Search

Cenovus Energy Inc., symbol CVE on Toronto, operates three oil-sands properties in Alberta, and one in Saskatchewan. Cenovus ships the heavy bitumen from these projects to refineries in Illinois and Texas. ConocoPhillips (New York symbol COP) owns 50% of these refineries, as well as 50% of Cenovus’ two main oil-sands projects. Cenovus also owns conventional oil and natural gas properties. Cenovus split off from EnCana Corp. in December 2009. In 2010, Cenovus earned $993.0 million, or $1.32 a share. That’s up 21.4% from $818.0 million, or $1.09 a share, in 2009. The oil stock’s production rose, as did oil prices. These were the main reasons for the higher earnings. These gains were somewhat offset by higher costs for shipping oil due to problems along the Enbridge pipeline system, and costs to upgrade its U.S. refineries. The oil stock’s cash flow fell 15.1% in 2010, to $2.4 billion, or $3.21 a share, from $2.8 billion, or $3.79 a share in 2009. Lower volumes and selling prices for natural gas were the main reasons for the declines....

SHERWIN-WILLIAMS CO. $83 (New York symbol SHW; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 107.9 million; Market cap: $9.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.sherwin-williams.com) is North America’s largest paint producer. The company also operates 3,400 paint stores, which account for 55% of its sales. In 2010, Sherwin expanded its wood-coating operations by purchasing two European companies: In April, it paid $53.8 million for Italy’s Sayerlack. In September, it bought Sweden’s Becker Acroma for $230.4 million. These new businesses are part of the reason why Sherwin’s sales rose 9.6% in 2010, to $7.8 billion from $7.1 billion in 2009. However, integration costs will keep them from contributing to Sherwin’s earnings until mid-2011....

LoJack Corp., symbol LOJN on Nasdaq, sells systems that help track and recover stolen vehicles. LoJack sells its products in the U.S. and 30 other countries. The company’s Canadian subsidiary is Boomerang Tracking. LoJack is one of the aggressive investing stocks we analyze in our Stock Pickers Digest newsletter. In the three months ended December 31, 2010, LoJack’s revenue rose 12.4%, to $40.0 million from $35.6 million a year earlier. The international division’s revenue jumped 27.1%, to $16.4 million from $12.9 million a year earlier. Sales in Italy were especially strong in the latest quarter: the company added 2,200 clients in the country, and now has a total of 13,000 Italian clients....

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 advice on investing money. Each Investor Toolkit update gives you a fundamental piece of investment strategy, and shows you how you can put it into practice right away. Tip of the week: “Our advice on 2 ways of investing money in the stock market” Most investors place two types of orders when buying stocks: “market orders” or “limit orders.”...

PROCTER & GAMBLE CO. $64 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.8 billion; Market cap: $179.2 billion; Price-to-sales ratio: 2.3; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.pg.com) is one of the world’s largest makers of household and personal-care products. Some of its top brands are Tide detergent, Crest toothpaste, Head & Shoulders shampoo and Pampers diapers. The company gets 60% of its sales from outside the U.S. Procter is streamlining its business. That includes dropping some less-profitable brands and cutting a third of its suppliers. These moves should free up more cash for advertising and marketing. As well, lower costs will give Procter more flexibility to cut its prices without hurting its profit margins. Meanwhile, the company earned $3.3 billion in its 2011 second quarter, which ended December 31, 2010. That’s up 5.8% from $3.1 billion a year earlier. Earnings per share rose 9.9%, to $1.11 from $1.01, on fewer shares outstanding. If you exclude an unusual tax gain and costs related to an investigation of the company by European competition regulators, earnings per share would have risen 2.7%, to $1.13 from $1.10....

Nvidia Corp., Nasdaq symbol NVDA, designs graphic chips that make computer games run more smoothly and appear more lifelike. In its 2011 fiscal year, which ended January 30, 2011, Nvidia earned $253.1 million. It lost $68.0 million in 2010. Earnings per share jumped to $0.43 from a loss of $0.12. Excluding one-time items, the technology stock’s earnings per share rose 160.0%, to $0.65 from $0.45. Nvidia spent 24.0% of its sales on research in fiscal 2011, so it’s more profitable than it seems. Sales rose 6.5%, to $3.5 billion from $3.3 billion. That’s largely due to strong demand for the technology stock’s new Tegra chips, which greatly enhance displays on cellphones and other mobile devices. The company is also seeing strong interest from computer makers for its chips that can process data as well as display graphics....

