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I’d say a product walking out of the store is a good reason for further study, but don’t buy blind. Because there might have been a temporary

There’s no limit to the types of financial questions members of my Inner Circle can ask me and my team of investment experts. Aside from questions on specific investments like stocks and exchange-traded funds, members ask us many other questions about how they should be investing their money. One very interesting question came from a member who asked whether there is any advantage to investing money in a prepaid funeral. So you can get a sense of how our Inner Circle works, I’d like to share this question, and our answer, with you. Q: At 57 years old, it seems reasonable to me to lock in funeral costs at today’s prices and pay for it now. This makes even more sense since I can reasonably expect to live another 25 years. Funeral costs for any level of funeral have doubled every 10 years over the past 30 years, according to the brochure. Does this make sense to you?...

Some investors rely on technical analysis (basically, chart reading) when picking stocks. Relying on charts seems simpler than delving into a company’s fundamentals.

POTASH CORP. OF SASKATCHEWAN $43 (www.potashcorp.com) has cut potash production because rising inventories have pushed down prices. However, poor weather in South America will likely cut this year’s soybean harvest....

NORDION INC. $9.08 (www.nordion.com) continues to have success with TheraSphere, a process that it developed for treating liver cancer using millions of small glass beads that contain radioactive materials....

LINAMAR CORP. $21 (www.linamar.com) earned $1.64 a share in 2011. That’s up 20.6% from $1.36 in 2010. Sales rose 28.4%, to $2.9 billion from $2.2 billion. The company continues to win new contracts to supply transmissions and other parts to carmakers in Asia and Europe....

TECK RESOURCES LTD. $35 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 586.0 million; Market cap: $20.5 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.teck.com) is a leading producer of metallurgical coal, a key ingredient in steelmaking. Coal accounted for 49% of Teck’s 2011 revenue and 57% of its earnings. The company also produces copper (27%, 28%) and zinc (24%, 15%).

Teck continues to benefit as the recovering global economy pushes up commodity prices. As well, in 2008, the company bought the 80.05% of Fording Canadian Coal that it didn’t already own. This purchase has further spurred Teck’s growth.

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LOBLAW COMPANIES LTD. $33 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 281.4 million; Market cap: $9.3 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.loblaw.ca) is buying most of the Zellers department store chain’s prescription drug accounts.

U.S.-based Target Corp. (New York symbol TGT) recently acquired over 220 Zellers stores as part of its plan to expand into Canada. However, it will take Target several months to renovate these locations. As a result, Target decided not to take over Zellers’ drug business and will instead open its own pharmacies in these stores.

Loblaw will pay $35 million for the Zellers accounts. That’s equal to 5% of its 2011 earnings of $769 million, or $2.73 a share. Selling drugs is more profitable than sales of food or general merchandise, so these new accounts should boost Loblaw’s earnings. The purchase will also draw more traffic to Loblaw’s stores.

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CANADA BREAD CO. LTD. $46 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.canadabread.ca) earned $3.43 a share in 2011, up 18.3% from $2.90 in 2010, mainly due to a one-time tax benefit. The company’s plan to close three older bakeries and shift their operations to a new, more efficient facility in Hamilton, Ontario will also improve its earnings.

Sales rose just 0.4% in 2011, to $1.60 billion from $1.59 billion. That’s largely because the company sold its fresh sandwich business in February 2011.

Canada Bread is a hold.

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IMPERIAL OIL LTD. $43 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $36.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.1%; TSINetwork Rating: Average; www.imperialoil.ca) has slowed work on its proposed Mackenzie pipeline project, which would pump natural gas from the Arctic to Alberta. (Imperial owns 34.4% of this project, which has already received regulatory approval.)

That’s because rising production of natural gas from shale rock has depressed gas prices in the past few years. As well, higher prices for raw materials would increase the project’s estimated cost of $16.2 billion.

If Imperial decides to proceed, the new line could start up in 2018. The company feels that gas prices will be higher by then, as more coal-fired power plants switch to cleaner-burning natural gas.

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IGM FINANCIAL INC. $46 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 256.7 million; Market cap: $11.8 billion; Price-to-sales ratio: 4.3; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.igmfinancial.com) reports that it had $124.1 billion of assets under management as of March 31, 2012. That’s down 7.4% from $134.1 billion a year earlier. Lower share prices were the main reason for the drop.

