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CANADIAN PACIFIC RAILWAY LTD. $61 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 169.4 million; Market cap: $10.3 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.cpr.ca) transports freight between Montreal and Vancouver. It also connects with major hubs in the U.S. Midwest and Northeast. In the three months ended March 31, 2011, CP’s earnings per share fell 66.7%, to $0.20 from $0.60 a year earlier. That’s mainly because a strike at Teck Resources Ltd. (Toronto symbol TCK.B) cut coal shipments (CP is Teck’s main railway). Bad winter weather in B.C. and a 28% jump in fuel prices also weighed on its earnings. CP’s revenue was unchanged at $1.2 billion. CP’s operating ratio worsened to 90.6% from 82.3% a year earlier. The company feels it can lower its operating ratio to around 70% in the next two to four years, mainly by increasing the speed and length of its trains. CP is also introducing new surcharges to help offset its higher fuel costs....

CANADIAN NATIONAL RAILWAY CO. $73 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 461.8 million; Market cap: $33.7 billion; Price-to-sales ratio: 4.1; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest freight-rail network, and serves 16 U.S. states. Microsoft co-founder Bill Gates is CN’s largest shareholder, with just over 10% of the shares. In the three months ended March 31, 2011, CN earned $668 million. That’s up 30.7% from $511 million a year earlier. The company spent $340 million on share buybacks in the latest quarter. Because of fewer shares outstanding, earnings per share rose 34.3%, to, $1.45 from $1.08. If you exclude one-time items in both quarters, mainly gains on sales of rail lines in southern Ontario, earnings per share would have risen 12.5%, to $0.90 from $0.80. Revenue rose 6.1%, to $2.1 billion from $2.0 billion....

C.R. Bard Inc, symbol BCR on New York, makes medical devices in four main areas: vascular products (28% of sales) such as stents and catheters; oncology products (27%) that detect and treat various types of cancer; urology products (26%) such as drainage and incontinence devices; and surgical tools (16%). Other medical products supply the remaining 3%. We analyze C.R. Bard in Wall Street Stock Forecaster, our newsletter for investing in the U.S. stock market. In the first quarter of 2011, Bard’s sales rose 7.6%, to $700.3 million from $650.8 million a year earlier. Earnings gained 9.1% to $131.9 million, or $1.49 per share. The stock market pick earned $121.2 million, or $1.24 a share, a year earlier....

Most investors are aware of the usual stock market investing risk factors, such as falling profits, dividend cuts, police investigations, etc. But it pays to stay alert for more subtle signs of coming problems. Here are 3 hints that a company could soon be facing big trouble. (How to spot hints of trouble in your stocks is just one of the strategies we cover in our free report, “Stock Market Investing Strategy: Pat McKeough’s Conservative Investing Guide for Making Money & Cutting Risk.” Click here to download your copy now.)

1. Strong reactions to outside criticism: When outsiders criticize a company’s accounting and the criticism is unjustified, most corporate insiders simply ignore it. But if insiders have something to hide, they may squawk loudly — that is, threaten to sue critics of their accounting practices, in hopes of shutting them up....

Cash Store Financial, symbol CSF on Toronto, operates 573 stores in Canada under two banners: Cash Store Financial and Instaloans. It also has six Cash Store outlets in the U.K. Both stores offer consumer payday loans (advances on upcoming paycheques). In the three months ended March 31, 2011, Cash Store earned $0.14 a share. That’s up 7.7% from $0.13 a share a year earlier. Revenue rose 15.7% in the latest quarter, to $47.2 million from $40.8 million, mainly because the company opened seven new branches in Canada and two new outlets in the U.K. Cash Store aims to increase its profitability by slowing its expansion, except in the U.K., where its stores’ profit margins are high. It is also offering a wider variety of bank accounts through an alliance with Calgary-based DirectCash Bank....