Investors generally look to aggressive stocks for capital gains and to more conservative stocks, like utilities, for income. However, there are some aggressive Canadian dividend paying stocks whose payouts are as high — or even higher — than more established companies. (We updated our buy/sell/hold advice on a high-dividend aggressive stock in the February 25, 2011, Stock Pickers Digest hotline. See below for further details.)

Dividends are a plus in aggressive investing — but focus on quality

...

DUN & BRADSTREET CORP. $81 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 49.8 million; Market cap: $4.0 billion; Priceto- sales ratio: 2.5; Dividend yield: 1.8%; TSINetwork Rating: Average; www.dnb.com) is the world’s largest provider of credit reports on individual companies. Businesses use these reports to make buying decisions and protect themselves from credit losses. Dun & Bradstreet has built up its international operations over the past few years. For example, in August 2010 it bought full control of its Australian credit-rating business for $207.9 million. The purchase is helping Dun & Bradstreet profit from rising demand for reliable credit ratings in the fast-growing Asia-Pacific region. The company’s growing overseas operations are also helping it offset slower growth in North America, which still supplies 75% of its revenue. In 2010, Dun & Bradstreet’s revenue rose 3.1%, to $1.64 billion from $1.59 billion. International revenue rose 17%. That more than offset a 1% decline in North American revenue....

Campbell Soup Co., symbol CBB on New York, is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices. The company gets 19.8% of its sales from international markets. Its biggest foreign markets are Australia and Europe. In the three months ended January 30, 2011, company’s sales fell 1.2%, to $2.13 billion from $2.15 billion. Soup sales fell 4.0% in the U.S. The company continues to face strong competition from generic brands. In response, it ran promotions that discounted the prices of some of its brands, particularly ready-to-serve soups. Earnings fell 7.7%, to $239.0 million from $259.0 million a year earlier. The company spent $417 million on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share fell 4.1% to $0.71 from $0.74. The lower sales and higher advertising spending were the main reasons for the decline....

Copper continues to attract a lot of attention from investors in commodity stocks. That’s because the metal recently hit an all-time high of $4.62 U.S. a pound. That’s up sharply from its low of $1.25 U.S. in late 2008. Right now, copper trades at around $4.47 U.S. a pound. Traditionally, investors have bought copper as a way to profit from general economic growth. That’s because, unlike gold, silver and many other precious metals, copper has a wide range of industrial uses. For example, it’s a key element in electrical wire and pipe.

Higher copper will brighten this commodity stock’s prospects

...

MOODY’S CORP. $30 (New York symbol MCO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 234.2 million; Market cap: $7.0 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.moodys.com) provides independent credit ratings and other information on bonds and other securities. Credit ratings account for 70% of Moody’s revenue. It gets the remaining 30% from selling credit-assessment software to banks and other lenders. As the economy improves, more businesses are issuing new bonds to fund expansion projects. That’s pushing up demand for Moody’s credit ratings. As a result, Moody’s revenue rose 13.1% in 2010, to $2.0 billion from $1.8 billion in 2009. Revenue from the U.S. (54% of overall revenue), rose 18.3%. Revenue at the company’s international operations (46% of revenue) rose 7.5%....

MCGRAW-HILL COMPANIES INC. $38 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 307.0 million; Market cap: $11.7 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.6%; TSINetwork Rating: Average; www.mcgraw-hill.com) gets 70% of its earnings and 45% of its revenue from its Standard & Poor’s division, which provides financial information, including credit ratings on bonds. The company also publishes textbooks and magazines, and owns nine television stations. In 2010, McGraw-Hill’s revenue rose 3.6%, to $6.2 billion from $6.0 billion. Revenue from Standard & Poor’s rose 8.3%, as businesses took advantage of low interest rates to issue more bonds. The textbook division’s revenue rose 1.9%, thanks to higher college enrolment and rising demand for electronic versions of its books. That offset slower demand for new elementary and high-school textbooks. Revenue at McGraw-Hill’s media operations fell 4.9%, mainly because the company sold BusinessWeek magazine in 2009. Without this sale, this division’s revenue would have risen 6.2%....

