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One part of our three-pronged investing program is to spread your money out across the five main stock sectors of the economy (Manufacturing & Industry; Resources; Consumer; Finance; Utilities). (The other two parts are to hold mostly high-quality, dividend paying stocks, and downplay stocks in the broker/public-relations limelight.) Many stocks clearly fit in certain stock sectors. Royal Bank, for example, obviously goes in the Finance sector. But sometimes correctly categorizing a stock requires a judgment call. That’s the case with La-Z-Boy Inc. (symbol LZB on New York). We update our buy/sell/hold advice on La-Z-Boy in the current issue of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks. See below for further details on this rapidly changing company.

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These days, many investors who are approaching retirement worry that their retirement planning won’t generate the income stream they were banking on once they’ve left the workforce. Some investors in this situation look for what brokers sometimes refer to as a “rescue stock” — a can’t miss trading idea that can make up for the shortfall in their retirement planning. This, of course, is unrealistic. If such a low-risk, high-potential stock existed, why would you buy anything else? In fact, if you’re heading into retirement and are short of money, you should move your retirement planning in the opposite direction: aim for safer investments, rather than one last gamble....

CAMPBELL SOUP CO. $33 (New York symbol CPB; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 342.9 million; Market cap: $11.3 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.3%; WSSF Rating: Above Average) is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices. Like Heinz, Campbell aims to spur long-term growth by increasing sales in emerging markets, such as China and Russia. The company now gets 30% of its overall sales from international markets. Campbell is also doing a good job of developing new products. For example, it now sells low-sodium soups and baked goods made from whole grains. These premium products should appeal to health-conscious consumers. These foods also generate higher profit margins than Campbell’s regular products....

DEL MONTE FOODS CO. $12 (New York symbol DLM, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 198.2 million; Market cap: $2.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.7%; WSSF Rating: Average) makes canned fruits, vegetables, sauces and soups. The company also makes Meow Mix, 9Lives and Milk-Bone brand pet foods. The company earned $62.6 million in its second quarter, which ended November 1, 2009. That’s up 129.3% from $27.3 million a year earlier. Earnings per share rose 121.4%, to $0.31 from $0.14, on more shares outstanding. If you exclude a charge related to the early repayment of senior notes, Del Monte’s earnings would have risen to $0.36 a share in the latest quarter. Del Monte continues to cut costs and improve productivity. For example, it has moved some plants to cut the distance between them and reduce shipping costs. In all, Del Monte’s cost cuts lowered its expenses by $20 million in the latest quarter....

H.J. HEINZ CO. $44 (New York symbol HNZ; Income Portfolio, Consumer sector; Shares outstanding: 315.6 million; Market cap: $13.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.8%; WSSF Rating: Above Average) is a leading maker of condiments. Its flagship product, Heinz ketchup, accounts for about 60% of U.S. ketchup sales. The company also makes frozen potatoes (under the Ore-Ida brand), pasta sauces (Classico) and diet foods (Weight Watchers). Heinz gets 60% of its sales from overseas markets, and the company continues to look to foreign markets for growth. That’s partly because rising sales in Mexico, India and Russia are helping it offset lower sales to U.S. restaurants. The falling U.S. dollar is also expanding the contribution of Heinz’s overseas sales. In its second quarter, which ended October 28, 2009, the company’s earnings fell 11.6%, to $0.76 a share from $0.86 a year earlier. However, if you disregard an $0.18-a-share foreign-currency hedging gain in the year-earlier quarter, earnings per share would have risen by 11.8%....

CONAGRA FOODS INC. $23 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 443.4 million; Market cap: $10.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.5%; WSSF Rating: Above Average) makes a wide variety of packaged foods, including Chef Boyardee canned pasta, Hunt’s tomato sauce, Peter Pan peanut butter and Orville Redenbacher popcorn. The company gets 64% of its revenue by selling its products to consumers, so the company benefits as more people eat at home because of the slow economy. That has helped offset slower sales to businesses, such as restaurants, which account for the remaining 36% of its revenue. ConAgra continues to benefit from its plan to lower its annual costs by $250 million. These measures mainly include selling slow-growing, low-margin brands. Falling ingredient prices are also helping increase earnings....

