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Birchcliff Energy Inc., symbol BIR on Toronto, develops, produces and explores for natural gas and oil, mainly in the Peace River Arch area near the Alberta/B.C. border. In the three months ended June 30, 2011, the natural gas stock’s production rose 40.2% in the three months ended June 30, 2011, to 17,324 barrels of oil equivalent per day (including natural gas) from 12,357 barrels a year earlier. We analyze Birchcliff in Stock Pickers Digest, our newsletter that recommends stocks for the part of your portfolio you devote to aggressive investing....

Lower consumer confidence and higher gas prices are cutting U.S. store traffic. So, successful retailers will need to have a well-established niche and quality name-brand merchandise to attract customers. We also think it’s important, when investing in stocks in the retail industry, to focus on chains that can adapt quickly and prosper in the ever-changing economic landscape. In the latest issue of Wall Street Stock Forecaster, we updated our advice on one consumer stock that has a dominant position in its market. PetSmart Inc. (Nasdaq symbol PETM) is the biggest pet-supply chain in the U.S. In all, it operates 1,197 pet stores in the U.S. and Canada. It also has 185 in-store PetsHotels, which look after pets while their owners are away....

BHP Billiton Ltd. ADRs, New York symbol BHP, is the world’s largest mining company, with major operations in Australia, South Africa, Chile and the U.K. It produces iron ore, coal, oil, aluminum, manganese, diamonds and titanium. BHP is one of the blue chip mining stocks we analyze in our Wall Street Stock Forecaster newsletter. In the fiscal year ended June 30, 2011, BHP earned $21.7 billion, or $7.87 per ADR (each American Depositary Receipt represents two BHP common shares). That’s up 73.9% from $12.5 billion, or $4.48 per ADR, in fiscal 2010. Even so, the latest earnings missed the consensus forecast of $7.16 per ADR. Revenue rose 35.9%, to $71.7 billion from $52.8 billion....

When investors develop and act on strong investment views—on subjects such as the outlook for oil prices, say, or gold prices, or interest rates—they generally lose money overall. That’s because strong views on subjects like these tend to distort your investment decisions. For instance, if you know (or think you know) that oil is sure to rise in the next six months or a year, say, then you are sure to invest more heavily in oil stocks than you would if you took a less extreme—that is, more balanced—view of the situation. You will also tend to invest in riskier oil stocks, rather than proven producers....

Precision Drilling Corp., Toronto symbol PD, provides contract-drilling services to oil and gas producers. The company owns 360 drilling rigs in Canada, the U.S. and Mexico. We analyze Precision in The Successful Investor, our newsletter that recommends stock picks for conservative investors. Precision recently converted from an income trust to a regular corporation. Investors received one common share for each trust unit they held. The change was in response to Ottawa’s new tax on income-trust distributions, which came into effect on January 1, 2011....

The research we do for members of our Inner Circle service turns up many intriguing stories on growth stocks, often in the ultra-competitive high-tech world. Here’s a question about the prospects of Sirius XM Radio (symbol SIRI on Nasdaq) from our latest weekly Inner Circle Q&A, in which I answer questions from our members. Sirius has a big customer base, but it’s not that easy to outdistance the competition. In our search for growth stocks, we look for a strong market position. And if Sirius can hold its current position, it will fit our profile for growth stocks. But that’s not guaranteed. ...

Dorel Industries, symbol DII.B on Toronto, makes a wide range of products: including bicycles; ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs (including Eddie Bauer and Disney Baby licensed products); home furnishings, including chairs, tables, bunk beds, futons and step stools; and recreational products. Dorel is one of the Canadian stocks we analyze in Stock Pickers Digest, our newsletter that recommends the stocks for the part of your portfolio you devote to aggressive investing. In the three months ended June 30, 2011, Dorel’s sales rose 1.9%, to $619.0 million from $607.7 million a year earlier (all figures except share price in U.S. dollars). The Canadian stock’s recreational/leisure division’s sales rose 15.9%, mainly on strong demand for bicycles. That offset lower sales in the other divisions....

“Averaging down” is the well-known market tactic by which investors buy more shares of a stock that has come down in price.

Averaging down lowers your average cost per share, but can cost you money in the long run. At the same time, you run the risk of distorting your overall portfolio management strategy.