Yum! Brands Inc., New York symbol YUM, operates over 37,000 fast-food restaurants in over 110 countries. Its main banners include KFC (fried chicken), Pizza Hut, Taco Bell (Mexican food) and Long John Silver’s (seafood). The company continues to grow strongly in China. That offsets slower growth in the U.S. and other parts of the world. In 2010, Yum’s sales rose 4.7%, to $11.3 billion from $10.8 billion in fiscal 2019. Overall sales rose 17% in China, while same-store sales in China grew 6%. Yum opened 507 new restaurants in China in 2010, along with another 884 international outlets outside China....

Buckeye Partners L.P., symbol BPL on New York, operates over 8,700 kilometres of pipelines in the northeastern and midwestern U.S. These lines pump gasoline, jet fuel and other petroleum products. Buckeye also owns oil and natural-gas storage terminals and other related businesses. Buckeye is one of the income investing picks we analyze in Wall Street Stock Forecaster. In 2010, Buckeye’s revenue jumped 78.0%, to $3.2 billion from $1.8 billion in 2009. The gain mostly reflects the company’s recent acquisition of oil pipelines and storage terminals. In addition, the company is transporting more fuel due to the improving economy. Rising oil prices have also pushed up the company’s fee income....

A key part of our three-part tsinetwork.ca investment strategy is to diversify by spreading your money out across the five main economic sectors (Manufacturing & Industry; Resources; Consumer; Finance; and Utilities). (The other two parts are to stick with well-established, dividend-paying companies, and downplay stocks in the broker/public-relations limelight.) Generally speaking, stocks in the Resources and Manufacturing & Industry sectors expose you to above-average volatility, and stocks in the Utilities and Canadian Finance sectors entail below-average volatility. Consumer stocks fall somewhere in the middle....

Telus Corp., symbol T.A on Toronto, provides telephone services in B.C., Alberta and eastern Quebec. It also sells wireless services across Canada. In 2010, the dividend paying stock’s sales rose 1.8%, to $9.8 billion from $9.6 billion in 2009. Sales in the company’s wireless division rose 6.6%, and the wireline division’s sales fell 2.2%. Overall, Telus added 378,000 customers in 2010, bringing the total to 12.3 million. That figure includes 7.0 million wireless subscribers, 3.7 million wireline access lines, 1.2 million Internet subscribers and 314,000 “Optik TV” customers. (Optik TV is an Internet-based television service that operates through phone lines.)...

Cameco Corp., symbol CCO on Toronto, is the world’s largest uranium producer. The company supplies over 18% of global production, and has large, high-grade reserves, low-cost operations, significant market share and a number of uranium mines. The company also holds a 31.6% interest in Ontario’s Bruce Power partnership, which operates four of the eight reactors at the Bruce plant, North America’s largest nuclear-power complex. Uranium traded as low as $40 U.S. a pound in March 2010. Recently, it rose as high as $61, largely on news that China plans to raise its nuclear-power generation targets by 60%. Cameco recently signed two contracts with Chinese nuclear authorities: it will deliver 23 million pounds of uranium to China National Nuclear Corp., China’s largest nuclear-power producer, by 2020. It will also deliver 29 million pounds of uranium oxide to fast-growing nuclear producer China Guangdong Nuclear Power through 2025....

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 stock advice. Each Investor Toolkit update gives you a fundamental piece of investment strategy, and shows you how you can put it into practice right away. Tip of the week: “Too many stocks are as bad as too few.” The right number of stocks for you to own depends in part on where you are in your investing career....

Kraft Foods Inc., symbol KFT on New York, is the world’s second-largest food company, after Switzerland-based Nestle. Kraft has 11 brands that generate over $1 billion each in yearly sales. Aside from Kraft (cheeses, pasta and salad dressings), the large cap stock’s brands include Philadelphia (cream cheese), Maxwell House (coffee), Nabisco (biscuits), Oreo (cookies), Trident (gum) and Oscar Meyer (meats). In April 2010, Kraft paid $18.5 billion in cash and stock for U.K.-based Cadbury plc, a leading maker of confectioneries, including chocolate, candy and gum. Cadbury’s well-known brands include Dentyne and Clorets (gum), Dairy Milk (chocolate bars) and Halls (cough drops)....