We agree with the widely held view that inflation is likely to be higher in the next few years than in the last few. However, we disagree with the fear that inflation will come roaring back and surpass the peaks it hit in the 1970s and 1980s. Investors who expect severe inflation are focusing on the U.S. Federal Reserve’s efforts to expand the money supply and speed up economic growth. Growth in the money supply creates the potential for rising prices throughout the economy. However, it takes something more to turn that potential into reality. Money-supply growth alone failed to spur inflation in Japan in the past couple of decades, for instance. That’s because Japanese banks were reluctant to make loans, and Japanese consumers were reluctant to borrow. Something like that could also happen here....

Aastra Technologies, symbol AAH on Toronto, develops and markets products and systems for accessing communication networks, including the Internet. Its technology is centered around business telephone systems, and includes products that integrate traditional and mobile phones. Aastra is one of the aggressive stock market picks we analyze in our Stock Pickers Digest newsletter. The company reports that its sales fell 4.9%, in the three months ended March 31, 2011, to $162.7 million from $171.1 million a year earlier. Earnings fell sharply, to $200,000, or $0.01 a share, from $4.1 million, or $0.29 a share, a year earlier....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice, including tips for lower-risk aggressive investing. 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: “What you need to know about ‘thin traders’” Many speculative stocks, including some of our recommendations in Stock Pickers Digest, our newsletter for aggressive investing, are inactive or “thin” traders. They trade a few hundred to a few thousand shares daily, compared to hundreds of thousands, if not several million, for a Canadian bank....

Wyndham Worldwide Corp., symbol WYN on New York, is the third-largest hotel company in the world with 7,190 franchised hotels. It operates under a number of brands, including Wyndham Hotels and Resorts, Ramada, Days Inn, Super 8, Wingate by Wyndham, Baymont Inn & Suites, Microtel Inns & Suites, Hawthorn Suites, Howard Johnson, Travelodge, Knights Inn and Ameri-host Inn. We analyze Wyndham in Stock Pickers Digest, our newsletter for stocks that are appropriate for your aggressive portfolio. In addition to hotels, Wyndham manages a number of vacation resorts, rental properties, luxury clubs and time-shares. The aggressive portfolio stock now has 97,000 vacation rental properties worldwide....

Some investors think by focusing our portfolio management strategy on stocks, and staying out of bonds and fixed-return investments, we’re missing out on bonds’ ability to lower portfolio volatility.

It’s true that bonds do tend to reduce your portfolio’s volatility, since they tend to rise when stock prices fall....

Verizon Communications Inc., symbol VZ on New York, owns 55% of Verizon Wireless, which is the largest wireless provider in the U.S.; U.K.-based Vodafone plc owns the other 45%. This business has 104 million customers in 50 states, and accounts for 63% of Verizon’s revenue. The remaining 37% comes from its wireline division, which sells local and long-distance telephone service to over 25 million customers in 28 states. The high dividend stock’s annual payout rate is $1.95 a share, for a yield of 5.2%. In the three months ended March 31, 2011, Verizon earned $0.51 per share, up 218.8% from $0.16 a year earlier. If you exclude costs related to the spinoff of a subsidiary and other unusual items in the year-earlier quarter, earnings per share would have risen 6.3%. Sales rose just 0.3%, to $27.0 billion from $26.9 billion a year earlier....

Today’s fast-changing technology offers huge opportunities in tech stocks. However, fast change also brings danger. Here are 4 risk factors you face when investing in tech stocks (below we look at 4 ways you can minimize these risks—and increase your profits).

1. Marketing is as hard as inventing: Even a great new product or computer program may fail to overcome retailer and customer skepticism.
2. A tech stock’s acquisitions can bring “time-bomb” risk: Companies sometimes grow quickly by buying other companies. But sellers may simply want out of a losing situation.
3. Major tech stocks also make mistakes: Junior tech stocks often trumpet their deals with major firms, such as Apple. Apple has vastly more knowledge and bargaining clout than any individual investor. But it still invests in products that fail.
4. High-tech shams are common: It’s easier to set up a company and sell stock to investors than to perfect a technological advance. Be especially wary when junior technology stocks splurge on elaborate web sites and glossy investor brochures.