MCCORMICK & CO. INC. $38 (New York symbol MKC; Income Portfolio, Consumer sector; Shares outstanding: 130.9 million; Market cap: $5.0 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.7%; WSSF Rating: Average) is the world’s leading maker of spices, herbs, seasonings, flavourings, sauces and extracts. It sells its products to consumers, restaurants and industrial food processors. Its top brands include McCormick, Club House, Zatarain’s, Ducos and Schwartz. The company likes to increase its sales through acquisitions. In 2008, it paid $604 million for the Lawry’s and Adolph’s brands of marinades and seasonings. It also bought Canadian honey producer Billy Bee Honey Products Ltd. for $76.4 million. McCormick earned $75.1 million, or $0.57 a share, in its third quarter, which ended August 31, 2009. That’s up 9.5% from $68.6 million, or $0.52 a share, a year earlier. The company’s new businesses were the main reason for the gain....

KRAFT FOODS INC. $28 (New York symbol KFT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $42.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 4.1%; WSSF Rating: Above Average) is the world’s second-largest food company after Switzerland-based Nestle S.A. Its leading brands include Kraft cheese, Maxwell House coffee, Nabisco cookies and Oscar Meyer meats. Kraft is buying U.K.-based Cadbury plc (New York symbol CBY). Cadbury is a leading maker of confectioneries, including chocolate, candy and gum. Buying Cadbury will help Kraft sell more of its foods in developing countries. Moreover, chocolates and candies generate higher profit margins than Kraft’s packaged foods. Kraft will pay $19.4 billion in cash and stock. That’s 17.6% more than its initial offer of $16.5 billion. As well, Kraft raised the cash portion to 60% from 40%. The deal should close by mid-2010....

GENERAL MILLS INC. $72 (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 329.5 million; Market cap: $23.7 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.7%; WSSF Rating: Above Average) is the second-largest maker of breakfast cereals in the U.S., after Kellogg. The company’s major brands include Cheerios, Wheaties and Total. General Mills also makes Betty Crocker baking mixes, Green Giant canned and frozen vegetables, and Yoplait yogurt. In its second quarter, which ended November 29, 2009, General Mills earned $565.5 million. That’s up 49.5% from $378.2 million a year earlier. Earnings per share rose 52.3%, to $1.66 from $1.09, on fewer shares outstanding. Without unusual items, such as gains on commodity-hedging contracts, earnings per share would have risen 13.2%, to $1.54 from $1.36. Even though General Mills cut the prices of certain products, its sales rose 1.7%, to $4.1 billion from $4.0 billion....

I hope you are enjoying and profiting from the stock trading advice in my TSI Network Daily Updates. Every day, TSI Network attracts a wide variety of Canadian investors. To take the pulse of this unique online community, we publish weekly polls so we can see what the site’s visitors think of current financial issues. The feedback we get from these polls often forms the basis of the stock trading advice we give you in our TSI Network Daily Updates. We also welcome you to submit your own questions about stock trading advice or any other investment matter, so you can quickly and easily get a feel for where other investors stand on issues that affect you. Just send your suggestions to pat@tsinetwork.ca. If we think they’re suitable for the site, we’ll post them as our “Financial Question of the Week.”...

Demand for medical devices and supplies will undoubtedly continue to grow as the population ages. Companies in this fast-changing field make a wide range of products, from laboratory instruments to bandages and surgical tools. Some medical-equipment firms are large and well-established, like C.R. Bard (symbol BCR on New York), one of the stocks we cover in our Wall Street Stock Forecaster newsletter. Bard makes many different medical devices and tools, and has over $2.4 billion U.S. in annual sales. The company also has a long history of paying dividends. At the other end of the scale are companies like Intuitive Surgical (symbol ISRG on Nasdaq). Intuitive’s share price has been rapidly rising, but its sales of $874.9 million U.S. are only about 36% of Bard’s sales. As well, Intuitive only has one product — the da Vinci computerized surgical system (more on that below) — and does not pay a dividend....

