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Carnival Corp. operate as a single business but have separate exchange listings. Stock market investments: Carnival increases earnings despite jump in fuel costs.

Investors often ask how we have managed to recommend so many stocks over the years that get taken over. One key is that we aim to recommend stocks with hidden assets — assets that attract less investor attention than they deserve. That gives buyers a bargain. It also attracts takeover bids....

Stock investing tips: How one investment “rule” could kill your profits. The value of investor rules or sayings may be psychological rather than financial.

CANADIAN NATIONAL RAILWAY CO. (Toronto symbol CNR; www.cn.ca) operates the largest freight rail network in Canada. It also serves 16 U.S. states. Ottawa nationalized CNR in 1918 because of the vital role the company played in Canada’s early growth. CNR became a publicly traded company in 1995. The company is upgrading its Alberta rail networks to take advantage of expanding oil sands development. These investments are helping drillers in remote areas without pipelines ship their heavy oil to refineries and other destinations....

RUSSEL METALS $22.09 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 67.0 million; Market cap: $1.5 billion; Dividend yield: 5.4%) is one of North America’s largest metal distributors. The company serves its roughly 30,000 customers through a network of 50 locations in Canada and 12 in the U.S.

In the three months ended June 30, 2011, Russel’s earnings per share rose sharply, to $0.43 from $0.14 a year earlier. Revenue rose 21.1%, to $705.4 million from $582.5 million.

Revenue rose at all three of Russel’s divisions: The steel distribution division’s revenue rose 19% due to higher sales volumes and steel prices. Metal services revenue rose 24%, also on higher sales volumes and prices. The energy tubular products division, which supplies pipes for oil and gas companies, saw its revenue rise 19% on higher drilling activity.

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TOROMONT INDUSTRIES LTD. $20.01 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 77.2 million; Market cap: $1.5 billion; Dividend yield: 2.2%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. Toromont also makes refrigeration systems through its CIMCO division.

In July 2011, Toromont completed the spinoff of Enerflex Ltd.. Shareholders received shares of the new Toromont and shares of Enerflex. That company leases and sells equipment and services for natural gas production, including field production plants and compression and processing plants.

In the three months ended September 30, 2011, higher equipment sales and rentals pushed up Toromont’s revenue by 9.3%, to $367.3 million from $336.0 million a year earlier. Without one-time items, earnings per share rose 33.3% to $0.40 from $0.30, on the higher revenue and improved profit margins.

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EUROPEAN GOLDFIELDS $12.16 (Toronto symbol EGU; TSINetwork Rating: Speculative) (44 (20) 7408 9534; www.egoldfields.com; Shares outstanding: 183.8 million; Market cap: $2.2 billion; No dividends paid) is up over 20% since early December. The rise came after the company confirmed that unnamed potential buyers have approached it about a takeover.

Eldorado Gold, symbol ELD on Toronto, and Centerra Gold, symbol CG on Toronto, are rumoured to be interested parties.

We’ve said for some time that European Goldfields could become a takeover target as its new mines move toward production. That’s even more of a possibility now, after its recent financing deal with Qatar Holdings LLC, a division of Qatar’s sovereign wealth fund, to develop its mines in Greece and Romania. These mines should let the company produce around 400,000 ounces of gold a year by 2014.

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SYMANTEC $15.39 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 751.0 million; Market cap: $11.6 billion; No dividends paid) has agreed to sell its 49% stake in Huawei Symantec Technologies for $350 million. This joint venture sells computer security and data-storage products to businesses, mainly in China. The buyer is Symantec’s partner, Hong Kong-based Huawei Technologies Co.

The joint venture has lost money since it was formed in 2008, so selling it will make Symantec more profitable.

Symantec is a buy.

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INTACT FINANCIAL $58.23 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 109.4 million; Market cap: $6.2 billion; Dividend yield: 2.5%) recently completed its purchase of AXA Canada from Paris-based ASX Group for $2.6 billion.

Intact plans to look for more casualty and property insurers to buy in Canada. That includes other subsidiaries of European insurers, many of which are struggling. Intact estimates that as much as 30% of the Canadian market is controlled by foreign insurers.

The company may aim to expand internationally, but it will remain cautious and likely won’t seriously look for opportunities overseas until late next year at the earliest.

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CAMECO CORP. $17.79 (Toronto symbol CCO; TSINetwork Rating: Extra Risk) (306-956-6200; www.cameco.com; Shares outstanding: 390.0 million; Market cap: $6.9 billion; Dividend yield 2.3%) has dropped its hostile takeover bid for Hathor Exploration (symbol HAT on Toronto). However, Cameco could still profit from Hathor’s uranium properties (see below).

Hathor’s main exploration properties, including its Midwest Northeast property, are on the east side of the Athabasca Basin. This region contains all of Canada’s producing uranium mines and accounts for 23% of global production.