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AT&T, symbol T on New York, was the exclusive U.S. carrier for the Apple iPhone, until Verizon started selling it in February. However, AT&T is rapidly upgrading its wireless networks, which should help it hang on to its current iPhone customers. Despite iPhone competition from Verizon, AT&T still activated nearly 3.6 million iPhones in the first quarter, with 23% of those being new customers for AT&T. In all, it sold 5.5 million smartphones in the quarter. Besides the iPhone, AT&T is benefiting from rising use of other wireless devices, such as the iPad and electronic-book readers. The company added 2 million wireless customers in the quarter, and now has 97.5 million....

You’ve likely noticed that the prices of many resources—and mining stocks—have risen sharply.

We think resource prices could well move even higher in the months and years ahead. In the near term, resource demand should rise as the Japanese government rebuilds the areas affected by the recent earthquake and tsunami.

Over the longer term, resource prices could soar as the global economy continues to recover. Moreover, fast-growing economies, like China and India, will continue to have a positive impact on resource prices.

Even so, the resource sector continues to be highly volatile, and investing in mining stocks has many hidden risks. In order to reap maximum profits—and avoid the pitfalls—you must know exactly which stocks to buy.

I’ve just written a new free special report to help you zero in on the mining stocks (including uranium stocks, metal stocks and junior mines) that are in the best position to take advantage of rising resource demand.

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Xerox Corp., symbol XRX on New York, makes copiers, laser printers and other publishing equipment. Xerox is one of the large cap stocks we analyze in our Wall Street Stock Forecaster newsletter. In February 2010, Xerox paid $6.5 billion for Affiliated Computer Services (ACS), which sells computer outsourcing services. Xerox now gets 80% of its revenue from long-term service contracts and recurring payments for supplies. That cut its risk....

During the election campaign, Prime Minister Stephen Harper promised to double the annual contribution limit for your tax-free savings account (TFSA) after the federal budget is balanced, which the government expects to do by 2015. (I recently wrote a special bulletin about how the election results could affect your investments. Click here to read this special bulletin and add your comments.) The federal government first made TFSAs available to investors in January 2009. Your TFSA lets you earn investment income — including interest, dividends and capital gains — tax free. You could contribute $5,000 in 2009 to start your tax free savings account....

Western Union, symbol WU on New York, provides money-transfer and foreign-exchange services in over 200 countries and territories. You can get our full stock market trading advice on Western Union in our Wall Street Stock Forecaster newsletter. In the 2011 first quarter, Western Union reported revenue of $1.3 billion. That’s up 4.1% from $1.2 billion in the comparable 2010 period....

ADOBE SYSTEMS INC. $34 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 504.5 million; Market cap: $17.2 billion; Price-to-sales ratio: 4.2; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) makes software that lets computer users create documents in the popular PDF format. It also makes software that lets graphic designers create print publications and web pages. In its 2011 first quarter, which ended March 4, 2011, Adobe earned $298.1 million. That’s up 40.8% from $211.7 million a year earlier. Earnings per share rose 45.0% to $0.58 from $0.40, on fewer shares outstanding. These figures exclude several unusual items, such as gains on investment sales and income-tax adjustments. Sales rose 19.7%, to a record $1.0 billion from $858.7 million. Sales rose across all of Adobe’s divisions except print and publishing, where sales fell 1.8%. The uncertain business environment in Japan following the earthquake and tsunami will probably cut Adobe’s second-quarter revenue by about $50 million. Japan is Adobe’s second-biggest source of revenue by country....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice. 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: “How your stock research can benefit from price-to-sales ratios.” We display a price-to-sales or p/s ratio with every stock we cover in our newsletters, including Wall Street Stock Forecaster, our newsletter for investing in U.S. stocks....

