Search

General Electric Co., New York symbol GE, plans to buy back all of the preferred shares it sold to Berkshire Hathaway Inc. (New York symbol BRK.B), the holding company controlled by billionaire investor Warren Buffett. GE sold these shares to Berkshire during the 2008-2009 financial crisis. The cash from the sale helped stabilize GE’s finance division. The company will pay $3.3 billion to buy back these shares. That’s nearly equal to the $3.5 billion, or $0.33 a share, that GE earned in the three months ended June 30, 2011. However, this purchase will save the company $300 million a year in dividend payments....

As investors near retirement, many advisors tend to recommend that they move an ever larger part of their investments from stocks to bonds and other fixed-return investments. Bonds can provide steady income and a guarantee to repay the principal at maturity. However, they could cost you returns in the long run....

RuggedCom Inc., symbol RCM on Toronto, makes computer-networking equipment that is used in harsh environments. The company recently announced that it has teamed up with ABB Ltd. (symbol ABB on New York) to win a new contract from the Eastern Nebraska Public Power District Consortium. We cover ABB in our Wall Street Stock Forecaster newsletter. Terms of the agreement were not disclosed. Under the deal, the partners will supply communications equipment for the consortium’s smart grid project. This technology will let the consortium better monitor customer outages, and cut the time required to restore services over a 1,000-square-mile area. ...

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network....

Nordion Inc., Toronto symbol NDN, sells isotopes for cancer detection and research. It also makes products that sterilize food and surgical tools. In its fiscal 2011 third quarter, ended July 31, 2011, Nordion’s revenue rose 39.5%, to $66.8 million from $47.9 million a year earlier (all amounts in U.S. dollars). Isotope sales jumped 79.9%, mainly because the Chalk River nuclear reactor near Ottawa restarted in August 2010 after a 15-month shutdown; this reactor supplies most of Nordion’s isotopes. The company’s sterilization equipment continues to sell well. Nordion is also seeing strong demand for TheraSphere, a process it developed that treats liver cancer using millions of small glass beads that contain radioactive materials. Regulators in Canada, Europe, the Middle East and parts of Asia have already approved TheraSphere. This treatment will soon begin Phase III clinical trials in the U.S....

Over the past decade, political upheaval around the world has caused many to worry about secure sources of energy supply. Some North American energy stocks have simply decided that overseas risk is not worth the trouble and expense. Devon Energy Corp., (New York symbol DVN; www.devonenergy.com) is one of them....

McGraw-Hill Companies Inc., New York symbol MHP, rose 17% the week of September 12 after it announced that it will split into two separate, publicly traded companies. One of these new firms, McGraw-Hill Markets, will sell a variety of financial-information products. This business will include Standard & Poor’s, which provides credit ratings on bonds, and McGraw-Hill’s J.D. Power market-research firm. McGraw-Hill Markets will have annual revenue of $4 billion. International sales will account for 40% of that total. The other company, McGraw-Hill Education, will publish textbooks for schools and colleges. This business will have $2.4 billion of annual revenue....

P/e ratios (the ratio of a stock’s price to its per-share earnings) are published regularly in newspapers and on the Internet. These financial ratios are widely followed, and are an important part of many investors’ decision making. Typically, you calculate p/e’s using a stock’s current price and its earnings for the previous 12 months. The general rule is that the lower a stock’s p/e, the better. And a p/e of less than, say, 10, represents excellent value. A low p/e implies more profit for every dollar you invest....

Canadian Stock WestJet Airlines Ltd., symbol WJA on Toronto, reported that its load factor rose to 83.3% in August 2011 from 82.2% in August 2010.

Could I have your opinion on Thompson Creek Metals? There is a lot of enthusiasm in B.C., but the market does not seem to share the same optimism.

Encana Corp., Toronto symbol ECA, has agreed to sell its midstream operations in Colorado’s Piceance basin. These operations mainly consist of pipelines that collect natural gas from nearby wells and transport it to storage and processing facilities. Encana will hang to its gas wells in this region. The company will receive $590 million when the deal closes later this year (all amounts in U.S. dollars). To put this figure in context, this natural gas stock’s cash flow was $2.0 billion, or $2.77 a share, in the first half of 2011. This sale will help Encana reach its goal of selling $1 billion to $2 billion worth of non-core assets by the end of 2011. That will let the company focus on its main gas-producing properties in Alberta, B.C., Wyoming, Colorado and Louisiana. The cash from these sales will also let Encana keep paying quarterly dividends of $0.20 U.S. a share, for an annualized yield of 3.5%....

When you need tax advice, business associates and friends can be a valuable source of ideas and referrals. However, non-professionals can be mistaken or out of date in their tax knowledge, no matter how confident they seem. This is also true of some semi-professionals—tax preparers, bookkeepers, insurance agents and so on. Court rulings or tax-department crackdowns can close tax loopholes. People sometimes get away with borderline tax maneuvers for lengthy periods, only because the tax authorities never take a close look at their affairs. But the more money you have, the more likely it is that your affairs will one day get a close look from someone at the tax department....

Major Drilling, symbol MDI on Toronto, is a large contract-drilling firm that mainly serves the mining industry. In the three months ended July 31, 2011, Major’s revenue rose 49.9%, to $164.2 million from $109.5 million a year earlier. Earnings per share jumped 257.1%, to $0.25 from $0.13. 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 environmental drillers (17%)....

Shares of large companies generally rebounded well after a market crisis. Investors refer to these companies as large cap stocks.