IGM’s fee income rises and falls with the value of the mutual funds and other securities it manages, so the company’s revenue and earnings suffer when the value of these assets falls. Still, low interest rates will probably spur investors to shift from fixed-income investments to equity-based mutual funds over the next few months.

IGM Financial is a buy.

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BOMBARDIER INC. (Toronto symbols BBD.A $4.04 and BBD.B $3.93; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $6.9 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.5%; TSINetwork Rating: Average; www.bombardier.com) has won a contract to build 300 subway cars for the New York City public transit system. The company will begin delivering these trains in 2016.

The $600-million deal is small next to Bombardier’s annual revenue of $18.3 billion (all amounts except share price and market cap in U.S. dollars). However, orders like this will help Bombardier win more contracts from other major cities.

Bombardier is a buy. The cheaper class B shares are the better choice.

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SHAWCOR LTD. $30 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.6 million; Market cap: $2.1 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.1%; TSINetwork Rating: Average; www.shawcor.com) gets 88% of its revenue by making sealants and coatings that keep oil and gas pipelines from rusting. It gets the remaining 12% by making electrical wire and protective sheaths.

ShawCor has won over $800 million of new contracts since October 2011. That includes a $400-million U.S. deal to coat an undersea natural gas pipeline in western Australia.

These new orders pushed up the company’s revenue by 11.9% in 2011, to $1.2 billion from $1.0 billion in 2010. ShawCor gets two-thirds of its revenue from outside Canada, and the high Canadian dollar cut the contribution of its overseas operations by $22.4 million.

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PRECISION DRILLING CORP. $8.91 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 276.1 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.3; No dividends paid since February 2009; TSINetwork Rating: Extra Risk; www.precisiondrilling.com)
provides contract drilling services to land-based oil and gas producers, mainly in North America. It had 337 rigs in service at the end of 2011.

The company continues to gain as oil producers step up their drilling activity to take advantage of rising oil prices. In 2011, Precision’s revenue rose 36.5%, to $1.95 billion from $1.4 billion in 2010. Earnings soared 344.4%, to $193.5 million, or $0.67 a share, from $43.5 million, or $0.15 a share.

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CAE INC. $10 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 257.9 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.cae.com) makes flight simulators and runs pilot training schools.

In its 2012 third quarter, which ended December 31, 2011, CAE’s revenue rose 10.3%, to $453.1 million from $410.8 million a year earlier.

Demand for the company’s pilot training services continues to rise as airlines upgrade their fleets. That pushed up revenue by 13% at CAE’s civil division (which supplies 45% of the company’s overall revenue).

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TRANSCANADA CORP. $43 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 704.1 million; Market cap: $30.3 billion; Price-to-sales ratio: 3.3; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.transcanada.com) gets 9% of its revenue from its minority stake in the Bruce nuclear power complex in central Ontario.

The company and its partners are nearly finished upgrading two of the plant’s eight reactors, which have been out of service since 1995. They plan to restart both by September 30, 2012. The plant will then supply 25% of Ontario’s power. Right now, Bruce’s six operating reactors account for 19% of the province’s power.

TransCanada is a buy.

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DUNDEE CORP. $24 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 55.0 million; Market cap: $1.3 billion; Price-to-sales ratio: 6.6; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) is a holding company with subsidiaries in wealth management, real estate, resources and agriculture.

Dundee is riskier than the big five banks. That’s because sales of individual investments can have a big impact on its earnings. For example, in 2011, it recorded an $870.8-million gain on the sale of subsidiary DundeeWealth. Without that gain, Dundee’s earnings fell 13.1%, to $173.2 million from $199.3 million in 2010. Earnings per share rose 5.9%, to $2.17 from $2.05, on fewer shares outstanding. Revenue fell 15.7%, to $574.0 million from $680.8 million.

Dundee is still a buy.

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CANADIAN IMPERIAL BANK OF COMMERCE $75 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 402.7 million; Market cap: $30.2 billion; Price-to-sales ratio: 1.9; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.cibc.com) is Canada’s fifth-largest bank, with total assets of $391.4 billion.

CIBC plans to sell FirstLine, which provides mortgages through third-party brokers, and instead build up its in-house mortgage business.

The bank should earn higher profits from its mortgages as a result. It will also be able to promote credit cards and other products to its mortgage clients. CIBC aims to complete the sale over the next few months.

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BANK OF MONTREAL $58 (Toronto symbol BMO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 640.4 million; Market cap: $37.1 billion; Price-to-sales ratio: 2.0; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.bmo.com) is Canada’s fourth-largest bank, with assets of $538.3 billion.

