Search

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: “The top 3 ways to earn higher profits in world stock market investing” High-quality foreign stocks are a great way to diversify your portfolio. Moreover, many fast-growing markets, like China and India, have positive outlooks. That’s because their people are generally younger than North Americans, and rising incomes are helping more of them advance into the middle class....

PRT Forest Regeneration Income Fund, Toronto symbol PRT.UN, is the largest producer of container-grown forest seedlings in North America. It grows its seedlings in 13 greenhouses and open outdoor compounds. PRT expects to produce about 170 million seedlings in 2011. In the three months ended December 31, 2010, PRT reported cash flow of $0.07 per unit, compared to $0.12 per unit a year earlier. The fund received payment for an insurance claim in early 2010, and used a portion of the funds to pay off its $3.7-million bank debt. That significantly lowered its interest costs. However, that was not enough to offset a 9.4% drop in revenue, to $6.8 million from $7.5 million....

Oil now trades at around $110 U.S. a barrel. That’s up over 29% from $85 U.S. a year ago, and 175% higher than its low of $40 U.S. in February 2009. We think oil prices could rise even further if the global economy continues to rebound, as we expect. Even so, we continue to advise against overindulging in Canadian oil stocks. That’s because the Resource sector (including oil) is highly volatile, and no one can accurately predict future oil prices. However, you can profit nicely over long periods by investing a reasonable portion of your portfolio in well-established or well-managed Canadian oil stocks, especially those with high-quality reserves and rising production. These companies are well-positioned to profit during periods of high oil prices, and are able to at least partly offset price declines by producing more oil....

Alimentation Couche-Tard, symbol ATD.B on Toronto, is the largest convenience store operator in Canada, with over 2,000 outlets. It also has over 3,500 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. The fuel pumps at most of the Canadian stock’s stores provide 68.0% of the company’s sales. In the three months ended January 30, 2011, Couche-Tard’s earnings rose 29.6%, to $71.0 million, or $0.38 a share, from $54.8 million, or $0.29 a share, a year earlier (all figures except share prices in U.S. dollars). The latest earnings beat the consensus earnings forecast of $0.37 a share. The Canadian stock’s revenue rose 13.7%, to $5.6 billion from $4.9 billion. Same-store merchandise sales climbed 3.9% in the U.S., and 0.4% in Canada. U.S. sales make up 77.9% of total sales. Revenue from gasoline and diesel fuel rose 18.5%, mainly due to rising prices. The company also installed fuel pumps at more of its outlets....

Gold closed at an all-time high of $1,475.00 U.S. in Friday’s trading. It now trades at around $1,468, up 27.4% from a year ago. Gold’s recent gains have partly resulted from investor fears about the sovereign debt of European countries after Portugal requested a bailout from the European Union and International Monetary Fund. Investors are also worried about political turmoil in Libya and other Middle Eastern countries, as well as the possibility that today’s artificially low interest rates and governments injecting money into their economies will spur a huge rise in inflation. These fears are prompting more investors to buy gold and gold investments, because they believe investing in gold will provide them with additional security....

McCormick & Co. Inc., New York symbol MKC, makes spices, herbs, seasonings, specialty foods and flavours, and markets them to the food industry. In addition to North America and Europe, the company operates in Mexico, Central America, Australia, China, Singapore, Thailand and South Africa. The U.S. stock’s brands include McCormick, Old Bay, Thai Kitchen and Billy Bee. In the three months ended February 28, 2011, earnings rose 13.1%, to $76.8 million from $67.9 million a year earlier. The company spent $50.3 million on share buybacks during the quarter. Due to fewer shares outstanding, earnings per share rose 11.8 %, to $0.57 from $0.51. That beat the consensus earnings estimate of $0.54 a share. Sales rose 2.4%, to $782.8 million from $764.5 million a year earlier. Strong sales in China, India and Mexico offset weak or flat sales elsewhere. The company also raised its prices to offset the higher ingredient costs....