Here are three problems that crop up with averaging down:

1. Averaging down ignores investment quality. Many investors have made lots of money by “averaging in” to the stock of a well-established, well-managed company — that is, buying more as funds became available over a period of years....

Gannett Co. Inc., New York symbol GCI, reported revenue of $1.33 billion in the three months ended June 26, 2011. That’s down 2.2%, from $1.37 billion a year earlier. The company is seeing lower advertising revenue at its 82 newspapers, including its flagship paper, USA Today. That’s mainly because its 2010 revenue benefited from advertising tied to the U.S. midterm elections. However, the company’s revenue from its digital operations, such as CareerBuilder.com and newspaper web sites, rose 12.6% in the quarter. Earnings fell 13.5 %, to $151.5 million, or $0.62 per share, from $175.2 million, or $0.73 per share. The company’s publishing earnings were hurt by a 9.3% increase in newsprint costs. To cut costs, the company announced in June 2011 that it will cut 700 jobs, or 2% of its workers....

On Monday, gold closed at a new record high of $1,898.10 U.S. an ounce. Prices have since pulled back to around $1,861.30 U.S., but that’s

Macy’s Inc., New York symbol M, operates 850 Macy’s and Bloomingdale’s department stores in 45 states. It also sells goods over the Internet. We analyze Macy’s in Wall Street Stock Forecaster, our newsletter that gives you stock market news and advice on U.S. stocks. In the three months ended July 30, 2011, Macy’s earnings rose 63.9%, to $241 million from $147 million a year earlier. Earnings per share rose 57.1%, to $0.55 from $0.35, on more shares outstanding. That was well ahead of the consensus estimate of $0.48 a share....

Reductio ad absurdum (Latin: “reduction to the absurd”) is a form of argument that goes back thousands of years, to Aristotle and before. It works like this: to prove a proposition is false, you simply show that its logical implications lead to absurd conclusions. This can be a great time saver for investors. Take, for example, courses that teach you how to trade in foreign exchange (or “forex” investments as course promoters refer to it in the ads). These courses can cost hundreds or thousands of dollars for a day or two of instruction. The marketing materials for these courses suggest that you can make a living in as little as a few minutes a day. Better yet, you can trade in forex investments in your living room....

Metro Inc., Toronto symbol MRU.A, is Canada’s third-largest supermarket operator, after Loblaw and Sobeys. Metro has about 600 supermarkets in Quebec and Ontario.

Metro is one of the growth stocks we analyze in our Successful Investor newsletter.

In the three months ended July 2, 2011, the growth stock’s sales rose 0.4%, to $3.58 billion from $3.56 billion a year earlier....

The Canadian consumer sector is highly competitive. Aside from other domestic retailers, Canadian retailers face rising competition from large U.S. discount retailers, like Wal-Mart and Costco. In addition, popular U.S. retailer Target is now expanding into Canada, and will begin opening its Canadian stores in early 2013. As well, consumer stocks are more exposed to swings in the overall economy than companies in some other sectors, such as utilities. ...

We come across a number of timely buys and sells when we’re researching stocks for members of our Inner Circle service. Here’s a particularly interesting question about SmartHeat (symbol HEAT on Nasdaq) from our latest weekly Inner Circle Q&A, in which I answer specific questions from our members. Like Sino-Forest, SmartHeat is a Chinese reverse-takeover (RTO) stock. Q: Pat: Would you please take a look at SmartHeat? Thanks....

Trilogy Energy Corp., symbol TET on Toronto, owns oil and gas properties in the Kaybob and Grande Prairie areas of central Alberta. About 76% of Trilogy’s production is natural gas. The remaining 24% is oil. Trilogy is one of the natural gas stocks we analyze in Stock Pickers Digest, our newsletter that recommends investments that may be appropriate for the part of your portfolio you devote to aggressive investing. In the three months ended June 30, 2011, Trilogy produced an average of 29,320 barrels of oil equivalent per day (including natural gas). That was up 21.7% from 24,087 barrels a day a year earlier. Trilogy’s daily production should jump to an average of 30,000 barrels for all of 2011....