Campbell Soup Co., New York symbol CPB, is one of the most recognizable brands in the world. It is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices. In the year ended July 31, 2011, Campbell’s earnings fell 4.6%, to $805 million from $844 million a year earlier. Earnings per share were unchanged at $2.42 on fewer shares outstanding. If you exclude one-time charges related to a restructuring plan and charges related to the U.S. health-care law, earnings per share would have risen 2.8%, to $2.54 from $2.47. On this basis, the latest earnings beat the consensus earnings estimate of $2.49 a share. ...

Demand for medical devices and supplies will undoubtedly continue to grow as the population ages. Even in an uncertain economic climate, our stock market advice is that this is a positive trend for the industry, but only for the best companies making these devices. C.R. Bard Inc. (New York symbol BCR; www.crbard.com) makes medical devices in four main areas: vascular products, such as stents and catheters (28% of 2010 sales); oncology products that detect and treat various types of cancer (27%); urology products, such as drainage and incontinence devices (26%); and surgical tools (16%). Other medical products supply the remaining 3%....

Transcontinental Inc., Toronto symbol TCL.A, is the largest commercial printer in Canada, and the fourth largest in North America. It also publishes newspapers and magazines, and has over 1,000 web sites. In the three months ended July 31, 2011, Transcontinental’s revenue rose 2.3%, to $492.6 million from $481.3 million a year earlier. The company has won a number of new printing contracts, including an expanded deal to print The Globe and Mail. The company recently swapped its printing operations in Mexico for six printing plants in Canada. If you exclude the contributions from the Mexican plants and other unusual items, the company earned $32.8 million or $0.40 a share. That fell short of the consensus estimate of $0.45 a share. The latest earnings are also down 1.8% from $33.4 million, or $0.41 a share, a year earlier. The strong Canadian dollar hurt the contribution from Transcontinental’s international operations; that was the main reason for the lower earnings....

Some investors follow a “sector rotation” approach to investing. That’s when you try to hop from sector to sector, underweighting or

Alimentation Couche-Tard, symbol ATD.B on Toronto, is the largest convenience-store operator in Canada, with over 2,000 outlets. It is also one of the Canadian investments with the biggest presence in the U.S., at nearly 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. Last month, Couche-Tard announced that it has agreed to buy 33 On the Run convenience stores in southern Louisiana from ExxonMobil (symbol XOM on New York) for an undisclosed amount. Couche-Tard will buy the land and buildings for 27 of these locations and will assume or enter into leases for the six remaining sites. According to the company, these stores are all highly visible and are located on well-travelled roads....

We receive many different questions from members of our Inner Circle service looking for a good stock market investment. This luxury retailer is using its strong brand image to increase sales in Asia. However, increasing manufacturing costs could put a squeeze on profit margins. Q: Dear Pat: What is your opinion of Coach Inc.? Thanks! A: Coach Inc., (symbol COH on New York; www.coach.com) designs and sells a wide range of accessories for men and women, including handbags, belts, wallets, card cases, shoes, luggage and jewellery. The company designs these products, but they are made by third-party manufacturers, mainly in Asia....

Bank of Nova Scotia, Toronto symbol BNS, continues to benefit from its growing banking operations in the Caribbean, Latin America, South America and Asia. Last week, Bank of Nova Scotia agreed to buy 19.99% of the Bank of Guangzhou; the Chinese government owns the remaining 80.01%. This bank is the 29th largest in China, with 84 branches. Bank of Nova Scotia will pay $719 million when the deal closes in December 2011. To put that in context, it earned $1.2 billion, or $1.11 a share, in the three months ended July 31, 2011....

Whether you’re a new or experienced investor, professional investment advice can boost your returns. A company’s earnings are different from an employee’s salary. Earnings are indefinite and subject to revision, even years later. Companies have to estimate many costs, and make yearly write-offs against earnings, according to arbitrary rules. Here’s some investment advice to pay special attention to when examining a company’s earnings statement:...

Patent production continues to be a crucial issue for major drug companies. The expiration of a patent and the entry of a key drug into the public domain is a challenge for those U.S. stocks in the pharmaceutical industry hat have prospered thanks to the sales of a popular drug. Pfizer Inc., New York symbol PFE, makes Lipitor, a leading cholesterol drug. However, the U.S. patent for Lipitor expired in June 2011. That will let rival drug makers sell cheaper, generic versions of this drug. Even so, Pfizer has several new promising drugs in its pipeline, including Eliquis, a new anti-stroke drug that Pfizer developed along with another well-known U.S. pharmaceutical firm, Bristol-Meyers Squibb Co. (New York symbol BMY)....

Every Wednesday, we publish our “Investor Toolkit” investing advice series. Whether you’re a new or experienced investor, these weekly updates are designed to give you our specific advice on successful investing. Each Investor Toolkit update gives you a fundamental piece of investing advice and shows you how you can put it into practice right away. Tip of the week:“It can be profitable to pay a little more for your shares.” Some Canadian companies, such as Bombardier and Teck Resources, have two classes of common shares: voting and non-voting (or multiple voting and subordinate voting)....

Cameco Corp., symbol CCO on Toronto, has launched a hostile takeover bid for Hathor Exploration (symbol HAT on Toronto). Cameco is offering $520 million, or $3.75 a share, for this uranium exploration company. Hathor’s main exploration properties are on the east side of the Athabasca Basin. This region in northern Saskatchewan and Alberta contains all of Canada’s producing uranium mines, and accounts for 23% of the global production of uranium. Right now, Hathor is exploring for uranium at its Midwest Northeast project, which is close to producing properties that are currently owned by Cameco and AREVA of France....