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GENERAL MILLS INC. $38 (New York symbol GIS, Conservative Growth Portfolio, Consumer sector; Shares outstanding: 647.3 million; Market cap: $24.6 billion; Priceto- sales ratio: 1.5; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.generalmills.com) reported that its sales in the fiscal year ended May 27, 2012 rose 11.9%, to $16.7 billion from $14.9 billion in 2011. That’s mainly due to last year’s purchase of 51% of the company that makes Yoplait yogurt. General Mills also raised the selling prices of its cereals, soups and other products.

Earnings in fiscal 2012 fell 12.8%, to $1.6 billion, or $2.35 a share. It earned $1.8 billion, or $2.70 a share, in fiscal 2011. If you exclude the costs to integrate Yoplait and other unusual items, earnings per share would have risen by 3.2%, to $2.56 from $2.48.

Like Tupperware (see left), General Mills is targeting overseas markets for growth; international operations now account for 25% of its sales and 14% of its earnings. That’s why it recently agreed to pay $990 million for Yoki Alimentos S.A., a Brazilian maker of snack foods and seasonings. The deal should close by the end of 2012.

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TUPPERWARE BRANDS CORP. $54 (New York symbol TUP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 55.9 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) gets 70% of its sales by making high-quality products for the home, including plastic food and beverage containers and children’s educational toys. The remaining 30% comes from its beauty-products division, which makes a wide range of cosmetics, bath oils and fragrances.

Markets beyond the U.S. supply 90% of the company’s sales. Its main brands include Tupperware, Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare and Nuvo.

Tupperware prefers to sell its goods through independent dealers instead of retail stores. This helps keep its distribution and marketing costs down. As well, it pays its dealers commissions instead of salaries, so they have a greater incentive to promote Tupperware’s goods. That means the company rarely needs to use costly discounts to spur its sales.

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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. This past week, an Inner Circle member asked about one of the Canadian dividend stocks that was an income fund before the trust tax of 2011. This company raises revenue in a variety of ways, including the franchising of its company-owned gas stations, which allows it to collect commissions without high overhead. ...

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, including those for retirement planning, and still others focus on events that are affecting the markets and the economy. In today’s video, he replies to the many questions he receives on how much money people need to retire on. As he tells his personal Wealth Management clients, Pat explains, determining how much you need for your retirement is a lot more than just a matter of dollars and cents.
Q: Pat, we hear a lot these days about how much money people need to retire on. What do you tell your Wealth Management clients when they ask you about this?...

From time to time, I read articles saying that growing numbers of financial advisors and stockbrokers are abandoning the traditional buy-and-hold strategy. For instance, one article stated that some brokers were taking new approaches more in tune with the new “macro-economic climate.” That sounds suspiciously like just another way of trying to guess what will happen next....

When the government introduced its income trust tax, most real estate investment trusts (REITs) were exempted. A year and a half after the tax took effect, this has kept REITs popular among investors seeking income as well as capital gains. PRIMARIS RETAIL REAL ESTATEINVESTMENT TRUST (Toronto symbol PMZ.UN; www.primarisreit.com) owns large malls in medium-sized Canadian cities and suburban areas. In all, it owns 33 properties that contain 13.7 million square feet of leasable area....

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 week we respond to a question from an Inner Circle member asking about one of the Canadian stocks with important interests in a nation that has been living through a period of upheaval, Libya. Pat notes that this infrastructure and engineering specialist also does a lot of business in North America, and assesses its outlook. ...

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 still others offer investment advice related to events that are affecting the markets and the economy. In last week’s video, Pat advised against selling during the market downturn. This week, the market turned up and Pat thinks people should look closer to home than Europe for one of the reasons why. He also looks at what may be ahead for the stock market.
Q: Pat, last week you said people shouldn’t be dumping their stocks. This week the market turned up. Was that because of something that happened in Europe, and do you think the crisis is over?...

CARFINCO FINANCIAL GROUP $7.93 (Toronto symbol CFNI; TSINetwork Rating: Speculative) (1-888 -486-4356; www.carfinco.com; Shares outstanding: 24.6 million; Market cap: $195.1 million; Dividend yield: 5.3%) provides car loans to consumers who aren’t able to meet the criteria of traditional lenders, like banks.

