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WESTERN UNION CO. $18 (New York symbol WU; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 620.3 million; Market cap: $11.2 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.westernunion.com) provides money-transfer and foreign-exchange services in over 200 countries.

In November 2011, the company paid $967.8 million for the business-payments division of U.K.-based Travelex Holdings Ltd. This subsidiary processes payments for 35,000 businesses in 14 countries.

These operations helped push up Western Union’s revenue by 5.8% in 2011, to $5.5 billion from $5.2 billion in 2010. If you exclude integration costs and other unusual items, earnings rose 4.9%, to $995.8 million from $949.2 million. Earnings per share rose 10.6%, to $1.57 from $1.42, on fewer shares outstanding.

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T. ROWE PRICE GROUP INC. $64 (Nasdaq symbol TROW; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 253.5 million; Market cap: $16.2 billion; Price-to-sales ratio: 6.0; Dividend yield: 2.1%; TSINetwork Rating: Average; www.troweprice.com) sells mutual funds and wealth management services.

On December 31, 2011, the company had $489.5 billion of assets under management, up from $482.0 billion a year earlier.

That’s mainly because T. Rowe Price sold $11.0 billion of mutual funds (net of redemptions) during the year. It continues to see strong demand for its “Retirement Funds,” which invest in its other funds and automatically adjust the buyer’s portfolio balance according to their age. Retirement Funds accounted for 68% of the company’s mutual fund sales in 2011.

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EBAY INC. $38 (Nasdaq symbol EBAY; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $49.4 billion; Price-to-sales ratio: 2.7; No dividends paid; TSINetwork Rating: Above Average; www.ebay.com) operates the world’s largest auction website, with over 99 million users. It also processes online financial transactions, mostly through its PayPal subsidiary.

In 2011, eBay’s revenue rose 27.3%, to $11.7 billion from $9.2 billion in 2010. Strong international growth pushed up PayPal’s revenue by 28.4%. eBay’s auction websites saw a 16.1% revenue gain.

PayPal continues to grow rapidly; the division now accounts for 38% of eBay’s total revenue.

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APPLE INC. $603 (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 932.4 million; Market cap: $562.2 billion; Price-to-sales ratio: 4.4; Dividend yield: 1.8%; TSINetwork Rating: Average; www.apple.com) is up about 50% since the start of 2012, mainly due to strong sales of its iPhone smartphones and iPad tablet computers.

The company now plans to reward its shareholders by returning some of its $97.6 billion, or $104.70 a share, in cash and investments (as of the end of 2011.)

In the fourth quarter of its current fiscal year, which ends September 30, 2012, Apple will start paying quarterly dividends of $2.65 a share; the annual rate of $10.60 yields 1.8%. Apple also plans to buy back $10 billion of its shares over the next three years.

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CINTAS CORP. $39 (Nasdaq symbol CTAS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 129.7 million; Market cap: $5.1 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.4%; TSINetwork Rating: Average; www.cintas.com) provides a wide range of products and services to over 900,000 businesses, mainly in North America.

The company gets 71% of its revenue from renting uniforms, which it makes and cleans at its own factories, and renting a wide variety of related products, such as mats, towels, mops and cleaning supplies. It gets a further 11% of its revenue by selling uniforms.

In the past few years, the company has branched out into new areas. For example, it now gets 10% of its revenue by providing first aid kits, fire extinguishers, sprinklers and emergency-exit lights to businesses. In addition, Cintas helps its clients comply with local safety regulations.

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This is another 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. Today he has stock trading advice relating to the dilemma investors may face if there appear to be questionable dealings among insiders of a stock they own. Specifically, he refers to Canadian engineering giant SNC-Lavalin and a mysterious payment that many suspect to be tied to its involvement in Libya. Below is the transcription of Pat’s comments. ...

Your best chance of getting rich is by putting your money in your own business. But this can be risky investment advice. Many new businesses wind up failing.

