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ARC RESOURCES $25.52 (Toronto symbol ARX; Shares outstanding: 287.6 million; Market cap: $7.3 billion; TSINetwork Rating: Speculative; Dividend yield: 4.7%; www.arcresources.com) produces oil and gas in western Canada. Its average daily production of 85,178 barrels of oil equivalent is weighted 67% to gas and 33% to oil.

In the three months ended September 30, 2011, ARC’s cash flow per share rose 17.5%, to $0.74 from $0.63. That’s because the company raised its production. It also benefited from higher oil prices.

ARC converted from a trust to a corporation on January 1, 2011, in response to Ottawa’s income-trust tax. However, ARC has $2.2 billion of tax pools that are letting it offset the tax and maintain its $0.10 monthly payout (it now yields 4.7%).

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BCE INC. $42.28 (Toronto symbol BCE; Shares outstanding: 778.2 million; Market cap: $32.9 billion; TSINetwork Rating: Above Average; Dividend yield: 5.1%; www.bce.ca) is teaming up with Rogers Communications to buy 75% of Maple Leaf Sports and Entertainment (MLSE).

This is the private company that owns the Toronto Maple Leafs (hockey), Toronto Raptors (basketball) and Toronto FC (soccer). MLSE also owns the Air Canada Centre arena in Toronto.

BCE will pay a total of $533 million for 37.5% of MLSE.

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IMPERIAL OIL $46.03 (Toronto symbol IMO; Shares outstanding: 850.5 million; Market cap: $39.1 billion; TSINetwork Rating: Average; Dividend yield: 1.0%; www.imperialoil.ca) is a major integrated-oil company that gets most of its production from its oil sands projects in Alberta. Imperial also has conventional oil and natural-gas operations in western Canada, and it holds interests in offshore projects in Atlantic Canada.

In the three months ended September 30, 2011, Imperial’s earnings jumped 105.5%, to $859 million, or $1.01 a share. A year earlier, it earned $418 million, or $0.49 a share. Imperial increased its oil sands production and benefited from rising oil prices and improved refinery profits. Revenue rose 35.8%, to $7.9 billion from $5.9 billion.

Imperial’s production is set to keep rising thanks to its new oil sands operations, including the $10.9-billion Kearl project, which is more than 80% complete. Imperial owns 71% of Kearl. ExxonMobil Corp. (New York symbol XOM) owns the remaining 29%. Exxon also holds a 69.6% interest in Imperial.

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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, the subject of tech stocks came up as one Inner Circle member asked about a company that makes software that is vitally important for computers and mobile devices, but also faces a highly competitive market....

SARA LEE CORP. $18 (New York symbol SLE; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 590.7 million; Market cap: $10.6 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.saralee.com) announced in January 2011 that it would break itself into two separate, publicly traded companies. One firm will consist of Sara Lee’s international coffee and tea businesses. The other will focus on its North American packaged meat operations. The company aims to complete the breakup by the end of fiscal 2012 (fiscal years end June 30). It will also pay a special dividend of $3.00 a share before the split....

Many people in the investment industry promote asset allocation funds as a simple and profitable way to assemble a diversified portfolio of stocks, bonds and cash equivalents. But as is so often the case, the product rarely lives up to the hype....

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, in this case showing you how we judge winning 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 TSI Network ratings system to pick the right stocks: Part 2”...

LINAMAR CORP. $15 (www.linamar.com) earned $0.39 a share in the third quarter of 2011, up 44.4% from $0.27 a share a year earlier. These figures exclude costs to integrate Linamar’s recent purchase of three French plants that make cylinder heads, gears and other parts for European carmakers....

SNC-LAVALIN GROUP INC. $54 (www.snclavalin.com) has won a contract to design a plant to process bitumen from the MacKay River oil sands project in northern Alberta. The company didn’t reveal how much the contract is worth, but it should enhance SNC’s reputation in this fast-growing area....

AGRIUM INC. $76 (www.agrium.com) has raised its dividend for the first time since 1996. The new semi-annual payout of $0.225 U.S. a share, up 309.1% from $0.055 U.S., has an annualized yield of 0.6%. The company should also continue to benefit from rising crop and livestock prices, which give farmers more money to spend on seeds, fertilizers and other products that Agrium sells in its retail outlets....

MANITOBA TELECOM SERVICES INC. $30 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 65.7 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 5.7%; TSINetwork Rating: Average; www.mtsallstream.com) has 1.3 million telephone and wireless customers in Manitoba. This business now accounts for 55% of the company’s revenue. The remaining 45% comes from its Allstream division, which provides integrated telephone, Internet and other communication services to businesses across Canada.

Revenue fell from $1.9 billion in 2006 to $1.8 billion in 2010, largely because the Allstream division lost a big client. Strong competition from cable companies has also hurt demand for the company’s traditional phone services.

Earnings rose 17.9%, from $2.57 a share (or a total of $174.9 million) in 2006 to $3.03 a share (or $195.8 million) in 2008. Earnings then fell 33.3%, to $2.02 a share (or $130.5 million) in 2010.

