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DUNDEE CORP. $24 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 51.7 million; Market cap: $1.2 billion; Price-to-sales ratio: 6.6; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) is buying the 51% of Dundee Capital Markets Inc. (Toronto symbol DCM) that it does not already own. This business sells investment-management and brokerage services.

This purchase will cost Dundee roughly $89 million, which is slightly more than the $88.6 million, or $1.29 a share, that it earned in the three months ended September 30, 2011. Taking full control will let Dundee lower this business’s administrative and other costs. The deal needs shareholder and regulatory approvals, but it should close in the first half of 2012.

Dundee is a buy.

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GENNUM CORP. $5.95 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.5 million; Market cap: $211.2 million; Price-to-sales ratio: 1.5; Dividend yield: 2.4%; TSINetwork Rating: Average; www.gennum.com) designs chips and other electronic equipment that lets television broadcasters store, edit and transfer video signals.

The company is now expanding into chips that speed up the flow of data in computer networks. In April 2011, it paid $35.9 million for U.K.-based Nanotech Semiconductor Ltd., which designs chips for communications networks (all amounts except share price and market cap in U.S. dollars).

In its third quarter, which ended August 31, 2011, Gennum’s sales rose 6.6%, to $36.7 million from $34.4 million a year earlier. The gain mainly reflects the contribution from Nanotech.

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NORDION INC. $9.02 (Toronto symbol NDN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 62.4 million; Market cap: $562.8 million; Price-to-sales ratio: 2.0; Dividend yield: 4.5%; TSINetwork Rating: Extra Risk; www.nordion.com) supplies medical isotopes for cancer detection and research. It also makes products that sterilize surgical tools and food.

In its 2011 fiscal year, which ended October 31, 2011, Nordion’s revenue rose 23.5%, to $274.0 million from $222.0 million in fiscal 2010 (all amounts except share price and market cap in U.S. dollars).

Revenue at Nordion’s sterilization equipment division (which supplies 40% of its overall revenue) rose 4.9% in 2011, mainly because the company raised the prices of these products and benefited from favourable exchange rates.

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RESEARCH IN MOTION INC. $16 (Toronto symbol RIM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.2 million; Market cap: $8.4 billion; Price-to-sales ratio: 0.4; No dividends paid; TSINetwork Rating: Above Average; www.rim.com) has suffered several setbacks in the past few months, including a network outage in October 2011 that stopped or slowed the delivery of emails to its BlackBerry smartphone users. As well, sales of RIM’s PlayBook tablet computer have been slower than expected. That forced RIM to write down unsold inventory.

Excluding unusual items, RIM’s earnings fell 26.8% in its fiscal 2012 third quarter, which ended November 26, 2011, to $667 million, or $1.27 a share. (All amounts except share price and market cap in U.S. dollars.) A year earlier, it earned $911 million, or $1.74 a share. RIM spends 7% of its revenue on research.

Revenue fell 5.9%, to $5.2 billion from $5.5 billion. However, revenue is up 24.0% from $4.2 billion in the second quarter, thanks to the launch of new smartphones and strong sales in the U.K., France, South Africa, Mexico and Argentina. Hardware sales accounted for 79% of RIM’s revenue in the latest quarter, followed by services (19%) and software (2%).

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CGI GROUP INC. $19 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 260.7 million; Market cap: $5.0 billion; Price-to-sales ratio: 1.1; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) was our “#1 Stock of the Year” for 2010 and 2011.

The company is Canada’s largest provider of computer-outsourcing services. CGI’s services can automate routine functions, such as accounting and buying supplies. That makes its clients more efficient, and lets them focus on their main businesses.

CGI’s earnings jumped 19.9% in its 2011 fiscal year, which ended September 30, 2011, to $435.1 million from $362.8 million a year earlier. CGI spent $305.0 million on share buybacks in fiscal 2011. Due to fewer shares outstanding, earnings per share rose 27.4%, to $1.58 from $1.24. Revenue rose 15.8%, to $4.3 billion from $3.7 billion. If you exclude the negative impact of exchange rates, revenue would have risen 18.9%.

