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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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PASON SYSTEMS $14.24 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403- 301-3400; www.pason.com; Shares outstanding: 81.9 million; Market cap: $1.1 billion; Dividend yield: 3.1%) reported 31.8% higher revenue in the three months ended March 31, 2012, to $111.7 million from $84.7 million a year earlier. Many of the company’s clients increased their drilling, especially for shale gas and oil.

Earnings jumped 66.0%, to $29.5 million, or $0.36 a share, from $17.8 million, or $0.22 a share. Pason has raised its semi-annual dividend by 10%, to $0.22 from $0.20. The shares now yield 3.1%.

The company is heavily reliant on the resource sector. However, Pason’s revenue and earnings should keep rising as oil and gas drilling continues to increase.

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AMERIGO RESOURCES $0.61 (Toronto symbol ARG; TSINetwork Rating: Speculative) (604-681-2802; www.amerigoresources.com; Shares outstanding: 172.3 million; Market cap: $105.1 million; Dividend yield: 6.6%) processes copper and molybdenum from the waste rock from Chile’s El Teniente, the world’s largest copper mine. The contract runs at least through 2021. Amerigo has a further agreement to process a supplementary source of material from the nearby Colihues tailings pond.

The company gets 94% of revenue by processing copper. The remaining 6% comes from molybdenum.

Amerigo is now in discussions with El Teniente to process more waste rock at the site. Amerigo has started work on the design, engineering and permitting for a three-stage expansion that should double its production capacity. If the two companies can’t reach an agreement, El Teniente has agreed to reimburse Amerigo for any costs it incurs.

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SHERRITT INTERNATIONAL $5.26 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 296.7 million; Market cap: $1.6 billion; Dividend yield: 2.9%) is a diversified natural resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 376 megawatts of power generation capacity in Cuba.

Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to finishing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan. It is also Canada’s largest thermal coal producer.

In the three months ended March 31, 2012, Sherritt’s revenue fell 2.6%, to $462.2 million from $474.5 million a year earlier. Lower nickel prices were the main reason for the decline. Cash flow fell 17.0%, to $117 million, or $0.40 a share, from $141 million, or $0.48 a share. That was due to the lower revenue and higher production costs.

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TEMPUR-PEDIC $49.38 (New York symbol TPX; TSINetwork Rating: Speculative) (800- 878-8889; www.tempurpedic.com; Shares outstanding: 63.8 million; Market cap: $3.2 billion; No dividends paid) reported higher sales and earnings in the latest quarter. However, the company’s earnings estimate for 2012 was below expectations. The stock has since dropped 41%.

In the three months ended March 31, 2012, Tempur-Pedic’s earnings per share rose 26.5%, to $0.86 from $0.68. Sales rose 18.0%, to $384.4 million from $325.8 million.

Tempur-Pedic expects to earn $3.80 to $3.95 a share in 2012 on revenue of $1.6 billion to $1.65 billion. That’s below the consensus estimate of $3.97 a share on revenue of $1.66 billion.

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SYMANTEC CORP. $15.03 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 729.4 million; Market cap: $11.0 billion; No dividends paid) makes computersecurity software, including the popular Norton antivirus program. It also sells products and services for email filtering, data backup and other business-related uses. In addition, Symantec offers data-archiving software that helps its clients meet increasingly strict regulatory and compliance standards.

In the three months ended March 31, 2012, Symantec’s earnings per share excluding one-time items were unchanged at $0.38. That matched the consensus estimate. Sales rose slightly, to $1.68 billion from $1.67 billion. The company gets 52% of its sales from outside North America.

The main reason for the flat results was that the company is selling more of its products as ongoing subscriptions instead of one-time purchases. That gives Symantec steadier revenue streams but lower upfront sales. Sales of data-storage products are also down, mainly because the company completed several big contracts in the year-earlier quarter.

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ACI WORLDWIDE $40.01 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 39.8 million; Market cap: $1.6 billion; No dividends paid) makes software that is used to process transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments.