Edmonton-based Carfinco started out by financing vehicle repairs in 1997. In 1999, it began providing loans for car and truck purchases. In January 2001, the company got out of the repair-financing business to focus solely on lending money to car buyers.

Carfinco converted from a conventional corporation to an income trust in 2004. It converted back to a corporation on January 1, 2012.

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MAJOR DRILLING $12.33 (Toronto symbol MDI; TSINetwork Rating: Speculative) (1-866- 264-3986; www.majordrilling.com; Shares outstanding: 79.1 million; Market cap: $982.2 million; Dividend yield: 1.2%) has moved down lately along with most mining and resource-related stocks. That’s because investors are concerned that a potential eurozone breakup, sluggish U.S. growth and a slowdown in China will hurt resource demand.

Even so, the company’s revenue rose 72.8% in the three months ended April 30, 2012, to a record $237.2 million from $137.3 million a year earlier. Earnings per share tripled, to $0.39 from $0.13.

Many of Major’s customers increased their drilling during the quarter, especially for gold, copper, coal and iron ore. Major raised its twice-yearly dividend by 12.5%, to $0.09 from $0.08, with the May 2012 payment. The stock now yields 1.5%.

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GOODYEAR TIRE & RUBBER CO. $11.65 (New York symbol GT; TSINetwork Rating: Extra Risk) (330 -796-2122; www.goodyear.com; Shares outstanding: 244.7 million; Market cap: $2.9 billion; No dividends paid) has announced a major expansion of its global off-the-road (OTR) tire business: The company has acquired 100% of its Nippon Giant Tire subsidiary in Japan. (OTR tires are used for heavy equipment.)

Goodyear now plans to spend $250 million to upgrade and expand Nippon Giant Tire’s manufacturing facility. When these improvements are completed, the plant will be able to make a complete line of 57-inch tires, as well as 63-inch tires at a future date.

OTR tire demand is growing rapidly in the mining and road construction industries, and this expansion will let Goodyear tap into that growth. It will also help the company grow further in the Asia-Pacific region, primarily in Australia, which is one of the world’s largest markets for OTR tires.

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FAIRFAX FINANCIAL HOLDINGS $392.57 (Toronto symbol FFH: TSINetwork Rating: Average) (416-367-2612; www.fairfax.ca; Shares outstanding: 19.9 million; Market cap: $7.8 billion; Dividend yield: 2.5%) has agreed to buy 77% of Thomas Cook (India) Ltd., a publicly traded company that sells travel, insurance and foreign exchange services in India.

Fairfax is buying this stake from struggling U.K.- based parent company Thomas Cook Group plc for $150 million U.S.

This investment should help Fairfax profit from increasing business travel to India.

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CHESAPEAKE ENERGY $19.04 (New York symbol CHK; TSINetwork Rating: Extra Risk) (405-848 -8000; www.chkenergy.com; Shares outstanding: 662.3 million; Market cap: $12.6 billion; Dividend yield: 1.8%) has moved up from its low of $13.32 in mid-May. That’s mainly because activist investor Carl Icahn has gotten involved in the company’s restructuring. Icahn, who has a long history of pushing companies to make changes that increase shareholder value, has acquired a 7.6% stake in Chesapeake.

Pressure from Icahn has already prompted Chesapeake to announce that it will replace four of its eight board members with nominees of its largest shareholders—Icahn and Southeastern Asset Management Inc., which holds a 13.6% stake.

Icahn now plans to push for cost-cutting measures and a more conservative approach to spending. His proposals will likely include cutting drilling budgets and selling certain pipelines and gas-processing plants.

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CAMECO CORP. $21.63 (Toronto symbol CCO; TSINetwork Rating: Extra Risk) (306- 956-6200; www.cameco.com; Shares outstanding: 395.3 million; Market cap: $8.6 billion; Dividend yield 0.7%) is buying Germany-based nuclear fuel broker Nukem Energy for $300 million.