Technology has made extraordinary advances in the past decade, yet lots of investors lost money when they invested in it. Often, that was because they invested too early. In their eagerness to get in on the “ground floor,” they bought tech stocks based mainly on potential improvements in the technology. But they failed to consider the political, financial and practical obstacles that new technology always faces. ...

Over the years, we’ve recommended many stocks that have been taken over for big profits. In fact, some readers of our newsletters and investment services tell us that they never had a stock taken over at a profit until they began following our advice. (To get all the details on our stock market strategy, and how it can help your portfolio, don’t miss our free report, “Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada.” Click here to download your copy and get started right away.) More on the stock market strategy that helps us routinely spot takeover candidates a little further on. But first, here are just a few recent takeover targets we’ve recommended. All rewarded our readers with big gains:...

On January 22, Wall Street Stock Forecaster, our newsletter that focuses on the U.S. stock markets, will unveil a stock with the right mix of strong fundamentals and technological know-how to earn big profits in 2010 and beyond. In fact, we think this company’s prospects are so bright we’ve named it Wall Street Stock Forecaster’s #1 stock pick for the coming year. This company is already a major global player in its industry. But that doesn’t mean it’s resting on its laurels. It’s solidly focused on fuelling its growth, and has done so in a number of ways: It recently made a string of smart acquisitions that have both enhanced its products and helped it expand geographically. To top it off, its high research and development spending will continue to keep it way ahead of the competition....

Registered Retirement Savings Plans (RRSPs) are a great way for investors to cut their tax bills and make more money from their retirement investing. RRSPs are a form of tax-deferred savings plan. RRSP contributions are tax deductible, and the investments grow tax-free. (Note that you can contribute up to 18% of your earned income from the previous year, to a maximum of $21,000, rising to $22,000 in 2010). March 1, 2010, is the last day you can contribute to an RRSP and deduct your contribution from your 2009 income. When you later begin withdrawing the funds from your RRSP, they are taxed as ordinary income....

When you join my Inner Circle service, you get my investing advice on your own personal investment questions, plus you get to see what other Inner Circle members have asked, along with our answers. So you can get a sense of how our service works, and how our investing advice might help your portfolio, I’d like to share two recent member questions about exchange-traded funds (ETFs). Q: Pat, What’s your investing advice on iShares MSCI Brazil Index Fund?...

A rebounding global economy should continue to push up resource prices. That will help Canadian income trusts that serve the resource sector, including Precision Drilling Trust (symbol PD.UN on Toronto). Precision provides contract-drilling services to oil and gas producers, mainly in western Canada. In light of recent developments surrounding Precision, we’ve updated our buy/sell/hold advice on the trust in the current issue of The Successful Investor. (Read on to find out how you can get a free copy of this issue. Along with our latest buy/sell/hold advice on Precision, it contains our full analysis of 16 other investments that could be suitable for your portfolio.) ...

CGI GROUP INC. $15 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 297.0 million; Market cap: $4.5 billion; Price-to-sales ratio: 1.2; No dividends paid; SI Rating: Extra Risk) is Canada’s largest provider of computer-outsourcing and information-technology services. It also operates in 15 other countries. Canada provided 57% of CGI’s revenue in its latest year, followed by the U.S./India (36%) and Europe/Asia (7%). CGI’s main businesses are: 1) Outsourcing: CGI takes over all or part of a client’s information-technology and related functions. That lets the client cut costs and gain ongoing access to the most current computer technology. Outsourcing accounts for 60% of CGI’s revenue. 2) Consulting: In addition to technical expertise, CGI aims to ensure that its consultants have knowledge of the business issues in their clients’ industries or sectors....

ROYAL BANK OF CANADA $56 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.4 billion; Market cap: $78.4 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.6%; SI Rating: Above Average) is Canada’s largest bank, with total assets of $655.0 billion. Royal is seeing strong demand for loans because of low interest rates. As well, improving financial markets have helped its capital-markets division attract new business. This division, which Royal has steadily expanded in the past few years, helps companies raise capital by selling shares and issuing debt. It now provides 25% of the bank’s total revenue. In the year ended October 31, 2009, Royal’s revenue rose 34.9%, to $29.1 billion from $21.6 billion in the prior year. Earnings rose 6.7%, to $4.9 billion from $4.4 billion. However, earnings per share fell 3.0%, to $3.28 from $3.38, on 7% more shares outstanding. The 2009 figures exclude a $1-billion writedown of goodwill related to Royal’s U.S. operations. Its U.S. and international banking division supplies roughly 10% of its revenue....