In mid-February 2012, ACI completed its purchase of S1 Corp. for $540 million in cash and stock. This acquisition is a good fit: S1 sells transaction software for banks, credit unions, retailers and other payment processors. It has over 3,000 clients worldwide.

In the first quarter of 2012, ACI’s revenue rose 31.6%, to $137.6 million from $104.5 million a year earlier. The gain was largely due to S1’s $22.5-million contribution. Without acquisition-related costs, earnings per share rose sharply, to $0.28 from $0.05.

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INTACT FINANCIAL CORP. $63.96 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 129.6 million; Market cap: $8.3 billion; Dividend yield: 2.5%) is Canada’s largest provider of property and casualty insurance, based on premiums. Its brands include Intact Insurance, Canada BrokerLink, belairdirect and Grey Power.

In the three months ended March 31, 2012, Intact’s revenue rose 47.9%, to $1.58 billion from $1.07 billion. That was mainly due to the contribution from AXA Canada, which Intact bought from Paris-based ASX Group for $2.6 billion last year.

AXA Canada is the country’s sixth-largest home, auto and commercial insurer. It also gives Intact a presence in Quebec, B.C. and Atlantic Canada.

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Pipelines have been in the news. Canada’s largest pipeline company, TransCanada Corporation (symbol TRP on Toronto) has made headlines with its ongoing disagreement with the U.S. government over the completion of its Keystone XL pipeline to the Gulf Coast. The Obama administration blocked the Nebraska section of the project last November, citing environmental concerns. TransCanada has submitted a proposal for a re-routing of the pipeline and is awaiting a new environmental review. Pembina Pipelines had attracted much less attention until it came up with some interesting news of its own this year: the purchase of a firm with significant assets in natural gas liquids (NGL)....

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 who is also a client of our portfolio management services had a question about one of Canada’s rising tech stocks. This broadcast equipment specialist, whose prominence has increased due to the upcoming Summer Olympics, is grooming itself as a takeover candidate....

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 week, Pat responds to a question about living off the income from dividend stocks during retirement. The way to do it, he tells viewers, is not to buy and hold dividend stocks indefinitely, but to buy, hold and watch carefully.
Q: Pat, here’s an interesting question. As I get closer to retirement, do you think I’ll be able to live off my dividends? How should I go about it?...

Over the course of the average month or year, we look at a great many stocks for our newsletters, our Inner Circle and our portfolio management clients. Of all the stocks we look at, we add only a tiny minority to those stocks we might think about recommending. There are several very good reasons why we are so particular with our stock choices....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific investment advice, including ways in which you can maximize your retirement income. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “It’s important to understand the limits of annuities if you plan to incorporate them into your retirement income.”...

The ability to weather a crisis is one of the distinguishing characteristics of the blue chip stocks we recommend. This multinational, one of the last survivors of the original 12 Dow Jones stocks of 1896, suffered a sharp setback during the financial crisis of 2008-2009. But its deep resources and diverse industrial base have allowed it to stage a recovery. General Electric Co. (New York symbol GE; www.ge.com) is one of the world’s largest manufacturers. It makes equipment for generating and distributing electricity, such as turbines (31% of revenue, 32% of earnings); aircraft engines (13%, 17%); health care equipment, such as medical scanners (13%, 14%); home appliances and lighting (6%, 1%); and locomotives (3%, 4%)....

TRANSCANADA CORP. $43.51 (Toronto symbol TRP; Shares outstanding: 704.2 million; Market cap: $30.6 billion; TSINetwork Rating: Above Average; Dividend yield: 4.1%; www.transcanada.com) is expanding its Tamazunchale pipeline, which pumps natural gas from Mexico’s state-owned oil company to gas-fired power plants. This extension will cost $500 million U.S. The company expects to complete the project in 2014.

The company has a 25-year supply deal with the state-owned power company, which cuts the risk of this project. Mexico continues to convert oil-fired power plants to gas, and TransCanada’s expertise should help it win more pipeline contracts.

TransCanada is a buy.