Nukem acts as an intermediary between uranium buyers and sellers. It also sells uranium from two different sources: it has 4.5 million pounds recycled from dismantled Russian nuclear weapons, as well as newly mined uranium from mines in Uzbekistan.

Adding Nukem raises Cameco’s share of the global uranium market to 25% from 18%.

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NEW GOLD $10.16 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 461.7 million; Market cap: $4.7 billion; No dividends paid) has three operating mines: the Mesquite mine in the U.S., the Cerro San Pedro mine in Mexico and the Peak mine in Australia. It also owns 30% of the El Morro copper/gold project in Chile (Goldcorp owns the other 70%) and 100% of the New Afton gold/copper/silver project in B.C.

El Morro contains an estimated 4.7 million ounces of gold and 3.7 billion pounds of copper. New Afton holds 2.7 million ounces of gold, 2.5 billion pounds of copper and 8.3 million ounces of silver.

New Gold also owns the Blackwater property in central B.C., which could hold as much as 7.8 million ounces of gold.

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YAMANA GOLD $16.36 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 746.0 million; Market cap: $12.2 billion; Dividend yield: 1.3%) 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.

In the quarter ended March 31, 2012, Yamana’s revenue rose 17.6%, to $559.7 million from $476.1 million a year earlier (all figures except share price and market cap in U.S. dollars). The company increased its production and benefited from higher gold prices. Earnings per share rose 19.0%, to $0.25 from $0.21.

Yamana held a high cash balance of $867.6 million, or $1.16 a share, on March 31. Its $766.0 million of debt is just 6.3% of its market cap. Thanks to the improved results, the company is raising its quarterly dividend by 18.2% with the July 2012 payment, to $0.065 from $0.055. The shares now yield 1.3%.

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LEON’S FURNITURE $10.95 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 69.9 million; Market cap: $765.4 million; Dividend yield: 3.7%) reports that its sales rose 4.4% in the quarter ended March 31, 2012, to $157.4 million from $150.8 million a year earlier. However, earnings fell 16.5%, to $8.6 million, or $0.12 a share. A year earlier, the company earned $10.3 million, or $0.15 a share.

Leon’s spent more on marketing in the latest quarter, and it had to deduct some expenses left over from its opening of four new stores late last year.

Leon’s plans to continue its expansion by opening roughly five new stores a year over the next five years.

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TIM HORTONS $54.48 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 155.8 million; Market cap: $8.5 billion; Dividend yield: 1.6%) operates 3,295 coffee-and-donut shops in Canada and 714 in the U.S.

The company earned $0.56 a share in the three months ended April 1, 2012. That’s up 16.7% from $0.48 a share a year earlier.

Sales rose 12.1%, to $721.3 million from $643.5 million. Tim Hortons opened 22 outlets in Canada and seven in the U.S. during the quarter. Same-store sales (which exclude new outlets) rose 8.5% in the U.S. and 5.2% in Canada.

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CALIAN TECHNOLOGIES $20.20 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613-599-8600; www.calian.com; Shares outstanding: 7.7 million; Market cap: $155.5 million; Dividend yield: 5.2%) operates in two areas: the business and technology services division (which supplies 70% of Calian’s revenue) provides engineers, health care workers and other skilled professionals to clients on a contract basis. The systems engineering division (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems.

In the three months ended March 31, 2012, Calian’s revenue rose 3.7%, to $61.6 million from $59.4 million a year earlier. Earnings rose 12.8%, to $3.7 million, or $0.48 a share, from $3.3 million, or $0.42 a share.

Just before the quarter ended, Calian bought Primacy Management Inc., of Burlington, Ontario. Since 2003, Primacy has been designing, building and managing in-store health clinics for Loblaw Companies (symbol L on Toronto). Primacy now operates 112 such clinics in Loblaw’s stores across Canada.

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FORTRESS PAPER $19.87 (Toronto symbol FTP; TSINetwork Rating: Extra Risk) (1-888-820-3888; www.fortresspaper.com; Shares outstanding: 14.3 million; Market cap: $284.1 million; No dividends paid) has moved up over 20% since early June, mostly on a couple of positive developments.

