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SHERRITT INTERNATIONAL $6.36 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 296.4 million; Market cap: $1.9 billion; Dividend yield: 2.4%) 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 September 30, 2011, Sherritt’s earnings jumped 102.2%, to $45.5 million, or $0.15 a share. A year earlier, it earned $22.5 million, or $0.07 a share. Revenue rose 13.0%, to $466.4 million from $412.7 million. Higher coal and oil prices were the main reasons for the improved results.

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AASTRA TECHNOLOGIES $15.82 (Toronto symbol AAH; TSINetwork Rating: Speculative) (905-760-4200; www.aastra.com; Shares outstanding: 14.1 million; Market cap: $223.1 million; Dividend yield: 5.1%) sells products and systems that let businesses access communication networks, including the Internet.

In the three months ended September 30, 2011, Aastra’s sales fell 2.6%, to $156.6 million from $160.7 million a year earlier. Higher sales in Germany were offset by lower sales in Spain and North America.

The company earned $0.12 a share, up sharply from $0.01 a share, mainly on lower research costs and foreign-exchange losses. Aastra holds cash of $118.5 million, or a high $8.34 a share, and has no long-term debt.

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ACI WORLDWIDE $29.96 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-334-5101; www.tsainc.com; Shares outstanding: 34.3 million; Market cap: $1.0 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.

ACI recently bought S1 Corp. for $540 million in cash and stock. This acquisition looks like a good fit: S1 sells transaction software for banks, credit unions, retailers and other processors. It has over 3,000 clients worldwide.

In the three months ended September 30, 2011, ACI’s revenue rose 15.6%, to $112.1 million from $97.0 million a year earlier. Earnings rose sharply, to $10.5 million, or $0.31 a share, from $2.3 million, or $0.07 a share. The company holds cash of $170.8 million, or $4.98 a share.

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SYMANTEC CORP. $16.55 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 751.0 million; Market cap: $12.4 billion; No dividends paid) makes computer-security 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 September 30, 2011, Symantec’s earnings rose 33.8%, to $182 million from $136 million a year earlier. Earnings per share jumped 41.2%, to $0.24 from $0.17, on fewer shares outstanding. If you exclude unusual items, mainly asset writedowns and restructuring costs, earnings per share would have risen 14.7%, to $0.39 from $0.34. That matched the consensus earnings estimate.

Sales rose 13.6%, to $1.7 billion from $1.5 billion. The company gets 52% of its sales from overseas. If you disregard the positive impact of exchange rates, sales would have risen 9% in the latest quarter.

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WESTJET AIRLINES $11.55 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com;
Shares outstanding: 139.4 million; Market cap: $1.6 billion; Dividend yield: 1.7%) was our “#1 Stock of the Year” for 2010 and 2011.

WestJet’s revenue rose 3.3% in the three months ended September 30, 2011, to $775.3 million from $684.1 million a year earlier. Demand for the company’s flights remained strong.

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ALIMENTATION COUCHE-TARD $30.55 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard.com; Shares outstanding: 179.4 million; Market cap: $5.5 billion; Yield: 1.0%) is the largest convenience-store operator in Canada, with 2,000 outlets. It also has over 3,700 U.S. stores. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. The company sells fuel at 72% of its stores.

Couche-Tard’s revenue continues to rise rapidly. Revenue jumped 86.7% between 2006 and 2010, to $19.0 billion from $10.2 billion (all figures except share price and market cap in U.S. dollars). Much of the rise comes from a steady stream of acquisitions. But the company was also able to boost profits with those acquisitions. Earnings per share jumped 106.2% over the same five years, to $2.00 from $0.97. Revenue will likely reach almost $24 billion this year.

Couche-Tard’s earnings per share rose 6.9% in the three months ended October 9, 2011, to $0.62 from $0.58. Sales rose 24.1% to $5.2 billion from $4.1 billion. The gains came from a rise in fuel prices, the stronger Canadian dollar and higher merchandise sales.

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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, one Inner Circle member asked for an assessment of a company that at times has been one of Canada’s most impressive growth stocks, but has also seen some sharp declines in its shares, as it did in December. Q: Pat: I currently hold a significant portfolio position of Gildan Activewear. At current levels, does Gildan look attractive? Any views? Thanks in advance....

From time to time, investors ask whether they should buy stocks “on margin.” That is, whether they should borrow money from their brokers to buy securities. This is a respectable investing strategy, but it carries more than the usual amount of risk. The main cost involved with buying on margin is the interest on the money you borrow. Plus, when you sell a security that you’ve bought on margin, you must first pay back the loan from your broker....