Bank of Montreal continues to profit from last year’s purchase of U.S. banking firm Marshall & Ilsley Corp. for $4.0 billion in stock. That more than doubled the number of branches Bank of Montreal operates in the U.S. It also added 2 million customers. The bank now gets 20% of its revenue and earnings from its U.S. retail banking operations.

Meanwhile, the bank’s earnings rose 19.3% in the quarter ended January 31, 2012, to $953 million from $799 million a year ago. Earnings per share rose 7.6%, to $1.42 from $1.32, on more shares outstanding. These figures exclude unusual items, such as costs to integrate the new U.S. operations.

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p>TORONTO-DOMINION BANK $83 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 909.2 million; Market cap: $75.5 billion; Price-to-sales ratio: 2.7; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.td.com) is Canada’s second-largest bank, with total assets of $773.7 billion. In December 2011, TD completed its $6.8-billion purchase of MBNA’s Canadian credit card operations from Bank of America (New York symbol BAC). These assets are a great fit for TD: They added 1.8 million clients to its 4.0 million credit card accounts. As well, MBNA is the largest MasterCard issuer in Canada. That diversifies TD’s credit card business beyond its current Visa cards.

The MBNA division should add $0.05 a share to TD’s annual earnings in the first year, and $0.10 a share thereafter.

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ROYAL BANK OF CANADA $56 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.4 billion; Market cap: $78.4 billion; Price-to-sales ratio: 2.2; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.rbc.com) is Canada’s largest bank, with $815.0 billion of assets.

The U.S. Commodity Futures Trading Commission (CFTC) recently accused Royal of using a complex series of trades to cut its tax bill in Canada. Specifically, the CFTC says that divisions of the bank bought Canadian and U.S. dividend-paying stocks (plus futures contracts on these stocks) and quickly sold them to other divisions. These transactions would let Royal earn tax credits on the dividends it received from these holdings.

The CFTC claims that this process was a wash trade, in which the bank artificially set prices for these transactions, instead of letting the market determine the prices. Royal has denied these allegations, and we agree with Royal. As well, any potential fine would likely be small next to Royal’s earnings.

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PENGROWTH ENERGY CORP. $8.96 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 360.3 million; Market cap: $3.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 9.4%; TSINetwork Rating: Average; www.pengrowth.com) has a long history of using acquisitions to expand, which adds risk. However, these purchases have increased its reserves and cash flow.

Its latest acquisition is NAL Energy Corp. (Toronto symbol NAE). NAL investors will receive 0.86 of a Pengrowth common share for each share they hold. That will give them 26% of the combined company. The deal should close by May 31, 2012.

Adding NAL’s properties in Alberta and B.C. (54% natural gas and 46% oil) will increase Pengrowth’s projected 2012 production by about 16%, to between 86,000 and 89,000 barrels of oil equivalent a day.

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BANK OF NOVA SCOTIA $55 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $60.5 billion; Price-to-sales ratio: 2.2; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.scotiabank.com) is Canada’s third-largest bank, with assets of $637.1 billion.

During the financial crisis, the bank’s revenue fell 4.9%, from $12.5 billion in 2007 to $11.9 billion in 2008 (fiscal years end October 31). As the crisis passed, revenue rebounded by 45.6%, to $17.3 billion, in 2011.

Earnings fell 23.9%, from $4.01 a share (or a total of $4.0 billion) in 2007 to $3.05 a share (or $3.0 billion) in 2008. That’s largely because the bank’s loan-loss provisions rose as some of its clients fell behind on their payments. Writedowns of securities also contributed to the drop. However, earnings recovered to $3.31 a share (or $3.4 billion) in 2009, and reached $4.62 a share (or $5.0 billion) in 2011.

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TECK RESOURCES LTD. $36 (www.teck.com) plans to sell $1 billion U.S. of new long-term bonds. It will use the cash to redeem $1.05 billion U.S. of its existing debt. The company will record a one-time, non-cash charge of $340 million U.S....

A positive outlook for the Canadian economy will continue to boost stocks across many industries. Some stocks benefit by supplying different industries, like this heavy equipment supplier we have just added it to the list of growth stocks we cover in our newsletter for aggressive investing, Stock Pickers Digest. WAJAX CORP. (Toronto symbol WJX; www.wajax.ca) sells and services heavy equipment, including cranes and forklifts. It also sells related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions)....