Over the past few months, we’ve periodically looked at common mistakes most investors make, and given you our advice on how to avoid them. Here are 3 more common errors all investors make from time to time.

1. Following an unrealistic investment strategy: Some investors, particularly newcomers, plan to buy a few hot stocks (or funds, or options or futures), and double or triple their money in a few years. Then they’ll settle into a low-risk investing style that may only return an average 10% to 12% yearly. But if you could make 200% or 300% in a few years, why would you quit? If you could do it once, you should be able to do even better as you gain experience.
   Of course, if you doubt that you can keep it up indefinitely, you should also question whether you can pull it off the first time. Our advice is that the best approach for you is one that will work for you more-or-less indefinitely. You’ll want to be sure it suits your circumstances and temperament, that it won’t take up too much of your time, and that it doesn’t require luck or extraordinary circumstances for success.

...

International Road Dynamics, symbol IRD on Toronto, makes products and systems that manage highway traffic, including automated toll-road and weigh-station systems for trucks. The aggressive investing stock’s weigh-in-motion system weighs trucks while they’re moving, rather than at less-efficient roadside weigh stations. International Road also makes advanced traffic-control, driver-management and data-collection systems. In the three months ended November 30, 2010, International Road’s sales fell 16.4%, to $10.7 million from $12.8 million a year earlier. The drop was due mainly a stronger Canadian dollar, which pushed down the company’s U.S. sales by 36.8%, to $4.8 million from $7.6 million. As the U.S. economy improves and government spending on roadways increases, the company’s U.S. sales should pick up. In Canada, sales rose 58.3% in the latest quarter, to $1.9 million from $1.2 million a year earlier. Offshore sales were unchanged at $4.0 million. In the quarter, the company lost $335,000, or $0.03 per share, compared to earnings of $337,000, or $0.03 per share a year earlier. The lower sales were the main reason for the earnings decline....

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: “Base your investing strategy on these 3 good investor attitudes.” To succeed as an investor, you need to cultivate three personal mental strengths:...

Pulse Seismic, symbol PSD on Toronto, buys, sells and licenses seismic data to clients in western Canada. The company is one of the aggressive stock investing picks we analyze in our Stock Pickers Digest newsletter. Pulse’s main business is seismic-data licensing. It has built a library of seismic research that it licenses to clients, mostly oil and gas companies. Pulse usually buys seismic-survey data from oil and gas firms. It also performs what it calls “participation seismic surveys.” Oil and gas producers pay Pulse to participate in these surveys in return for a perpetual, non-exclusive licence to use the newly generated data. Pulse owns the data the surveys generate, and adds it to its library. Oil and gas firms, which may use different scientific models in their exploration, can then lease various selections and combinations of the data....

Over 400 investors are now following our TSI Network Facebook page. If you haven’t yet visited the page — www.tsinetwork.ca/facebook — you really should. By joining these 400 investors and “liking” our page (more on how to do that below), you’ll give yourself even better access to our free, risk-cutting investment advice. I guarantee it will make you a better investor. Here’s what you get when you “like” our page:...

Adobe Systems Inc., symbol ADBE on Nasdaq, makes software that lets computer users create, edit and share documents in the popular PDF format. As well, graphic designers use the technology stock’s software to create print publications and web pages. We analyze Adobe in Wall Street Stock Forecaster, our newsletter that focuses on stocks in the U.S. market. The company also makes Adobe Flash, which lets web site developers make web pages more interactive by adding animation and video. Computer users can download the technology stock’s Flash Player viewer for free....

I hope you are enjoying and profiting from the free investing advice you get in our TSI Network daily updates. Our dailies aim to educate you on best practices in investing. They cover a range of investment topics, and explain conservative investment strategies you can use to build the best portfolio for you, and grow your wealth with less risk. ...