Many experienced investors begin their stock research by looking at ratios such as a company’s debt-to-equity ratio. This ratio comes in several

In the Canadian stock market, strong sustainable dividend yields are usually associated with financial stocks and utilities, not necessarily with industrial stocks that depend more heavily on the overall health of the economy. Yet today we cover one Canadian industrial stock that raised its dividend payment by almost 10% in September and maintains an attractive yield....

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. REITs continue to be popular among investors seeking income. Recently, an Inner Circle member asked about a REIT that specializes in big-box outdoor malls and features North America’s most famous big-box chain as its most important tenant. ...

Everyone’s heard the song “The 12 Days of Christmas.” Since we’re in the midst of that season, it seems like an appropriate time to review “The 7 Wonders of the Investment World.” The difference is that the effect of these 7 “wonders” lasts a lot longer than 12 days....

As the post-Christmas shopping season opens, we look at one of the most interesting growth stocks in the retail industry. This stock began by allowing shoppers to buy and sell items from the comfort of their home computers, but it has since aggressively added to the array of online transactions it handles. EBAY INC. (Nasdaq symbol EBAY; www.ebay.com) operates the world’s largest online auction website, with over 99 million users in 39 countries. The company charges users fees to list and sell their goods through its websites....

CENOVUS ENERGY INC. $34 (www.cenovus.com) reported that its cash flow per share rose 54.4% in the third quarter of 2011, to $1.05 from $0.68 a year earlier. A 9.6% increase in oil prices was the main reason for the gain....

CAE INC. $10 (www.cae.com) continues to benefit as airlines upgrade their fleets. It recently received an order from Emirates Airlines for two flight simulators. The $34-million value of this contract is equal to 2% of CAE’s annual revenue of $1.7 billion....

ROYAL BANK OF CANADA $50 (www.rbc.com) reported record earnings for fiscal 2011 due to strong growth at its Canadian banking, wealth management and insurance divisions. That’s helping it offset slower growth at its securities-trading operations....

ANDREW PELLER LTD. $9.08 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $135.3 million; Price-to-sales ratio: 0.5; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.andrewpeller.com) has formed a joint venture with the winery owned by hockey star Wayne Gretzky. Peller feels it can use its marketing and distribution expertise to increase sales of Gretzky wines in Canada.

Meanwhile, Peller’s sales rose 1.4% in the three months ended September 30, 2011, to $70.0 million from $69.0 million a year earlier. That’s mainly because it is seeing strong demand for its new products and its more-profitable premium brands. Peller earned $3.4 million, or $0.24 a share, up 80.7% from $1.9 million, or $0.13 a share, a year earlier quarter. If you exclude gains on hedging contracts that the company uses to lock in foreignexchange rates, earnings would have risen 8.4%.

Andrew Peller is a buy.

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THE WESTAIM CORP. $0.53 (Toronto symbol WED, Aggressive Growth Portfolio, Finance sector; Shares outstanding: 581.2 million; Market cap: $308.0 million; Price-to-sales ratio: 0.9; No dividends paid; TSINetwork Rating: Speculative; www.westaim.com) owns Jevco Insurance Co., which sells insurance to high-risk drivers and owners of motorcycles and recreational vehicles.

Westaim earned $11.3 million, or $0.02 a share, in the third quarter of 2011. That’s down 48.5% from $22.0 million, or $0.03 a share, a year earlier. The year-earlier quarter benefited from an unusual tax gain. Premium revenue rose 5.5%, to $88.3 million from $83.6 million. However, Jevco’s focus on high-risk drivers adds risk.

Westaim is a hold, but only for highly aggressive investors.

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IGM FINANCIAL INC. $45 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 257.5 million; Market cap: $11.6 billion; Price-to-sales ratio: 4.2; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.igmfinancial.com) reported that on November 30, 2011, it had $120.2 billion of assets under management. That’s down 4.3% from $125.6 billion a year earlier.

The company’s clients sold more investments in response to recent stock-market volatility, and share prices were lower than a year ago; these were main reasons 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.

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METRO INC. $53 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 100.7 million; Market cap: $5.3 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.metro.ca) plans to simplify its share structure. Right now, the supermarket operator has two classes of shares: 100.1 million class A subordinate-voting shares (one vote per share) and 577,440 class B multiplevoting shares (16 votes per share). Metro plans to convert the class B shares into class A shares on a one-for-one basis. After that, it will convert the class A shares into a single class of common shares.