TORONTO-DOMINION BANK $64 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 858.8 million; Market cap: $55.0 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.8%; SI Rating: Above Average) is the second-largest Canadian bank, with total assets of $557.2 billion. TD has now fully integrated Commerce Bancorp Inc. with its other U.S. banking operations. The bank paid $8.5 billion for Commerce in May 2008. It now operates as “TD Bank,” and has 1,028 branches from Maine to Florida. The U.S. banking business provides 16% of TD’s overall profits. If you include $276-million in integration costs and $576-million of writedowns of securities, TD’s earnings in the year ended October 31, 2009, fell 18.6%, to $3.1 billion from $3.8 billion in the prior year. Earnings per share fell 28.7%, to $3.47 from $4.87, on more shares outstanding. Revenue rose 21.8%, to $17.9 billion from $14.7 billion, as low interest rates spurred strong demand for new loans....

BANK OF NOVA SCOTIA $47 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.0 billion; Market cap: $47.0 billion; Price-to-sales ratio: 1.9; Dividend yield: 4.2%; SI Rating: Above Average) is Canada’s third-largest bank, with total assets of $496.5 billion. Bank of Nova Scotia is the most international of the big-five banks. It gets about 30% of its earnings from its overseas operations, which are mainly in the Caribbean, Latin America and Asia. These businesses have struggled lately, as the global recession pushed up loan losses. But the rebounding world economy gives them long-term appeal. The bank earned $3.5 billion in the year ended October 31, 2009. That’s up 13.0% from $3.1 billion in the prior year. Earnings per share rose 8.5%, to $3.31 from $3.05, on more shares outstanding. If you exclude writedowns of securities, it would have earned $3.70 a share in 2009. Revenue rose 21.7%, to $14.5 billion from $11.9 billion....

BANK OF MONTREAL $54 (Toronto symbol BMO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 550.5 million; Market cap: $29.7 billion; Price-to-sales ratio: 1.9; Dividend yield: 5.2%; SI Rating: Above Average) is the fourth-largest Canadian bank, with total assets of $388.5 billion. The bank earned $1.8 billion in fiscal 2009, down 9.7% from $2.0 billion in the prior year. Earnings per share fell 18.1%, to $3.08 from $3.76, on more shares outstanding. Excluding writedowns and other unusual items, the bank would have earned $4.02 a share in fiscal 2009. Revenue rose 8.4%, to $11.1 billion from $10.2 billion. That’s mainly because low interest rates continue to push up demand for mortgages and other loans....

CANADIAN IMPERIAL BANK OF COMMERCE $66 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 384.0 million; Market cap: $25.3 billion; Price-to-sales ratio: 1.8; Dividend yield: 5.3%; SI Rating: Above Average) is Canada’s fifth-largest bank, with assets of $335.9 billion....

Sometimes a stock moves downward and creates what we consider a buying opportunity. We apply the term when we feel an attractive stock has dropped in price for reasons that are of a passing nature, or that are exaggerated in investors’ minds.

This shouldn’t be confused with “averaging down.” That’s when you buy more of a stock you own that has fallen in price, mainly to lower your average cost per share....

On January 15, Stock Picker’s Digest, our newsletter for aggressive investing, will unveil a stock that’s well positioned for explosive profits in 2010 — and if you hold it for a couple of years, there’s a great chance that it could skyrocket even further. In fact, we think this company’s prospects are so bright we’ve named it Stock Picker’s Digest’s #1 stock pick for the coming year. This Canadian firm has staked out a strong position in its industry. Plus, its low cost structure puts it in a strong position to profit as the economy recovers. And these advantages are only the beginning. The company has recently made a big investment in improving its computer systems. And it has a great reputation for customer service — an often underappreciated factor in attracting and retaining clients....