BANK OF NOVA SCOTIA $59.55 (Toronto symbol BNS: Shares outstanding: 1.0 billion; Market cap: $61.9 billion; TSINetwork Rating: Above Average; Div. yield: 3.5%, www.scotiabank.com) is the third largest of Canada’s five big banks, with assets of $541.3 billion. In the three months ended January 31, 2011, the bank earned a record $1.2 billion, or $1.07 a share. That’s up 18.8% from $988 million, or $0.91 a share, a year earlier. Bank of Nova Scotia continues to set aside less money to cover bad loans because of the improving economy. Loan-loss provisions fell 27.5%, to $269 million from $371 million a year earlier....

Japan’s reconstruction could prompt a further rise in copper prices. This new FREE report shows you how you can profit with less risk. Copper continues to attract a lot of investor attention. That’s because copper prices recently hit an all-time high of $4.62 U.S. a pound. That’s up sharply from a low of $1.25 U.S. in late 2008. Copper prices fell to around $4.10 U.S. a pound in the wake of the Japanese earthquake and tsunami, but have moved up since then. The dip in copper prices mainly reflects investor fears that copper demand will drop because the disaster has slowed Japanese industrial production. But that’s just temporary. As the reconstruction of Japan gets underway, the need for wiring, piping, and other copper-based products will be great. That could prompt a further rise in copper prices....

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. In the three months ended December 30, 2010, the stock pick’s sales fell 1.0%, to $539.5 million from $545.3 million a year earlier. The home furnishing division’s sales declined 19.6%. That’s mainly because of slower sales in the U.S. The juvenile division’s sales dropped 5.0%, mainly due the rising Canadian dollar and lower sales in the U.S. However, the stock pick’s recreational/leisure division’s sales climbed 17.2%, due to strong sales of new products, including a new Schwinn bike....

Green stocks continue to appeal to many investors on an emotional and conceptual level. However, many of these companies offer limited investment potential. That’s because green stocks may need a long time to move from the research or concept stage to profitability. As well, many green stocks need government subsidies to be profitable, and the future of these subsidies is uncertain as governments around the world struggle with high budget deficits. To cut your risk in green stocks, we continue to recommend that you focus on established firms that have a sound base of other operations, or whose products have many different uses....

AlarmForce Industries, symbol AF on Toronto, sells two-way voice alarm systems and monitoring services in Canada and the U.S. AlarmForce’s system differs from others because it lets emergency operators verify an alarm by establishing immediate two-way voice contact with homeowners. It then dispatches security personnel to the client’s home. If intruders are present, the two-way contact can frighten them away. In the three months ended January 31, 2011, the company’s sales rose 10.0%, to $9.9 million from $9.0 million a year earlier. Earnings rose 32.7%, to $1.6 million, or $0.13 a share, from $1.2 million, or $0.10 a share. The company holds cash of $10.2 million, or $0.84 a share, and has no debt....

MCKESSON CORP. $78 (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 254.3 million; Market cap: $19.8 billion; Price-to-sales ratio: 0.2; Dividend yield: 0.9%; TSINetwork Rating: Average; www.mckesson.com) is the largest wholesale drug distributor in the U.S. and Canada. It also owns 49% of Mexico’s largest drug distributor. McKesson’s customers include 40,000 pharmacies, as well as doctor’s offices, hospitals and clinics. The company also supplies surgical tools and health and beauty products. McKesson continues to see strong growth from its technology-solutions division, which makes computers and software that help pharmacies and clinics manage their drug inventories. This division accounted for just 3% of McKesson’s sales, but around 25% of its earnings. In its 2011 third quarter, which ended December 31, 2010, McKesson’s earnings fell 52.5%, to $155 million, or $0.60 a share. It earned $326 million, or $1.19 a share, a year earlier. The drop was mainly due to a $189-million charge related to a class-action lawsuit that accused the company of inflating prescription-drug prices. If you exclude all unusual items, McKesson would have earned $1.22 a share in the latest quarter....