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NEWMONT MINING $48.42 (New York symbol NEM; Shares outstanding: 490.2 million; Market cap: $23.7 billion; TSINetwork Rating: Average; Dividend yield: 2.9%; www.newmont.com) stopped construction of its 51.35%-owned Conga gold/copper mine in Peru in November 2011. The move was in response to protests by local farmers who fear the mine will contaminate water supplies.

Newmont has a long record of responsible mining in Peru. However, an independent group is now reviewing the $4.8-billion mine’s environmental impact. Meanwhile, Newmont has cut 6,000 jobs at Conga. That will lower its losses until it can restart the project. It also puts pressure on Peru to resolve the dispute.

Newmont is a buy.

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ISHARES DEX UNIVERSE BOND INDEX FUND $31.01 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the DEX Universe Bond Index. The 591 bonds in the portfolio have an average term to maturity of 9.45 years. The fund’s MER is 0.32%.

The bonds in the index are 69.2% government and 30.8% corporate.

The fund yields 3.2%, compared to the Short Term Bond Fund’s 2.9%. Its yield to maturity is 2.51%, 0.76% above the Short Term Fund. That reflects the added risk of holding long-term bonds.

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ISHARES DEX SHORT TERM BOND INDEX FUND $28.94 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short Term Bond Index.

This index consists of a wide range of investment-grade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 295 bonds with an average term to maturity of 2.85 years. The bonds in the index are 64.2% government and 35.8% corporate. The fund’s MER is 0.26%.

iShares DEX Short Term Bond Index Fund yields 2.9%. However, this high yield is due to the fact that some of the fund’s bonds pay above-market interest rates. But as a result, they trade above their face value. When these bonds mature, holders will only get the bonds’ face value, which means the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.

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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 us about one of the mining stocks involved in the quest for rare earth metals. China’s iron grip on the rare earth market is a key factor in the pricing of these minerals, Pat notes, and he looks at how this stock is working to contest it with a re-opened mine and a new acquisition. ...

TORSTAR CORP. $10.75 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $858.9 million; TSINetwork Rating: Above Average; Dividend yield: 4.7%; www.torstar.com) owns 90% of a company that publishes free commuter newspapers under the Metro banner in major Canadian cities; Sweden’s Metro International SA owns the remaining 10%.

Torstar now plans to expand Metro to Saskatoon and Regina. It will also launch Internet versions for four more cities: Hamilton, Kitchener and Windsor, in Ontario, and Victoria, B.C. These free publications should help the company attract more younger readers, who tend to avoid traditional newspapers.

Torstar is a buy.

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PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $21.65 (Toronto symbol PMZ.UN; Units outstanding: 81.0 million; Market cap: $1.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.6%; www.primarisreit.com) owns large malls in medium-sized Canadian cities and suburban areas. In all, the trust owns 32 properties that contain 13.5 million square feet of leasable area.

Primaris has 44% of its properties in Ontario, followed by Alberta, 16%; B.C., 14%; Quebec, 13%; Saskatchewan, 9%; Manitoba, 3% and New Brunswick, 1%. Primaris has a 97.1% occupancy rate.

In the three months ended December 31, 2011, acquisitions pushed up Primaris’s revenue by 23.5%, to $104.1 million from $84.2 million. Cash flow rose 16.2%, to $34.7 million from $29.8 million. Cash flow per unit fell 3.2%, to $0.42 from $0.434, on more units outstanding. The trust yields 5.6%.

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ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $26.07 (Toronto symbol AP.UN; Units outstanding: 51.9 million; Market cap: $1.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.1%; www.alliedpropertiesreit.com) owns 100 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 7.8 million square feet of leasable area.

Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to office and retail space. They usually feature exposed beams, interior brick and hardwood floors.

In 2011, the trust bought 22 properties for $456 million. It now has 57 buildings in Toronto (which contain 42.9% of Allied’s leasable area); 15 in Montreal (35.9%); nine in Calgary (5.3%); seven in Winnipeg (5.3%); five in Quebec City (2.4%); four in Vancouver/Victoria (3.3%); two in Edmonton (3.7%); and one in Kitchener-Waterloo (1.2%). Allied has an occupancy rate of 94.3%.

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