Chances are that the May 2 election results will lead to a period of investor-friendly legislation in Canada, with growth in the economy and a healthy Canadian stock market atmosphere. Just one example: with a Conservative majority in Parliament, for instance, we may soon see higher contribution limits for both RRSPs and Tax-Free Savings Accounts. Many Canadian stock market investors agree. Still, the Toronto market greeted the largely unexpected election result with a drop of more than 1%, even though the S&P 500 was down just 0.25% this morning. By the end of the day, Toronto was down 1.71%, while the U.S. S&P 500 was down 0.85%. My view is that this reflects a widely overlooked kinship between the Conservatives and the NDP. Both parties seem to favour small business over big, and big business carries a lot more weight than small on the TSX....

Chipotle Mexican Grill, symbol CMG on New York, is a Denver-based Mexican-restaurant chain. In the three months ended March 31, 2011, Chipotle’s revenue rose 24.3% to $509.4 million from $409.7 million a year earlier. The company’s restaurants attracted more customers during the quarter. That pushed up its same-restaurant sales by 12.4%. Chipotle also opened 12 new restaurants. It now has a total of 1,095 locations. Earnings rose 22.5%, to $46.4 million from $37.8 million. Earnings per share rose 24.2%, to $1.49 from $1.20, on fewer shares outstanding. The company holds cash of $282.9 million, or $9.10 a share, and has no debt....

YUM! BRANDS INC. $52 (New York symbol YUM Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 466.9 million; Market cap: $24.3 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.yum.com) operates 38,000 fast-food restaurants in over 110 countries. Its main banners include KFC (fried chicken), Pizza Hut and Taco Bell (Mexican food). It recently announced it will sell its Long John Silver’s (seafood) and its A&W (burgers) chains. Yum will soon make a formal offer to buy the 72.8% of Little Sheep Group Ltd. that it does not already own. This company operates 480 “hot pot” restaurants, mainly in China. Hot pot restaurants have special cooking pots at the centre of each table. Customers can serve themselves from the pots. Expanding in China is helping Yum offset slower growth in the U.S. In the first quarter of 2011, overall sales rose 3.4%, to $2.43 billion from $2.35 billion a year earlier. Excluding unusual items, earnings per share rose 6.8%, to $0.63 from $0.59....

Sherritt International Corp., symbol S on Toronto, is a diversified natural-resource company that produces nickel, cobalt, thermal coal, oil and gas. It also licenses its own mining technologies to other metals companies, and manages 376 megawatts of power-generation capacity in Cuba. In the three months ended March 31, 2011, the Canadian mining stock’s earnings jumped 116.3%, to $63.6 million, or $0.22 a share. A year earlier, it earned $29.4 million, or $0.10 a share. Revenue rose 29.5%, to $474.5 million from $366.4 million a year earlier. Higher prices for nickel, coal and oil were the main reasons for the improved results....

If you’ve been following our TSINetwork.ca Daily Updates, or subscribe to one or more of our newsletters and investment services, you’re likely familiar with our three-part investment advice. A key part of that advice is to invest mainly in well-established dividend-paying stocks. (The other two parts are to downplay stocks in the broker/media limelight and spread your money across the five main economic sectors: Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities.) With today’s low interest rates, investors are paying more attention to dividend yields (a company’s total annual dividends paid per share divided by the current stock price). Dividend paying stocks are responding by doing their best to maintain, or even increase, their payouts....

MCDONALD’S CORP. $78 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.0 billion; Market cap: $78.0 billion; Price-to-sales ratio: 3.3; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.mcdonalds.com) is the world’s largest fast-food restaurant chain by revenue. It has 32,800 restaurants that mainly serve hamburgers and french fries. Franchisees own 80% of these outlets. McDonald’s gets 65% of its sales from overseas. The company continues to profit from new menu items, such as breakfast oatmeal. As well, its premium coffees are helping it compete with Starbucks. In the quarter ended March 31, 2011, sales rose 8.9%, to $6.1 billion from $5.6 billion a year earlier. Overall same-store sales rose 3.6%. European same-store sales rose 4.9%, the U.S. rose 3.0% and the Asia-Pacific gained 0.5%. Earnings rose 10.9%, to $1.2 billion from $1.1 billion. Earnings per share rose 15.0%, to $1.15 from $1.00, on fewer shares outstanding....