TELUS CORP. (Toronto symbols T and T.A; www.telus.com) gets most of its growth from wireless services. Its 7.3 million subscribers across Canada now supply 52% of its earnings. The remaining 48% of Telus’s earnings comes from its wireline division, which mainly consists of 3.6 million traditional phone customers in B.C., Alberta and eastern Quebec. This division also includes 1.3 million Internet users and 509,000 TV customers....

Pat McKeough responds to many personal questions on investing in stocks and other investment 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 each week, we offer you one of the highlights from these Q&A sessions. This past week, one member sought long-term advice on one of North America’s best-known big-box discount chains, which faces stiff competition in a race for retail revenue that has spread well beyond North America. ...

COMPUTER MODELLING GROUP $16.07 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 37.1 million; Market cap: $596.2 million; Dividend yield: 3.2%) sells consulting services and software that help oil and gas producers use advanced recovery techniques to get more out of their existing wells. The company has customers in over 50 countries.

In the three months ended December 31, 2011, Computer Modelling’s revenue rose 31.8%, to $15.9 million from $12.1 million a year earlier. Software licence sales rose 39.1%, while consulting and professional services revenue declined 12.1%, mainly because Computer Modelling consulted on some large one-time projects in the year-earlier quarter.

Earnings jumped 62.5%, to $5.8 million, or $0.16 a share, from $3.6 million, or $0.10 a share.

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PASON SYSTEMS $13.55 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 81.9 million; Market cap: $1.1 billion; Dividend yield: 3.0%) rents equipment for monitoring and managing oil and gas rigs. It also sells communication systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas producers and drilling contractors throughout Canada, the U.S., Mexico, Argentina and Australia.

In the three months ended December 31, 2011, Pason’s revenue rose 32.8%, to $97.6 million from $73.5 million a year earlier. Many of the company’s clients increased their drilling, especially for shale gas and oil.

Earnings jumped 201.2%, to $31.7 million, or $0.39 a share, from $10.5 million, or $0.13 a share. The increased drilling pushed up Pason’s earnings. It also let the company raise its prices.

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CALIAN TECHNOLOGIES $19.74 (Toronto symbol CTY; TSINetwork Rating: Speculative) (613-599-8600; www.calian.com; Shares outstanding: 7.6 million; Market cap: $150.0 million; Dividend yield: 5.3%) has acquired Primacy Management of Burlington, Ontario.

Since 2003, Primacy has been designing, building and managing in-store pharmacies for Loblaw. Primacy now operates 112 such clinics in Loblaw’s stores across Canada.

Primacy will add about $3 million a year to Calian’s revenue. To put that figure in perspective, Calian’s revenue was $56.8 million in the quarter ended December 31, 2011. Calian also expects the acquisition to immediately add to its earnings.

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FIRSTSERVICE CORP. $30.90 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.6 million; Market cap: $883.7 million; No dividends paid) serves the following areas of the real estate market: commercial real estate, residential property management and property improvement.

In the three months ended December 31, 2011, the company’s revenue rose 7.8%, to $594.9 million from $552.1 million a year earlier (all figures except share prices in U.S. dollars). Excluding one-time items, earnings per share rose 40.5%, to $0.52 from $0.37.

The company’s $316.4-million debt is a manageable 35.8% of its $883.7-million market cap.

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IAMGOLD $13.22 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 375.9 million; Market cap: $5.0 billion; Dividend yield: 1.5%) reports that its revenue rose 9.2% in the three months ended December 31, 2011, to $481.6 million from $440.9 million a year earlier, largely due to higher gold prices. Earnings per share rose 9.1%, to $0.36 from $0.33.

IAMGold now holds over $1.1 billion U.S. in cash and gold bullion. That gives it lots of options to spur its share price. For example, it could raise exploration spending, make an acquisition or buy back shares.

IAMGold is still a buy.

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VITERRA $14.65 (Toronto symbol VT; TSINetwork Rating: Average) (1-866-569-4411; www.viterra.ca; Shares outstanding: 371.7 million; Market cap: $5.4 billion; Dividend yield: 1.0%) is up almost 31% since the company said it has received expressions of interest from unnamed parties interested in taking it over.