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CANADIAN PACIFIC RAILWAY LTD. $69 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 169.7 million; Market cap: $11.7 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.cpr.ca) transports freight between Montreal and Vancouver, and connects with hubs in the U.S. Midwest and Northeast. It gets 25% of its revenue from the U.S.

CP’s revenue rose 16.7%, from $4.6 billion in 2006 to $5.3 billion in 2008, as rising Asian trade pushed up freight volumes. CP’s $1.5-billion purchase of Dakota, Minnesota & Eastern Railroad (DM&E) October 2008 brought in more revenue. DM&E operates a 4,000-kilometre rail network in eight midwestern states.

The recession cut CP’s revenue by 17.7% in 2009 to $4.4 billion. However, revenue rose 13.2%, to $5.0 billion, in 2010. Even with its weather-related problems in the first half of 2011, revenue for the full year probably rose to $5.2 billion.

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KRAFT FOODS INC. $36 (New York symbol KFT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.8 billion; Market cap: $64.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.kraft.com) plans to break itself into two separate, publicly traded companies by the end of 2012. One company will sell snack foods, such as Oreo cookies, Cadbury chocolates, Trident gum and Tang powdered beverages. This business will have annual sales of $32 billion, with 42% of that coming from developing markets, such as China, Brazil and India. The other company will consist of Kraft’s slower-growing grocery-products business, which mainly sells its foods in North American supermarkets. These products include Kraft macaroni and cheese, Oscar Mayer meats, Philadelphia cream cheese, Maxwell House coffee, Jell-O desserts and Miracle Whip salad dressing. This company will have $16 billion of annual sales....

The fast-food business is generally associated with inexpensive food and plain décor. It is rarely associated with healthy eating. But one U.S. chain has adopted a higher quality approach, so far with success. CHIPOTLE MEXICAN GRILL (New York symbol CMG; www.chipotle.com) is a Denver-based Mexican-restaurant chain. The company charges slightly higher prices than fast-food chains, but it offers higher-quality food, including naturally raised meat, and better decor and service....

NEWMONT MINING CORP. $61 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 494.8 million; Market cap: $30.2 billion; Price-to-sales ratio: 3.3; Dividend yield: 2.3%; TSINetwork Rating: Average; www.newmont.com) is one of the world’s largest gold-mining companies. It has major mines in the U.S., Australia and Peru. Newmont gets about 90% of its revenue from gold. It gets the remaining 10% from copper, zinc and other metals. Most of Newmont’s copper comes from its 27.56% stake in the large Batu Hijau mining complex in Indonesia. Combined with financing arrangements the company has with other Batu Hijau shareholders, Newmont’s economic interest in this mine is effectively 44.56%. The company prefers to sell its gold at the market price instead of through long-term hedging contracts that lock in prices. This policy has helped it take full advantage of rising gold prices: Newmont’s average realized gold price jumped 105.7%, from $594 an ounce in 2006 to $1,222 in 2010....

Successful investors know that there is more to good stock investing than simply picking stocks whose share prices will rise. You add a great deal of value to your portfolio when you also select stocks that are prepared to distribute their profits to the shareholders. A company can share the wealth in two main ways—it can buy back its own shares, or it can pay dividends. Both pay off for investors, especially in BCE’s case....

Pat McKeough responds to many personal questions on specific stocks and other investing topics from the members of his Inner Circle. Every week, his comments and recommendations on a selection of the most intriguing questions of the past week go out to all Inner Circle members. And every Friday, we offer you one of the highlights from these Q&A sessions. This week an Inner Circle, one question on stock market investments concerned a company that executed a major spinoff this past autumn, changing its name and turning its focus toward premium spirits. Q: Hi Pat: Can you give your opinion on Beam Inc.? It has a lot of good brands. Looking forward to your comments....

From time to time, we look at the negative side of investing, on the theory that successful investors learn from mistakes. If you’re more aware of critical errors, you may be able to avoid them altogether or at least cut your losses. Today we examine three common mistakes that most investors will fall into at some time.