Intel Corp., symbol INTC on Nasdaq, is the world’s largest computer-chip maker. About 80% of all computers use its chips. In the three months ended July 2, 2011, the tech stock’s revenue of $13.0 billion. That’s up 21.1% from $10.8 billion a year earlier. The company’s recent acquisitions of McAfee Inc. and Germany’s Infeon Wireless Solutions (now Intel Mobile Communications) contributed $1.0 billion to Intel’s revenue, or 7.7% of the total. The tech stock’s earnings rose 10.0% in the quarter, to $3.2 billion from $2.9 billion. Earnings per share rose 15.7%, to $0.59 from $0.51, on fewer shares outstanding. These figures exclude costs related to integrate acquisitions and other one-time items....

Sherwin-Williams Co., $76.72, symbol SHW on New York, is North America’s largest paint producer. It operates over 3,900 paint and finishing stores around the world.

Sherwin is one of the stocks we analyze in Wall Street Stock Forecaster, our newsletter for U.S.A....

Teck Resources Ltd., Toronto symbol TCK.B, is a leading producer of metallurgical coal, a key ingredient in steelmaking. It also produces other metals, including lead, copper and zinc. In the three months ended June 30, 2011, the resource stock’s earnings jumped 89.8%, to $1.12 a share from $0.59 a year earlier. Revenue rose 27.2%, to $2.8 billion from $2.2 billion. Teck saw higher prices for silver (up 111%), coal (up 49%), lead (up 32%), copper (up 30%), zinc (up 11%) and molybdenum (up 6%). However, higher operating costs and the strong Canadian dollar slightly offset these gains....

Many investors see asset allocation funds as an easy and profitable way to diversify between stocks, bonds and cash equivalents.

Asset allocation funds are mutual funds that can shift their portfolio allocations between stocks, bonds and cash in order to capitalize on perceived investment opportunities in any one of those classes.

For example, if the managers feel that the bond market is depressed and poised for an upswing, they may invest heavily in fixed-income investments for a few months to take advantage of the change.

Some managers make their own judgments when choosing between stocks, bonds and cash....

Endeavour Silver Corp., symbol EDR on Toronto, operates the Guanacevi and Guanajuato silver/gold mines in Mexico. We analyze Endeavour in Stock Pickers Digest, our newsletter for investing in aggressive stocks—including junior mining stocks. In the three months ended June 30, 2011, the junior mining stock’s revenue rose 84.7%, to $36.4 million from $19.7 million a year earlier (all amounts except share prices in U.S. dollars). The company earned $0.20 a share in the latest quarter, compared to a loss of $0.05 a share. Cash flow rose 125.0%, to $0.27 a share from $0.12 a share....

In the August 5, 2011, Wall Street Stock Forecaster hotline, we updated our buy/sell/hold advice on one of our long-time top stock picks, Kraft Foods Inc. (symbol KFT on New York). Kraft is the world’s second-largest food company, after Switzerland-based Nestle. Its owns many well-known brands, including Philadelphia cream cheese, Maxwell House coffee, and Oscar Mayer meats Kraft just announced plans to break itself into two separate, publicly traded companies. One company will sell snack foods, such as Oreo cookies, Cadbury chocolates, Trident gum and Tang powdered beverages. This business will have annual sales of $32 billion, with 42% of that coming from fast-growing markets, such as China, Brazil and India....

Texas Instruments Inc., symbol TXN on New York, is shifting its focus from digital chips for cellphones to faster-growing analog chips, which convert sound and images into digital signals that computers can understand. We analyze Texas Instruments in Wall Street Stock Forecaster, our newsletter that recommends companies for investors who invest in stocks in the U.S. markets. Revenue and earnings declined in the 2011 second quarter compared with a year earlier. This was mainly due to the disruption caused by the Japanese earthquake/tsunami in March. The earthquake reduced production at the company’s Japanese factories, and cost it $50 million to repair the damage....

Micromet Inc., $4.82, symbol MITI on Nasdaq is focused on discovering, developing and marketing new antibody-based cancer treatments.

Stanley Black & Decker Inc., New York symbol SWK, makes power and hand tools and security devices. It took its current form on March 12, 2010. That’s when Stanley Works bought the Black & Decker Corp. for $3.5 billion in stock. Stanley shareholders own 50.5% of the combined company, and Black & Decker investors own the remaining 49.5%. We analyze Stanley in Wall Street Stock Forecaster, our investing newsletter that recommends stocks in the U.S. markets. The company now expects efficiencies achieved by merging plants, distribution networks and purchasing systems will save it $450 million by the end of 2012....