Chemtrade Logistics Income Fund, symbol CHE.UN on Toronto, is one of North America’s largest suppliers of sulphuric acid, sulphur, liquid sulphur oxide and sodium hydrosulphite. It also supplies sodium chlorate, phosphorous pentasulphide and zinc oxide. In addition to selling chemicals, Chemtrade processes spent acid. Chemtrade has three divisions: the Sulphur Products and Performance Chemicals division supplies 54.5% of the income trust’s revenue. Pulp Chemicals accounts for 8.5% of revenue. The International division supplies the remaining 37.0%. This division removes and markets sulpur and sulphuric acid outside of North America. In the three months ended December 31, 2010, the income trust’s cash flow per unit fell 31.7%, to $0.28 from $0.41 a year earlier. This was partly due to reduced production from a few of its larger sulphuric-acid plants, especially the plant in Beaumont, Texas, which had been damaged by a fire in 2008. That plant was shut down for half of the fourth quarter, forcing the company to use higher-cost supply sources and routes to make deliveries to customers....

We’ve long recommended that all Canadian investors own two or more of the big five Canadian bank stocks. That’s mainly because of their importance to Canada’s economy. Like most stocks, the top five banks slumped deeply during the 2007-2009 market downturn and financial crisis. But since the market turnaround of March 2009, several of the top five have recovered and gone on (at least briefly) to all-time highs. Few other stock groups have done as well. (In a recent Successful Investor Hotline, we updated our buy/sell/hold advice on Toronto-Dominion Bank, which is the second biggest of the big-five Canadian bank stocks, after Royal Bank. Read on for further details.)...

BAXTER INTERNATIONAL INC. $52 (New York symbol BAX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 579.4 million; Market cap: $30.1 billion; Price-to-sales ratio: 2.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.baxter.com) has two divisions: Medical Products (which accounted for 56% of Baxter’s 2010 sales) makes intravenous pumps, syringes and kidney-dialysis equipment; and BioScience (44%), makes vaccines and drugs. The company makes a wide range of products, and overseas markets account for 60% of its sales. That cuts its risk. As well, Baxter gets about half of its sales from single-use medical products that continually need to be reordered. Baxter’s sales rose 2.2% in 2010, to $12.8 billion from $12.6 billion in 2009. However, earnings fell 35.6%, to $1.4 billion from $2.2 billion. Earnings per share fell 33.4%, to $2.39 from $3.59, on fewer shares outstanding....

RioCan Real Estate Investment Trust, symbol REI.UN on Toronto, operates 297 retail properties in Canada, mainly outdoor shopping malls. It also owns 31 malls in the U.S. through joint ventures, including its partnership with Cedar Shopping Centers Inc. (New York symbol CDR). RioCan owns 80% of the joint venture with Cedar, and 14% of Cedar itself. In 2010, the real estate investment trust’s revenue rose 17.0%, to $887.0 million from $758.0 million in 2009. The real estate investment trust’s earnings jumped 166.0%, to $303.0 million from $113.9 million in 2009. Earnings per unit rose 151.0%, to $1.23 from $0.49, on more units outstanding. The increase was mostly due to a one-time non-cash reversal of future income tax charges. In 2010, RioCan acquired 19 properties in Canada and 29 in the U.S. for a total of $986 million....

A key part of our three-part tsinetwork.ca portfolio management advice is to downplay stocks that are in the broker/public-relations limelight.

(The other two parts are to invest mainly in well-established, dividend-paying companies and spread your money across the five main economic sectors: Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities.)

It’s especially crucial to downplay stocks that are getting a lot of attention from brokers in the media....

C.R. BARD INC. $96 (New York symbol BCR; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 85.0 million; Market cap: $8.2 billion; Price-to-sales ratio: 3.1; Dividend yield: 0.8%; TSINetwork Rating: Above Average; 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%. The company has several plans to spur its growth. For example, it aims to increase its international sales, which now account for 30% of its total sales. As well, Bard wants to launch more new products. It spent 6.8% of its sales on research in 2010. It aims to raise that to 7.5% in 2011....