Cameco holds cash of $1.2 billion, or $3.30 a share, so it can afford to make acquisitions that enhance its growth prospects. However, it dropped its Hathor bid because it felt the price had risen too high.

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LEON’S FURNITURE LTD. $12.53 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding:
72.3 million; Market cap: $905.9 million; Dividend yield: 3.2%) saw its sales fall 4.3% in the latest quarter, to $174.4 million from $182.1 million a year earlier. Weaker consumer spending and a drop in new-housing starts held back sales. Earnings per share fell 4.0%, to $0.24 from $0.25.

Leon’s plans to speed up its expansion by opening roughly five new stores a year over the next five years. It is also renovating many of its existing stores.

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DOREL INDUSTRIES $24.54 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com;Shares outstanding: 32.6 million; Market cap: $800.0 million; Dividend yield: 2.4%) makes a wide range of products, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; home furnishings, and recreational products, including bicycles. It has 4,700 employees and plants in 19 countries.

In the three months ended September 30, 2011, Dorel’s sales rose 1.1%, to $575.8 million from $569.5 million a year earlier (all figures except share price in U.S. dollars). The recreational/leisure division’s sales rose 21.6%, mainly on strong demand for bicycles. That offset lower sales at the other divisions.

Still, earnings per share fell 24.7%, to $0.71 from $0.93 a year earlier, mostly due to rising shipping and raw-material costs. The company didn’t pass on all of these price increases to its customers due to continuing economic weakness in the U.S. and Europe.

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IMPERIAL METALS $12.30 (Toronto symbol III; TSINetwork Rating: Speculative) (604-669-8959; www.imperialmetals.com; Shares outstanding: 74.9 million; Market cap: $921.3 million) has split its shares on a two-for-one basis. That should make the shares more liquid and help the company attract more investors.

Meanwhile, Imperial’s cash flow per share rose 17.8% in the nine months ended September 30, 2011, to $0.86 from $0.73 (adjusted for the two-for-one split).

The company aims to use the cash flow from its Mount Polley and Huckleberry mines in B.C. to build a mine at its Red Chris copper/gold property in northwestern B.C.

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ZARGON OIL & GAS $12.58 (Toronto symbol ZAR; TSINetwork Rating: Speculative) (403-264-9992; www.zargon.ca; Shares outstanding: 29.2 million; Market cap: $367.3 million; Dividend yield: 9.5%) produces natural gas and oil in Alberta, Manitoba, Saskatchewan and North Dakota. Its production is 60% oil and 40% gas.

In the three months ended September 30, 2011, Zargon produced 9,014 barrels of oil equivalent per day. That’s down 10.7% from 10,094 barrels a year earlier. The company sold some less-important properties; that was the main reason for the drop. The lower production pushed down Zargon’s cash flow per share by 27.5%, to $0.50 from $0.69 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. Horizontal drilling works well in places where conventional drilling is impossible or too expensive.

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BIRCHCLIFF ENERGY $13.24 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Units outstanding: 131.4 million; Market cap: $1.7 billion; No dividends paid) develops, produces and explores for oil and natural gas, mainly in the Peace River Arch area near the Alberta/B.C. border. About 75% of Birchcliff’s production is natural gas. The remaining 25% is oil.

In the three months ended September 30, 2011, Birchcliff’s production jumped 34.6%, to 17,648 barrels of oil equivalent per day (including natural gas) from 13,109 barrels a year earlier.

Cash flow per share rose 50.0%, to $0.27 from $0.18. The production increase and higher oil prices were the main reasons for the gain.

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COMPUTER MODELLING GROUP $15.32 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403- 531-1300; www.cmgroup.com; Shares outstanding: 37.8 million; Market cap: $579.1 million; Dividend yield: 2.9%) reports that its revenue fell 10.1% in the three months ended September 30, 2011, to $12.0 million from $13.3 million a year earlier.

Licence revenue rose to $10.9 million from $10.8 million, but that was offset by a 57.0% drop in consulting and professional-services revenue, to $1.1 million from $2.5 million. The company consulted on a few large, one-time projects a year ago. Earnings per share fell 7.7%, to $0.12 from $0.13.

Already a leader in complex heavy-oil and oil-sands simulations, Computer Modelling should profit as oil and gas producers continue to develop other unconventional sources, such as shale gas.

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MAJOR DRILLING $15.32 (Toronto symbol MDI; TSINetwork Rating: Speculative) (www.majordrilling.com; 1-866-264-3986; Shares outstanding: 74.9 million; Market cap: $1.1 billion; Dividend yield: 1.0%) is a large contract drilling firm that mainly serves the mining industry.

In the three months ended October 31, 2011, Major’s revenue rose 67.3%, to $213.9 million from $127.8 million a year earlier. Earnings per share jumped 168.8%, to $0.43 from $0.16.

During the quarter, many of Major’s customers increased their drilling activity to take advantage of record gold prices and high base metal prices. Gold mining firms supply 48% of Major’s revenue, followed by base-metal and uranium miners (35%) and energy, coal and groundwater test drillers (17%).