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TORSTAR CORP. $9.43 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.2 million; Market cap: $746.9 million; Price-to-sales ratio: 0.5; Dividend yield: 5.3%; TSINetwork Rating: Above Average; www.torstar.com) has agreed to buy 25% of privately held Blue Ant Media Inc., which owns three specialty TV channels that focus on music, comedy and travel.

Blue Ant is also in the process of buying High Fidelity HDTV Inc., which owns four high-definition specialty channels, including Oasis HD (nature programming) and HIFI (music and arts programming).

Blue Ant’s purchase of High Fidelity requires regulatory approval. After the deal closes, Torstar will invest $22.7 million in Blue Ant. To put that in context, Torstar earned $25.2 million, or $0.32 a share, in the three months ended September 30, 2011.

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THOMSON REUTERS CORP. $28 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 827.5 million; Market cap: $23.2 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has suspended its plan to sell its health-care business, which sells data and software that helps hospitals, clinics and medical professionals lower their costs and cut fraud. This division supplies 3% of Thomson Reuters’ total revenue.

The company put the health-care division up for sale in June 2011, but there was limited interest due to uncertainty over the global economy. Holding onto it until conditions improve makes sense.

Thomson Reuters is a buy.

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CANADIAN TIRE CORP. $65 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.4 million; Market cap: $5.3 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.canadiantire.ca) faces strong competition from U.S.-based department store operator Target, which plans to open around 135 stores in Canada in 2013.

The company’s experience competing with big U.S. retailers, like Wal-Mart and Home Depot, will help it prepare for Target. As well, Canadian Tire has recently added to its automotive products and services. That will give it an edge over Target, which will focus more on clothing and household goods.

Canadian Tire is a buy.

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FINNING INTERNATIONAL INC. $23 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.6 million; Market cap: $3.9 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.finning.com) saw its sales jump 26% in the first nine months of 2011. That’s because higher commodity prices spurred demand for heavy equipment, such as bulldozers and trucks, from oil-exploration and mining companies.

However, Finning expects its 2012 sales to rise by just 5%, as slower growth in China and India could dampen resource prices. However, based on its strong order backlog, the company expects its sales to rise by 10% in both 2013 and 2014. As well, Finning expects its earnings to rise faster than its sales as it continues to expand its repair and service businesses. In the third quarter of 2011, Finning got 39% of its revenue from selling product-support services.

Finning is a buy.

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BANK OF MONTREAL $58 (Toronto symbol BMO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 639.0 million; Market cap: $37.1 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.bmo.com) currently pays quarterly dividends of $0.70 a share.

The bank will now let shareholders reinvest their dividends in additional shares at a 2% discount to the market price. Previously, it did not offer a discount. As well, shareholders can buy up to $40,000 of additional common shares at the market price directly from the bank each year.

Bank of Montreal is a buy.

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EMERA INC. $33 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 122.2 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.1%; TSINetwork Rating: Average; www.emera.com) gets most of its revenue from Nova Scotia Power Inc., which is Nova Scotia’s main electricity supplier. The rest comes from its investments in pipelines, power plants and wind-power projects in the U.S. and Caribbean.

The company is using its steady cash flow to invest in new projects that will spur its long-term growth. The biggest is a joint venture with the Newfoundland government to transmit power from a proposed hydroelectric plant at Muskrat Falls on Labrador’s Churchill River to Newfoundland. Emera will pay $600 million for 29% of this business.

Emera will also spend $1.2 billion to build an undersea cable which will transmit 20% of the Muskrat Falls plant’s power to Nova Scotia. Emera will own 100% of this cable. The entire project should begin operating around 2016.

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TRANSCONTINENTAL INC. $13 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 81.0 million; Market cap: $1.1 billion; Price-to-sales ratio: 0.5; Dividend yield: 4.2%; TSINetwork Rating: Average; www.tctranscontinental.com) is the largest commercial printer in Canada and the fourth-largest in North America. It also publishes newspapers and magazines.

Transcontinental also has over 1,000 websites, which supply 16% of its total revenue. These websites will become more important to its growth in the next few years as advertisers spend more on the Internet than print products.

The company recently swapped its printing plants in Mexico for six facilities in Canada. If you exclude the contribution from the Mexican plants and other unusual items, such as goodwill writedowns, Transcontinental earned $161.7 million, or $2.00 a share, in its 2011 fiscal year (which ended October 31, 2011). That’s up 3.7% from $155.9 million, or $1.93 a share, in fiscal 2010. Sales rose 0.8%, to $2.04 billion from $2.03 billion.

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CAE INC. $10 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 257.6 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.cae.com) earned $38.4 million in the quarter ended September 30, 2011. That’s down 1.8% from $39.1 million a year earlier. Earnings per share were unchanged at $0.15 on more shares outstanding.

If you exclude costs to integrate Medical Education Technologies, Inc. (METI), which CAE recently purchased for $130 million U.S., CAE would have earned $41.1 million, or $0.16 a share, in the latest quarter. METI makes medical simulators and other products for training paramedics and medical students.

Revenue rose 11.7%, to $433.5 million from $388.0 million. METI contributed $7.1 million to the increase. In addition, demand for CAE’s flight simulators and pilot-training services continues to rise as airlines replace their aging planes with newer models.

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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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