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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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SAPUTO INC. $39 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 200.6 million; Market cap: $7.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.9%; TSINetwork Rating: Average; www.saputo.com) earned $127.1 million in its 2012 second quarter, which ended September 30, 2011. That’s up 1.0% from $125.8 million a year earlier. Earnings per share rose 1.7%, to $0.61 from $0.60, on fewer shares outstanding.

Sales rose 15.5%, to $1.8 billion from $1.55 billion. That mainly reflects the contribution of DCI Cheese Co. Inc., which Saputo bought for $270.5 million in March 2011. DCI distributes specialty cheeses in the U.S. However, Saputo’s Canadian sales volumes are falling. As well, new regulations will force the company to use more full-fat milk in its Canadian cheese products instead of milk solids. That will increase its costs.

Saputo is a hold.

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LINAMAR CORP. $15 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.7 million; Market cap: $970.5 million; Price-to-sales ratio: 0.4; Dividend yield: 2.1%; TSINetwork Rating: Extra Risk; www.linamar.com) makes transmission and driveline systems for carmakers in North America, Europe and Asia. Its other products include engines and self-propelled, scissor-type elevating work platforms, which it sells under the Skyjack name.

The company continues to benefit from the recovery of the global auto industry. Linamar also bought three plants in France for $30.1 million in February 2011. These plants supply cylinder heads, gears and other parts to French carmakers Renault and Peugeot.

In the three months ended September 30, 2011, Linamar’s sales rose 30.4%, to $725.6 million from $556.3 million a year earlier. Sales at the powertrain/ driveline division (which accounted for 88% of overall sales) rose 38.6%. Sales at the industrial products division (12% of sales) jumped 123.3%.

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SHAWCOR LTD. $29 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.6 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.1%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that protect oil and natural gas pipelines from corrosion. It also makes industrial equipment, such as electrical wire and protective sheaths.

The company’s expertise and strong reputation are helping it win new contracts. For example, it recently won a $400-million U.S. deal to provide coatings and other services to a natural gas pipeline in the Ichthys gas field off the northern coast of Australia.

The company will also provide coatings for a 300-kilometre pipeline that pumps natural gas from fields off the coast of western Australia to the Wheatstone liquefied natural gas facility. This contract is worth $170 million U.S. In addition, Shaw- Cor recently announced a $45 million U.S. deal to coat a pipeline in the Arabian Gulf.

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FINNING INTERNATIONAL INC. $24 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.6 million; Market cap: $4.1 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.finning.com) sells, rents and repairs tractors, bulldozers, trucks and other heavy equipment made by Caterpillar Inc. Finning’s major customers are mainly in the western Canadian mining, forest products and construction industries. The company also operates in the U.K. and South America.

Finning has been installing a new computer system that will make its Canadian operations more efficient. However, it has had difficulty implementing this new system. That has delayed parts shipments to its customers.

As a result of these problems and a five-week strike at the company’s B.C. operations, earnings fell 44.1% in the three months ended September 30, 2011, to $35.4 million, or $0.21 a share. A year earlier, it earned $63.4 million, or $0.37 a share. However, revenue rose 10.2%, to $1.3 billion from $1.2 billion. Demand for new equipment was strong, especially from mining companies.

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SNC-LAVALIN GROUP INC. $50 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 150.8 million; Market cap: $7.5 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.7%; TSINetwork Rating: Average; www.snclavalin.com) is a leading Canadian engineering and construction company. It specializes in large-scale public-works projects, such as roads, bridges, transit systems and water-treatment plants.

SNC recently bought the 23.08% of AltaLink L.P. that it did not already own. The company now owns 100% of AltaLink, which provides electricity to 85% of Alberta’s population through 12,000 kilometres of power lines and 270 substations.

AltaLink’s long-term outlook is bright, partly because new power lines will have to be built to power Alberta’s expanding oil sands projects. In addition, AltaLink’s expertise should help the company compete for new power-infrastructure projects in other provinces.

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BANK OF NOVA SCOTIA $49 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $53.9 billion; Price-to-sales ratio: 2.0; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.scotiabank.com) remains our top pick among Canada’s big five banks. That’s mainly because it continues to expand in fast-growing regions like Latin America, South America and Asia. Its international banking division accounts for 26% of its earnings.

In the year ended October 31, 2011, the bank earned $5.3 billion. That’s up 21.4% from $4.3 billion in 2010. Earnings per share rose 18.2%, to $4.62 from $3.91, on more shares outstanding. Revenue rose 11.5%, to a record $17.3 billion from $15.5 billion. Strong gains at its international and wealth-management operations offset slower growth at its Canadian banking and securities-trading divisions.