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PASON SYSTEMS $11.74 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 82.3 million; Market cap: $966.2 million; Dividend yield: 3.4%) 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 and Argentina.

In the three months ended September 30, 2011, Pason’s revenue rose 29.2%, to $88.7 million from $68.7 million a year earlier. Many of the company’s clients increased their drilling, especially for shale gas and oil.

Earnings jumped 140.0%, to $28.5 million, or $0.35 a share, from $11.9 million, or $0.15 a share. The increased drilling pushed up Pason’s earnings. Strong demand also let the company raise its prices.

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AMERIGO RESOURCES $0.50 (Toronto symbol ARG; TSINetwork Rating: Speculative) (604-681-2802; www.amerigoresources.com; Shares outstanding: 172.3 million; Market cap: $86.2 million; No divd.) processes copper and molybdenum from the waste rock from Chile’s El Teniente, the world’s largest copper mine.

In the three months ended September 30, 2011, Amerigo’s cash flow was $0.03 a share, down from $0.06 a year earlier. However, that was the result of a strike that is now over.

Amerigo has just declared its semi-annual dividend of $0.02 a share. That gives the stock a high 8.0% yield. The dividend appears safe, but a prolonged period of low copper prices could lower the cash the company has available for dividend payments.

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NEW GOLD $10.11 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 456.5 million; Market cap: $4.6 billion; No dividends paid) has three operating mines: the Mesquite mine in the U.S., the Cerro San Pedro mine in Mexico and the Peak mine in Australia. It also owns 30% of the El Morro copper/gold project in Chile (Goldcorp owns the other 70%) and 100% of the New Afton gold/copper/silver project in B.C.

El Morro contains an estimated 4.7 million ounces of gold and 3.7 billion pounds of copper. New Afton holds 2.7 million ounces of gold, 2.5 billion pounds of copper and 8.3 million ounces of silver.

In June 2010, New Gold bought Richfield Ventures (symbol RVC on Toronto) for $550 million of New Gold shares (all figures except share price and market cap in U.S. dollars).

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YAMANA GOLD $14.52 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 746.2 million; Market cap: $10.8 billion; Dividend yield: 1.3%) owns seven operating gold mines in Mexico, Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina, and has three other properties in advanced stages of development.

In the three months ended September 30, 2011, Yamana’s revenue rose 22.3%, to $555.2 million from $454.0 million a year earlier (all figures except share price and market cap in U.S. dollars). Cash flow per share rose 57.1%, to $0.44 from $0.28.

The company raised its production by 4.4% during the quarter, to 279,274 ounces of gold from 267,409 a year earlier. As well, record-high gold prices pushed up Yamana’s selling price for gold by 37.4%.

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MART RESOURCES $0.76 (Toronto symbol MMT; TSINetwork Rating: Speculative) (403-270-1841; www.martresources.com; Shares outstanding: 340.3 million; Market cap: $258.6 million; No dividends paid) trades at a low multiple to cash flow. That reflects investor concern about unstable Nigeria.

Right now, Mart is producing oil from its 50%-held Umusadege field in southern Nigeria.

In the three months ended September 30, 2011, Mart’s revenue jumped 237.2%, to $46.8 million from $13.9 million a year earlier. Cash flow per share rose sharply, to $0.125 from $0.028. Mart’s production rose 126.5%, to 446,981 barrels, and oil prices rose.

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ENERFLEX LTD., $12.12 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 77.2 million; Market cap: 935.7 million; Dividend yield: 2.0%) rents and sells equipment and services for natural gas production, including compression and processing plants, refrigeration equipment and power generators. In July 2011, Toromont completed its spinoff of Enerflex. Shareholders received shares of Enerflex and the new Toromont.

In the three months ended September 30, 2011, Enerflex’s revenue rose 4.2%, to $282.3 million from $270.9 million a year earlier. The company gets about 28% of its revenue from stable, recurring sales of parts and services. Without one-time items, earnings per share jumped to $0.22 from $0.06, thanks to the higher revenue and improved profit margins. Enerflex’s long-term debt of $132.9 million is a low 14.2% of its market cap

Enerflex’s order backlog continues to grow. It added $314.6 million of orders in the latest quarter, to bring its total backlog to $833.2 million on September 30, 2011, up 62.9% from $511.4 million a year earlier. Enerflex benefited from rising shale gas production in the southern U.S., including the Eagle Ford and Marcellus shale areas.

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Pat McKeough responds to many personal questions on 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 every Friday, we offer you one of the highlights from these Q&A sessions. A question this week touched on the well-established trend of overseas outsourcing. Specifically, an Inner Circle member asked about a leading specialist in the field with rising sales and profits and a large store of cash. ...

Today, we discuss three fairly common errors we remind our readers of from time to time. Almost all investors make one or more of these mistakes sooner or later.