The stock was our Pick of the Month in the last issue (March 2012) of Stock Pickers Digest. At the time, it was trading at $10.09. That’s a 45.2% gain in one month.

Our view is that the company is well positioned to benefit from an expected rise in Canadian and Australian crop yields in 2012, as well as the end of the Canadian Wheat Board’s monopoly on western Canadian wheat and barley sales. In addition, its Australian operations’ sales to Asia continue to rise.

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SHERRITT INTERNATIONAL $5.58 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com;
Shares outstanding: 296.7 million; Market cap: $1.7 billion; Dividend yield: 2.7%) reports that its revenue rose 10.6% in the three months ended December 31, 2011, to $536.8 million from $485.2 million a year earlier.

Despite the higher revenue, earnings fell 34.2%, to $28.1 million, or $0.10 a share, from $42.7 million, or $0.15 a share. However, without one-time items, such as a charge for the early redemption of debentures, Sherritt would have earned $0.19 in the latest quarter.

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TRILOGY ENERGY CORP. $27.33 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290-2900; www.trilogy.com; Shares outstanding: 90.5 million; Market cap: $2.5 billion; Dividend yield: 1.5%) owns oil and gas properties in the Kaybob and Grande Prairie areas of central Alberta. About 64% of Trilogy’s production is natural gas. The remaining 36% is oil.

In the three months ended December 31, 2011, Trilogy produced 28,288 barrels of oil equivalent per day (including natural gas), up 31.3% from 21,544 barrels a year earlier. The higher production pushed up the company’s cash flow per share by 75.9%, to $0.51 from $0.29.

Trilogy drilled 68 wells in 2011, with a 98.5% success rate. That pushed up the company’s production and boosted its reserves by 13%, to 88.6 million barrels from 78.2 million. That’s enough for over 11 years of production.

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ZARGON OIL & GAS $14.04 (Toronto symbol ZAR; TSINetwork Rating: Speculative) (403-264-9992; www.zargon.ca; Shares outstanding: 29.4 million; Market cap: $412.8 million; Dividend yield: 8.6%) produces natural gas and oil in Alberta, Manitoba, Saskatchewan and North Dakota. The company’s production is 61% oil and 39% natural gas.

In the three months ended December 31, 2011, Zargon produced 9,278 barrels of oil equivalent per day. That’s down slightly from 9.317 barrels a year earlier. However, that was mainly because the company sold some less important properties. Higher oil prices pushed up Zargon’s cash flow per share by 7.4%, to $0.58 from $0.54 a year earlier.

The company continues to successfully drill horizontal wells in the Alberta Plains North area. Horizontal drilling involves drilling development wells sideways or at an angle to reach isolated pockets of gas or to follow a reservoir spread out in a narrow layer. This method works well in places where conventional drilling is impossible or too expensive.

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AASTRA TECHNOLOGIES $21.04 (Toronto symbol AAH; TSINetwork Rating: Speculative) (905-760-4200; www.aastra.com; Shares outstanding: 14.0 million; Market cap: $294.6 million; Dividend yield: 3.8%) reports that its sales fell 7.1% in the latest quarter, to $199.7 million from $214.9 million a year earlier. Higher sales in Germany were offset by sales declines in Spain and North America.

Even so, earnings rose 13.5%, to $18.2 million, or $1.30 a share, from $16.0 million, or $1.14 a share. Aastra’s research expenses fell 17.9%, to $14.8 million from $18.0 million, As well, the company narrowed its foreign exchange loss to $1.3 million from $2.6 million a year earlier.

Aastra needs a sustained economic recovery in Europe to raise its sales and further push up its earnings. Still, the stock trades at just 12.0 times the $1.76 a share that the company should earn in 2011. The shares yield a high 3.8%.

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DOMINO’S PIZZA $39.60 (New York symbol DPZ; TSINetwork Rating: Average) (734-930-3030; www.dominos.com; Shares outstanding: 57.8 million; Market cap: $2.3 billion; No dividends paid) is the world’s largest chain of pizza stores that offer takeout and delivery. The company operates 9,742 outlets in the U.S. and over 70 in other countries. Franchisees run most of these stores.

