield: 5.4%) is one of North America’s largest metal distributors. The company serves its roughly 33,000 customers through a network of 51 locations in Canada and 12 in the U.S.

In the three months ended March 31, 2012, Russel’s revenue rose 22.1%, to $802.9 million from $657.7 million a year earlier. Revenue rose at all three of Russel’s divisions: The steel distribution division’s revenue rose 42% on higher sales volumes. Metal services revenue rose 18%, also on higher sales volumes. The energy tubular products division, which supplies pipes for oil and gas firms, saw its revenue rise 23%, because of increased drilling activity. Earnings per share were flat at $0.55 on steady steel prices.

Russel raised its quarterly dividend by 16.7% with the June 2012 payment, to $0.35 from $0.30. The stock now yields 5.4%. The company holds cash of $160.3 million, or $2.67 share. Its $294.6 million of long-term debt is a reasonable 18.9% of its market cap.

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WESTJET AIRLINES $15.48 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 130.8 million; Market cap: $2.0 billion; Dividend yield: 1.6%) serves 76 destinations in North America and the Caribbean. Its fleet of 98 modern Boeing Next-Generation 737s are 30% more fuel efficient than older aircraft. WestJet is scheduled to receive 37 more 737s through 2018.

In the three months ended March 31, 2012, West- Jet’s revenue rose 15.3%, to $781.5 million from $692.2 million a year earlier.

Earnings jumped 41.6%, to $68.3 million from $48.2 million. That’s a new record for the first quarter. It also marks the company’s 28th consecutive quarter of profitability. The higher revenue was the main reasons for the gain. Earnings per share rose 47.1%, to $0.50 from $0.34, on fewer shares outstanding.

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