• Error #1: Trying to time the market. Our view is that nobody guesses right every time about the direction of the stock market. Some of the most prominent people in the investment world owe their notoriety to a series of correct guesses that could end at any time....

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 advice and insights, such as how we select our top stock picks. 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: “Use our TSINetwork rating system to pick winning stocks.”...

CAMPBELL SOUP CO. $32 (New York symbol CPB; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 318.7 million; Market cap: $10.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.campbellsoupcompany.com) is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices.

The company’s sales rose 1.7%, from $7.9 billion in 2007 to $8.0 billion in 2008 (fiscal years end July 31). Sales fell to $7.6 billion in 2009, but rose to $7.7 billion in 2011.

Erratic earnings set to stabilize

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NEWMONT MINING CORP. $60 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 493.1 million; Market cap: $29.6 billion; Price-to-sales ratio: 2.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.newmont.com) expects its overall copper production will fall to around 160 million pounds in 2012 from 206 million pounds in 2011. That’s because the operators of its 44.56%-owned Batu Hijau open-pit copper mine in Indonesia need time to clear out waste material so they can reach lower depths with higher grades of copper. As well, Newmont expects its copper production costs to jump to between $1.80 and $2.20 per ounce in 2012 from $1.26 in 2011.

The company also expects to produce 5.0 million to 5.2 million ounces of gold in 2012, which is comparable to the 5.2 million ounces it produced in 2011. However, due to rising power and labour costs at its Australian mines, its gold-production costs will jump to between $625 and $675 an ounce from $592 in 2011.

Newmont’s long-term outlook remains bright. Concerns over European sovereign debt should continue to spur gold prices. Copper prices should also rebound in 2012, as global consumption will probably exceed production.

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PEPSICO INC. $67 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $107.2 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.pepsico.com) will make and distribute Ocean Spray cranberry drinks in Latin America under a new 20-year deal with Ocean Spray Cranberries, Inc.

The two companies already have a similar deal in the U.S., where Ocean Spray’s volumes have risen 20% since 2006. PepsiCo feels its marketing expertise and distribution networks will help it repeat this success in Latin America.

PepsiCo is a buy.

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CHEVRON CORP. $108 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.0 billion; Market cap: $216.0 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.chevron.com) recently announced that it had discovered promising new gas wells off the northwest coast of Australia. This was its 13th discovery in the area since 2009.

These discoveries enhance the prospects of Chevron’s Gorgon liquefied natural gas (LNG) project in Australia. Gorgon will convert gas from these offshore fields into a liquid. The company will then ship the LNG on tankers to customers in Asia.

Chevron owns 47% of Gorgon, and will operate it. The company’s share of the $37-billion development cost is $17.4 billion. Gorgon should start producing in 2014. Chevron expects the Australian wells to last 40 years.

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WELLS FARGO & CO. $30 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 5.3 billion; Market cap: $159.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.6%; TSINetwork Rating: Average; www.wellsfargo.com) earned $15.0 billion in 2011. That’s up 29.2% from $11.6 billion in 2010. Earnings per share rose 27.6%, to $2.82 from $2.21, on more shares outstanding. More clients are repaying their loans on time. As a result, loan-loss provisions fell 49.9%, to $7.9 billion from $15.8 billion. This was the main reason for earnings gain.

Revenue fell 5.0%, to $80.9 billion from $85.2 billion. Demand for mortgages and credit cards is rising. However, the bank is getting less interest income from borrowers due to today’s low interest rates.

Wells Fargo is still a hold.

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CEDAR FAIR L.P. $25 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.4 million; Market cap: $1.4 billion; Price-to-sales ratio: 1.4; Dividend yield: 6.4%; TSINetwork Rating: Average; www.cedarfair.com) had a record 23.4 million visitors at its amusement parks, water parks and hotels in 2011. That’s up 2.6% from 22.8 million in 2010.

As a result, the partnership estimates that its revenue increased 5.4% in 2011, to $1.03 billion from $977.6 million in 2010. Thanks to its improving outlook, the partnership expects to pay distributions of $1.60 a unit in 2012 (for a 6.4% yield). That’s up 60.0% from $1.00 in 2011.