In the three months ended January 1, 2012, Domino’s earnings per share rose 33.3%, to $0.52 from $0.39. The company paid more for food ingredients, but that was offset by lower costs for labour, rent and interest.

Sales rose 4.4%, to $501.7 million from $480.0 million. U.S. same-store sales jumped 6.8%. International same-store sales rose 4.7%.

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RUBY TUESDAY, INC. $7.97 (New York symbol RT; TSINetwork Rating: Speculative) (865-379-5700; www.rubytuesday.com; Shares outstanding: 63.8 million; Market cap: $508.5 million; No dividends paid) owns 742 casual dining restaurants in the U.S. Franchisees operate 43 outlets in the U.S. and 44 overseas.

In the three months ended November 30, 2011, Ruby Tuesday’s sales rose 5.9%, to $307.5 million from $290.5 million a year earlier. However, same-restaurant sales fell 4.2%, mostly due to stiff competition from other chains, many of which spent heavily on TV advertising.

Ruby Tuesday’s overall sales were helped by its new menu items and specials, including its lunch offer of soup, a salad bowl or garden bar, and garlic cheese biscuits starting at $5.99 to $6.99. Even so, the company lost $0.03 a share, compared to a profit of $0.07 a share a year earlier.

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DUNDEE REIT $36.80 (Toronto symbol D.UN; TSINetwork Rating: Speculative) (416-365-3535; www.dundeereit.com; Shares outstanding: 66.3 million; Market cap: $2.4 billion; Dividend yield: 6.0%) 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 December 31, 2011, Dundee’s revenue jumped 73.2%, to $136.3 million from $78.7 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 12.7%, to $0.62 from $0.55, due to more units outstanding (the trust issued new units to pay for the acquired properties).

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STANTEC INC. $30.90 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 45.5 million; Market cap: $1.4 billion; Dividend yield: 1.9%) sells a range of consulting, project delivery, design/build and technology services. The company’s clients operate in a wide variety of markets, including industry, environment, transportation and construction. Stantec has over 11,000 employees at 170 locations throughout North America. It also has four international offices.

In the three months ended December 31, 2011, the company’s revenue rose 12.6%, to $432.0 million from $383.7 million a year earlier. Acquisitions were part of the reason for the gains. Stantec is also working on a number of new projects. Before one-time items, earnings rose 4.3%, to $24.3 million, or $0.53 a share, from $23.3 million, or $0.51 a share.

Stantec continues to grow by acquisition. In 2011, it bought five companies. Together, these firms added 725 staff to Stantec’s workforce.

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GOODYEAR TIRE & RUBBER CO. $12.32 (New York symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 244.6 million; Market cap: $3.0 billion; No dividends paid) reports that its sales rose 12.0% in three months ended December 31, 2011, to a record $5.7 billion from $5.1 billion a year earlier.

The company earned $18 million, or $0.07 a share, compared with a loss of $177.0 million, or $0.73. Earnings benefited from the record sales and the company’s cost cuts, as well as a shift toward higher-priced tires.

Rising costs for raw materials, especially rubber, could limit Goodyear’s earnings growth in the near term. However, its long-term outlook is positive.

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INTUITIVE SURGICAL $528.20 (Nasdaq symbol ISRG; TSINetwork Rating: Average) (515-507-5000; www.intuitivesurgical.com; Shares outstanding: 39.3 million; Market cap: $20.8 billion; No dividends paid) makes the da Vinci, a computerized surgical system.

Guided by a miniature camera connected to a 3-D monitor, surgeons use the da Vinci to operate by remotely manipulating tiny robotic arms. This process is safer and much less invasive than regular surgery, and helps cut a patient’s recovery time and post-operative discomfort. It also reduces scarring and infection risk.

In the three months ended December 31, 2011, Intuitive earned $151.2 million, or $3.86 a share. That’s up 24.8% from $121.2 million, or $3.10 a share, a year earlier. Revenue rose 27.6%, to $496.8 million from $389.3 million. Intuitive is debt-free, and holds cash of $2.2 billion, or $55.98 a share.

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