First, Fortress’s facility in Thurso, Quebec, which it bought in early 2010, is now operating at 92% capacity. The pulp is meeting customer specifications, and shipments to China are increasing.

Second, the company’s Landqart banknote division in Switzerland has announced that a customer has reinstated a significant order that had been postponed. That should take up the excess capacity at the plant.

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DUNDEE REIT $37.67 (Toronto symbol D.UN; TSINetwork Rating: Speculative) (416-365-3535; www.dundeereit.com; Shares outstanding: 86.0 million; Market cap: $3.2 billion; Dividend yield: 5.8%) owns and manages 18.9 million square feet of office, industrial and retail space. The trust has a 95.6% occupancy rate. In the three months ended March 31, 2012, Dundee’s revenue jumped 64.9%, to $150.0 million from $91.0 million a year earlier. Most of the increase came from properties the trust recently purchased.

The best way to assess a real estate investment trust’s operating performance is to look at its cash flow, and Dundee’s cash flow rose 62.6% in the latest quarter, to $41.0 million from $25.2 million. Cash flow per unit rose 14.5%, to $0.63 from $0.55, due to more units outstanding (the trust issued new units to pay for the acquired properties).

Dundee’s growth-by-acquisition strategy adds risk, but it is diversifying outside western Canada. At the start of 2010, about 70% of its properties were in western Canada. That’s now down to less than 55%.

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CHEMTRADE LOGISTICS INCOME FUND $15.05 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics.com; Units outstanding: 41.7 million; Market cap: $627.6 million; Dividend yield: 8.0%) 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 processing activities. Chemtrade converts these substances into useful chemicals, like sulphuric acid.

In the three months ended March 31, 2012, Chemtrade’s revenue rose 34.4%, to $227.9 million from $169.6 million. That mostly reflects the contribution of Marsulex Inc., which Chemtrade bought for $419.5 million in cash and stock in June 2011.

Cash flow rose 6.0%, to $27.5 million from $25.9 million. Cash flow per share fell 28.6%, to $0.66 from $0.84, on more shares outstanding from the Marsulex purchase.

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WESTJET AIRLINES $15.73 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 130.1 million; Market cap: $2.0 billion; Dividend yield: 1.5%) is upgrading its interline agreement with Korean Air to a full codesharing deal.

WestJet will now be able to sell seats on Korean Air flights. That will let WestJet serve more cities without having to add flights of its own.

Code-sharing agreements are especially valuable for attracting business passengers, because they let customers seamlessly connect between flights and gain frequent flyer points for the entire distance travelled.

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ADOBE SYSTEMS $31.99 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 496.1 million; Market cap: $15.9 billion; No dividends paid) makes software that lets computer users create, edit and share documents in the popular PDF format. As well, graphic designers use its software to create print publications and web pages.

The company also makes Adobe Flash, which lets website developers make their pages more interactive by adding animation and video. Around 98% of the world’s computers have Flash installed on them.

Last year, Adobe stopped making Flash for smartphones and other mobile devices. Instead, it’s focusing on developing products that are based on the newer HTML5 Internet standard.

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FAIR ISAAC CORP. $42.44 (New York symbol FICO; TSINetwork Rating: Average) (415-472-2211; www.fairisaac.com; Shares outstanding: 34.3 million; Market cap: $1.5 billion; Dividend yield: 0.2%) makes FICO Scores, the computer program that dominates the market for software that businesses use to evaluate customer creditworthiness. The company is also profiting by selling software that helps credit card issuers control fraud and analyze their clients’ spending patterns.

In its fiscal 2012 second quarter, which ended March 31, 2012, Fair Isaac’s earnings per share excluding one-time items jumped 41.0%, to $0.55 from $0.39. The company’s ongoing cost cuts were a major reason for the increase. Sales rose 4.4%, to $159.5 million from $152.8 million.

Fair Isaac spends around 10% of its sales on research. That lets it keep producing innovative new products that help it stay ahead of its competitors.

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