Cedar Fair is a buy.

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FAIR ISAAC CORP. $39 (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.7 million; Market cap: $1.4 billion; Price-to-sales ratio: 2.2; Dividend yield: 0.2%; TSINetwork Rating: Average; www.fico.com) sells products and services that help businesses around the world make better decisions on customer creditworthiness.

Fair Isaac is starting to see the benefits of its recent restructuring plan, which included cutting 9% of its workforce and combining facilities.

In its 2011 fiscal year, which ended September 30, 2011, Fair Isaac’s earnings rose 22.4%, to $80.2 million from $65.6 million in fiscal 2010. The company spent $96.3 million in 2011 on share buybacks. Because of a 9.7% drop in the number of shares outstanding, earnings per share jumped 38.6%, to $2.01 from $1.45. Revenue rose 2.3%, to $619.7 million from $605.6 million. Lower loan demand pushed down sales of credit scores to lenders. However, higher sales of fraud-detection products more than offset this drop.

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BROADRIDGE FINANCIAL SERVICES INC. $24 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 124.1 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.7%; TSINetwork Rating: Average; www.broadridge.com) serves the investment industry in three areas: investor communications, securities processing and transaction clearing.

In its fiscal 2012 first quarter, Broadridge earned $19 million. That’s up 46.2% from $13 million a year earlier. Earnings per share rose 50.0%, to $0.15 from $0.10, on fewer shares outstanding. Revenue rose 13.1%, to $476.4 million from $421.4 million.

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AGILENT TECHNOLOGIES INC. $44 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 348.1 million; Market cap: $15.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 0.9%; TSINetwork Rating: Average; www.agilent.com) makes testing systems that help improve electronic
devices, such as cellphones. It also makes medical and drug-testing equipment.

The company will pay its first-ever quarterly dividend of $0.10 a share in April 2012. The annual rate of $0.40 yields 0.9%.

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DIEBOLD INC. $32 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 62.6 million; Market cap: $2.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.5%; TSINetwork Rating: Average; www.diebold.com) makes ATMs, safes, vaults and building security systems.

Diebold spends 3% of its revenue on research. This has helped it develop innovative new products, such as its Opteva Flex Performance ATMs. These models can sort banknotes that customers deposit and then reissue them to other users. This reduces the need to refill these ATMs with fresh bills.

In the third quarter of 2011, Diebold’s revenue fell 5.2%, to $709.3 million from $748.6 million a year earlier. That’s mainly due to lower sales of lottery and voting equipment in Brazil.

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NCR CORP. $18 (New York symbol NCR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 157.4 million; Market cap: $2.8 billion; Price-to-sales ratio: 0.5; No dividends paid; TSINetwork Rating: Average; www.ncr.com) is a leading maker of ATMs, checkout scanners, cash registers and self-serve kiosks.

In August 2011, NCR paid $1.2 billion for Radiant Systems Inc., which makes point-of-sale terminals and self-serve kiosks for hotels, restaurants and gas stations. This purchase will cut NCR’s reliance on ATMs, which account for 55% of its overall revenue.

In the quarter ended September 30, 2011, NCR’s revenue rose 16.2%, to $1.4 billion from $1.2 billion. Radiant contributed $36 million to the increase. NCR earned $16 million, or $0.10 a share. That’s down 79.5% from $78 million, or $0.48 a share, a year earlier. Without costs to integrate Radiant, earnings per share rose 15.2%, to $0.53 from $0.46.

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INTERNATIONAL FLAVORS & FRAGRANCES INC. $57 (New York symbol IFF; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 80.9 million; Market cap: $4.6 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.iff.com) aims to make its fragrances division more profitable. This business makes compounds that improve the smells of soaps, detergents and air fresheners.

As part of this plan, IFF will increase its focus on emerging markets. As a result, it will cut 70 employees worldwide. It will pay severance and other costs of $10 million, or $0.08 a share; IFF earned $81.8 million, or $1.00 a share, in the third quarter of 2011. The plan should save it $9 million a year, starting in 2012.

International Flavors & Fragrances is a buy.

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