Metro aims to complete this changeover in early 2012, following shareholder approval. Some pension plans and other institutions avoid companies with two share classes, so this move should make Metro more appealing to these investors.

Metro is a buy.

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RIOCAN REAL ESTATE INVESTMENT TRUST $25 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 263.4 million; Market cap: $6.6 billion; Price-to-sales ratio: 5.0; Dividend yield: 5.5%; TSINetwork Rating: Average; www.riocan.com) has purchased 80% of the Alamo Ranch shopping mall in San Antonio, Texas. Inland Western Retail REIT owns the remaining 20%.

This is RioCan’s first acquisition in San Antonio. The mall is 88% occupied, and has well-known anchor tenants, such as Target. These factors cut the risk of expanding into unfamiliar markets.

RioCan is a buy.

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AGRIUM INC. $73 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 158.0 million; Market cap: $11.5 billion; Price-to-sales ratio: 0.8; Dividend yield: 0.1%; TSINetwork Rating: Average; www.agrium.com) makes fertilizers from natural gas. It sells its products to farmers and industrial users through its more than 1,200 stores in North America, South America and Australia. The company’s retail outlets cut its reliance on volatile fertilizer prices.

Agrium also owns 26% of a fertilizer plant in Egypt; the Egyptian government owns the rest. This plant recently suspended operations due to growing civil unrest in the country. However, this plant supplied just 2% of Agrium’s 2010 earnings, so there would be little impact if Agrium is forced to write down the value of this asset.

Meanwhile, Agrium’s earnings soared to $293 million, or $1.85 a share, in the third quarter of 2011, up from $61 million, or $0.39 a share, a year earlier (all amounts expect share price and market cap in U.S. dollars). That mainly reflects its December 2010 purchase of 300 stores in Australia. Sales rose 52.0%, to $3.1 billion from $2.1 billion.

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POTASH CORP. OF SASKATCHEWAN $44 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 856.5 million; Market cap: $37.7 billion; Price-to-sales ratio: 4.2; Dividend yield: 0.6%; TSINetwork Rating: Average; www.potashcorp.com) is a leading producer of potash, phosphate and nitrogen for use in fertilizers. Most of the company’s mines are in Saskatchewan, which has the world’s largest potash deposits.

The company sold 2.2 million tonnes of potash in the three months ended September 30, 2011. That’s up 13.7% from 1.9 million tonnes a year earlier. The average potash price rose 47.4%, to $451 a tonne from $306 (all amounts expect share price and market cap in U.S. dollars).

As a result, Potash Corp.’s earnings jumped 140.8% in the quarter, to $826 million from $343 million. Earnings per share rose 147.4%, to $0.94 from $0.38, on fewer shares outstanding. Sales increased 47.4%, to $2.3 billion from $1.6 billion.

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PRECISION DRILLING CORP. $11 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 276.1 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.7; No dividends paid since February 2009; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract-drilling services to land-based oil and gas producers in Canada, the U.S. and Mexico.

The company continues to see strong demand for its Super Series horizontal-drilling rigs. Horizontal drilling involves drilling development wells sideways or at an angle to reach isolated pockets of oil or gas. Horizontal drilling works well in situations where conventional drilling is either impossible or too expensive.

Precision is now building 49 Super Series rigs, up from its earlier plan to build 30. It will also decommission 49 of its older rigs. Retiring the older rigs will cost Precision between $100 million and $120 million.

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MOLSON COORS CANADA INC. (Toronto symbols TPX.A $41 and TPX.B $42; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 181.1 million; Market cap: $7.4 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.1%; TSINetwork Rating: Average; www.molsoncoors.com) reports that its sales rose 9.1% in the three months ended September 24, 2011, to $954.4 million from $875.0 million a year earlier (all amounts except share prices and market cap in U.S. dollars). That’s mainly due to favourable foreign currency rates and higher beer sales overseas.

However, higher ingredient prices and lower sales in North America and the U.K. cut earnings by 11.2%, to $212.4 million, or $1.14 a share, from $239.1 million, or $1.28 a share.

The company continues to cut its costs as a result of MillerCoors, its joint venture in the U.S. with rival brewer SABMiller. Combined with savings from its own plan, Molson Coors cut its expenses by $29 million in the latest quarter.

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