Some investors rely on technical analysis (or chart reading) when they’re looking to add high return investments to their portfolios. That’s because relying on charts seems much simpler than delving into and weighing a company’s fundamentals. We always do some technical analysis when we look for high return investments to recommend in our newsletters, including Stock Pickers Digest, our newsletter for aggressive investing. And some successful investors find it helps to know a little about charts. But if you rely on charts at all, you should view them as just one of many things to consider when you make investment decisions.

Technical analysis: Focusing exclusively on share prices will eventually cost you money

...

Teradata Corp., symbol TDC on New York, makes computers and software that capture and store large amounts of a business’s data. Teradata then analyzes this information and identifies buying habits and trends. Teradata is taking advantage of the weak economy to hire new salespeople. That’s helping it enter new markets and offer more technology and services to its existing clients. In the year ended December 31, 2010, the tech stock’s sales climbed 13.5%, to $1.9 billion from $1.7 billion. Sales rose 19% in the Americas, 10% in the Asia-Pacific region, and 3% in Europe, the Middle East and Africa. The tech stock’s earnings rose 18.5% in 2010, to $301 million from $254 million a year earlier. Earnings per share rose to $1.77 from $1.46, on fewer shares outstanding. The company bought back 3 million of its own shares for $88 million in 2010....

Calian Technologies, symbol CTY on Toronto, operates in two areas: the business and technology services division, which accounts for 71% of the growth stock’s revenue, provides engineers, health-care workers and other skilled professional to clients on a contract basis. The systems-engineering division contributes the remaining 29% of revenue, and sells hardware and software that is used for testing, operating and managing satellite and other communications systems. In its first fiscal quarter, which ended December 31, 2010, the growth stock’s earnings fell 8.8%, to $3.1 million from $3.4 million a year earlier. Earnings per share dropped 6.8%, to $0.41 from $0.44, on fewer shares outstanding. Calian saw slightly lower demand for its higher-profit-margin contract workers....

Sysco Corp., symbol SYY on New York, supplies food and kitchen supplies to over 400,000 restaurants, hotels and schools in North America and Ireland. In its fiscal 2011 second quarter, which ended January 1, 2011, the U.S. stock’s earnings fell 3.8%, to $258.2 million, or $0.44 a share. That fell short of the consensus earnings estimate of $0.47 a share. A year earlier, it earned $268.3 million, or $0.45 a share. The company’s labour, pension and fuel costs all rose during the quarter. Revenue rose 5.8%, to $9.4 billion from $8.9 billion. However, most of the gain came from a 4.5% rise in food prices (meat, dairy and seafood jumped more than 10%), which Sysco passed along to its customers. A year earlier, food prices had dropped 3.5%....

We’ve long relied on these 3 stock market investing tips to find stocks to recommend in our investment newsletters and services. We think they can help you pick winners, too. (Our special report, “Stock Market Investing Strategy: Pat McKeough’s Conservative Investing Guide for Making Money and Cutting Risk,” is full of lower-risk investing strategies you can easily put into practice right away. Click here to download your copy now.)

1. Think like a portfolio manager: Portfolio managers gather information from companies, industry studies and other sources. A good portfolio manager then tries to build his or her client a portfolio that makes money if things go well, but won’t lose too much if the opinions sometimes turn out to be faulty....

Visa Inc., symbol V on New York, operates the world’s largest retail electronic payments network. The company processes credit, debit, prepaid and commercial payments under the Visa, Visa Electron, Interlink and PLUS brands. The company generates revenue from fees it charges card issuers and merchants for using its network. These fees are based on payment volume, transactions processed and other factors. Visa continues to benefit from the global trend toward greater use of credit and debit cards. In its 2011 first quarter, which ended December 31, the company’s revenue rose 14.2%, to $2.24 billion from $1.96 billion a year earlier. Earnings rose 15.9%, to $884.0 million from $763.0 million....