Earnings in 2012 should rise to $4.82 a share. The stock trades at just 10.2 times that figure. The $2.08 dividend yields 4.2%. The bank paid out 44% of its earnings as dividends in fiscal 2011, which was within its target of 40% to 50%. That gives it room to raise the dividend in fiscal 2012.

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ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $61 and ACO.Y [class II voting] $60; Income Portfolio, Utilities sector; Shares outstanding: 58.2 million; Market cap: $3.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.atco.com) is a holding company. Its main subsidiary is 52.7%-owned Canadian Utilities (see page 1).

ATCO has four main divisions: Utilities (which distributes electricity and natural gas); Energy (which operates power plants); its Australian business (which operates power plants and distributes natural gas in Australia); and Structures & Logistics (which serves construction companies and firms that explore for oil and natural gas). ATCO owns 75.5% of the Structures & Logistics division; Canadian Utilities owns the remaining 24.5%.

The company also owns several smaller businesses. For example, ATCO I-Tek manages computer networks, billing and payment processing for a wide variety of businesses. Another subsidiary, ASHCOR Technologies Ltd., makes fly ash from the residue from ATCO’s coal-fired power plants. Adding fly ash to cement makes it more durable.

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CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $60 and CU.X [class B voting] $61; Income Portfolio, Utilities sector; Shares outstanding: 127.6 million; Market cap: $7.7 billion; Price-to-sales ratio: 2.6; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta. It also operates 19 power plants in Canada, Australia and the U.K. ATCO Ltd. (see page 2) owns 52.7% of the company.

Canadian Utilities’ revenue fell 1.0%, from $2.43 billion in 2006 to $2.40 billion in 2007, but rose 15.6%, to $2.8 billion, in 2008. Lower power rates in Alberta cut revenue by 7.0%, to $2.6 billion, in 2009. However, revenue rose 2.8% in 2010, to $2.7 billion, because the company started up a new power plant in Australia. Earnings rose 37.6%, from $320.5 million, or $2.54 a share, in 2006 to $440.9 million, or $3.50 a share, in 2010.

Canadian Utilities continues to expand in Australia. In July 2011, it paid $1.1 billion for Western Australia Gas Networks, which distributes natural gas to over 620,000 customers in the city of Perth. The company’s Australian operations now supply 8% of its revenue and 10% of its earnings.

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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 update on a pipeline firm that sometimes appears to be overshadowed by the most prominent names in the industry like TransCanada and Enbridge. Here is Pat’s reply. ...

There is one very important question we get from investors on a regular basis. How often should they sell investments they own and buy new ones? Our answer never varies. Do it as rarely as possible. That’s because turnover in your portfolio cuts into your profits. You face three costs every time you buy and sell a stock:...

Stock options come in two varieties. Calls give you a right, but not the obligation, to buy a stock at a fixed price, for a fixed period.

Yesterday we discussed the shale revolution. (View the post: Why the shale revolution will make oil price shocks a thing of the past.) The production of natural gas and oil from shale is rising rapidly in North America. This angers some environmentalists, even as it creates jobs and tax revenues at a time of economic uncertainty. More than that, oil production from shale – which will contribute much more to oil reserves than most people realize – is due to alter the balance of supply and demand in international energy. As we begin to depend less on despotic regimes around the world and more on localized, stable energy stocks, it will keep oil prices in check, to the greater benefit of the economy as a whole....

TUPPERWARE BRANDS CORP. $62 (New York symbol TUP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 57.4 million; Market cap: $3.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) was our Stock of the Year for 2011.

Like IBM, Tupperware continues to see strong demand for its products, particularly in fast-growing countries like Brazil, Indonesia and Turkey. These markets now supply 63% of the company’s sales.

Also like IBM, Tupperware continues to aggressively repurchase its shares. Buybacks raise earnings per share and other per-share calculations, and give the remaining shareholders a larger stake in the company.

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EBAY INC. $30 (Nasdaq symbol EBAY; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $39.0 billion; Price-to-sales ratio: 3.6; No dividends paid; TSINetwork Rating: Above Average; 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.

The company also operates several other websites, including StubHub (live event ticket sales), Shopping.com (comparison shopping) and Rent.com (apartment and house rentals).

In all, these websites account for 55% of eBay’s overall revenue. The company gets a further 35% of its revenue by processing online financial transactions, mostly through its PayPal subsidiary.

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YUM! BRANDS INC. $58 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 460.5 million; Market cap: $26.7 billion; Price-to-sales ratio: 2.2; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.yum.com) continues to expand in China, which now accounts for half of the company’s sales and earnings.

Yum now plans to double its fast-food outlets in China to 9,000 by 2020. The company will focus its expansion on smaller cities, which usually have lower labour and rental costs than larger centres. That should make these new outlets more profitable.

Yum Brands is a buy.

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PROCTER & GAMBLE CO. $65 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.8 billion; Market cap: $182.0 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.pg.com) plans to appeal a $305-million fine by French anti-trust regulators, which accused the company of collaborating with rival firms to set the price of laundry detergent between 1997 and 2004.

The company is appealing because it has already agreed to pay $275 million to settle a similar case with the European Commission. To put these figures in context, Procter earned $3.0 billion, or $1.03 a share, in the three months ended September 30, 2011.

Procter & Gamble is still a buy.

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SHERWIN-WILLIAMS CO. $84 (New York symbol SHW; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 103.8 million; Market cap: $8.7 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.sherwinwilliams.com) recently raised its prices to offset the rising cost of oil (Sherwin needs oil to make its paints). That’s partly why its sales rose 14.4% in the quarter ended September 30, 2011, to $2.5 billion from $2.2 billion a year earlier. Recent acquisitions have also fuelled its growth.

However, it will take several months for Sherwin to realize the full benefits of its higher selling prices. Meanwhile, it continues to integrate its recent purchases. As a result, earnings rose a slower pace of 2.6%, to $179.9 million, or $1.71 a share. A year earlier, it earned $175.3 million, or $1.60 a share.

Sherwin recently settled a tax dispute with the IRS. As a result, it will incur a one-time charge of $75.0 million, or $0.72 a share, in the fourth quarter of 2011.

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WINDSTREAM CORP. $12 (Nasdaq symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 515.8 million; Market cap: $6.2 billion; Price-to-sales ratio: 1.5; Dividend yield: 8.3%; TSINetwork Rating: Average; www.windstream.com) has completed its purchase of PAETEC Holding Corp., which sells telecommunication services to businesses in 46 states. Windstream paid $891 million in stock and assumed $1.4 billion of PAETEC’s debt. That gives the deal a total value of $2.3 billion.

This is the latest in a series of acquisitions for Windstream. Its recent purchases pushed up its revenue by 6.0% in the third quarter of 2011, to $1.0 billion from $965.8 million a year earlier. However, the costs of integrating these new operations cut its earnings by 16.1%, to $71.5 million, or $0.14 a share, from $85.2 million, or $0.18 a share.

As a result of the PAETEC purchase, Windstream will now get 70% of its revenue from selling highspeed Internet and business services. That cuts its reliance on its slow-growing home phone business. As well, the company can use PAETEC’s losses to lower its tax bill over the next five years. That should let its keep paying quarterly dividends of $0.25 a share, for an 8.3% annualized yield.

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CHEVRON CORP. $100 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.0 billion; Market cap: $200.0 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.chevron.com) plans to spend $32.7 billion on capital upgrades in 2012. That’s up 25.8% from the $26.0 billion it will probably spend in 2011.

About 87% of the 2012 spending will go toward oil and gas exploration and upgrades of existing projects and new developments. For example, Chevron’s new liquefied natural gas plants in Australia will increase its daily production by 13% by 2016.

Chevron is a buy.

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MOLSON COORS BREWING CO. $42 (New York symbol TAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 181.1 million; Market cap: $7.6 billion; Price-to-sales ratio: 2.3; Dividend yield: 3.0%; TSINetwork Rating: Average; www.molsoncoors.com) is the world’s fifth-largest brewer by volume.

The company continues to realize savings from the June 2008 merger of its operations in the U.S. with those of rival brewer SABMiller to form MillerCoors.

Including its share of the savings from MillerCoors, Molson Coors cut its overall costs by $29 million in the quarter ended September 24, 2011. However, those savings were offset by rising ingredient costs, which pushed down earnings by 11.2%, to $212.4 million, or $1.14 a share. A year earlier, Molson Coors earned $239.1 million, or $1.28 a share.

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PEPSICO INC. $64 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $102.4 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.pepsico.com) is the world’s second-largest soft-drink maker after Coca-Cola. It also makes other products, such as Frito-Lay snack foods, Tropicana fruit juices and Quaker Oats.

PepsiCo recently raised its selling prices in response to rising ingredient costs. That’s the main reason why its sales rose 13.3% in the quarter ended September 3, 2011, to $17.6 billion from $15.5 billion a year earlier. In June 2011, PepsiCo paid $3.8 billion for Wimm-Bill-Dann, Russia’s largest dairy and juice company. This accounted for a third of the sales gain. Without unusual items, mainly costs to integrate recent acquisitions, earnings per share rose rose 7.4%, to $1.31 from $1.22.

PepsiCo continues to expand internationally. In November 2011, it paid an undisclosed sum for privately held Grupo Mabel, Brazil’s second-largest maker of cookies, crackers and snack foods. This business complements the foods that PepsiCo already sells in Brazil, including Frito-Lay chips (sold under the Elma Chips brand) and Quaker Oats snacks.

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