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ZARGON ENERGY TRUST $21.75 (Toronto symbol ZAR.UN; SI Rating: Speculative) (403-264- 9992; www.zargon.ca; Shares outstanding: 18.2 million; Market cap: $395.6 million) has oil and gas production assets in Alberta, Manitoba, Saskatchewan and North Dakota. Output is weighted 54% toward gas and 46% to oil. In the three months ended June 30, 2008, Zargon’s production rose 9.1%, to 9,239 barrels of oil equivalent per day, from 8,465 barrels. However, cash flow per unit rose 47.6%, to $1.55 from $1.05 a year earlier on sharply higher oil and gas prices. Zargon’s monthly distribution of $0.18 gives the units a yield of 9.9%. The trust flowed just 35% of its cash flow through to its unitholders in the latest quarter. The units now trade at around 3.5 times forecast cash flow based on the latest quarter. Debt of $85.4 million is equal to just under three quarters’ cash flow....

TRILOGY ENERGY TRUST $10.75 (Toronto symbol TET.UN; SI Rating: Speculative) (403-290-2900; www.trilogyenergy.com; Shares outstanding: 95.4 million; Market cap: $1.0 billion) holds oil and gas properties in the Kaybob and Grand Prairie areas of central Alberta. Production is weighted 79% toward gas and 21% to oil. In the three months ended June 30, 2008, Trilogy’s cash flow per unit rose 26.8%, to $0.71 from $0.56. Production rose 3.6%, to 21,195 barrels of oil equivalent per day, from 20,467 barrels. Trilogy’s monthly distribution of $0.10 gives it a yield of 11.2%. It flows approximately 34% of its cash flow through to its unitholders. Debt is reasonable at $341.3 million, or 34% of market cap. Trilogy now trades at around 3.8 times its latest cash flow....

Maple Leaf Foods Inc. $11 (Toronto symbol MFI Conservative Growth Portfolio, Consumer sector; Shares outstanding: 126.9 million; Market cap: $1.4 billion; SI Rating: Average) is Canada’s largest food processing company. Its products include fresh and prepared meats and poultry, mostly under the Maple Leaf and Schneider brands. It also makes fresh and frozen bakery products through 89.8%-owned Canada Bread Co. Ltd. Maple Leaf is currently in the middle of major restructuring that will see it focus on more-profitable packaged meats and meals. In the past two years, it has sold its animal feed operations and scaled back its hog-processing operations. The company is also investing heavily in new plants and equipment. It will probably take Maple Leaf another few months before it starts to realize the full benefits of its plan. Meanwhile, sharply higher prices for grains and energy continue to hurt its profitability. Exports account for about 30% of the company’s sales, and the stronger Canadian dollar also makes its products more expensive outside of Canada.Maple Leaf’s sales rose from $4.2 billion in 2003 to $5.6 billion in 2005, but fell to $5.2 billion in 2007. Earnings before unusual items grew from $0.04 a share (total $83 million) in 2003 to $0.59 a share ($201 million) in 2005. Earnings fell to $0.38 a share ($173 million) in 2006, but improved to $0.51 a share ($199 million) in 2007....

Canada Bread Co., Ltd. $60 (Toronto Symbol CBY Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.5 billion; SI Rating: Above average) makes a wide variety of baked goods such as bread, bagels and rolls. It also makes specialty pasta and sauces. Major brands include Dempster’s, Olivieri, and Olafson’s. Canada Bread accounts for about 30% of Maple Leaf’s sales. Thanks partly to acquisitions, Canada Bread’s sales rose from $1.2 billion in 2003 to $1.5 billion in 2007. Earnings before one-time items rose from $1.61 a share (total $63 million) in 2003 to $3.31 a share ($129 million) in 2007. Innovative products that take advantage of growing interest in healthy eating are also helping to expand Canada Bread’s earnings. For example, the company has developed a new bread that contains inulin, a fibre that improves digestion. Premium products like this generate higher profit margins for Canada Bread than its regular products....

Toronto-Dominion Bank $64 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 802.9 million; Market cap: $51.4 billion; SI Rating: Above average) is Canada’s second-largest bank, with assets of $503.6 billion. TD recently completed its acquisition of U.S.-based Commerce Bancorp for $8.5 billion in cash and stock. To put the purchase price in context, TD earned $973 million or $1.32 a share in its second fiscal quarter ended April 30, 2008. The acquisition doubled TD’s retail banking operations in the United States to around 1,100 branches. TD estimates that its larger U.S. operations will contribute $750 million to its earnings in fiscal 2008, and $1.2 billion in 2009. The bank originally planned to re-brand all of its U.S. operations as “TD Commerce Bank”. However, a legal challenge from a smaller bank with a similar name prompted TD to make this change. It’s unlikely that dropping the Commerce name will force TD to writedown any of the $6.1 billion in goodwill it recorded on the purchase....

Bank of Montreal $49 (Toronto symbol BMO Conservative Growth Portfolio, Finance sector; Shares outstanding: 503.5 million; Market cap: $24.7 billion; SI Rating: Above average) is Canada’s fourth-largest bank, with assets of $375.2 billion. The bank recently restructured two of its investment vehicles that hold asset-backed securities. The restructuring averted potential writedowns and costs of as much as $1.5 billion. To put that in context, Bank of Montreal earned $642 million or $1.25 a share in its second fiscal quarter ended April 30, 2008. The latest earnings included a $57 million after-tax gain from the restructuring of these two investment vehicles. The restructuring also reduces the likelihood that Bank of Montreal will have to issue new shares. Bank of Montreal now aims to further cut its long-term risk by building up its retail operations, and shrinking its corporate and stock market businesses. It may also take advantage of the slowdown in the United States to expand its American operations. Bank of Montreal’s main U.S. asset is 100%-owned Harris Bank, which provides banking services in Chicago, Florida and Arizona....

Canadian Imperial Bank of Commerce $63 (Toronto symbol CM Conservative Growth Portfolio, Finance sector; Shares outstanding: 380.8 million; Market cap: $24.0 billion; SI Rating: Above average) is the fifth-largest bank in Canada with assets of $343.1 billion. The problems with U.S. subprime mortgages have hurt CIBC more than the other big five Canadian banks. So far, CIBC has written off $6 billion worth of loans and illiquid securities. CIBC could face a further $1 billion in writedowns due to concerns over the financial health of several major bond insurers. These insurers provide CIBC and other banks with guarantees on securities they hold, such as bonds backed by U.S. subprime mortgages. In the three months ended April 30, 2008, CIBC lost $1.1 billion or $3.00 a share, mainly due to $1.7 billion (after-tax) in writedowns....

Metro Inc. $25 (Toronto symbol MRU.A Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 111.9 million; Market cap: $2.8 billion; SI Rating: Extra risk) operates around 600 retail food stores under the Metro, Metro Plus, Super C, A&P, Dominion, Loeb and Food Basics banners. Metro has completed the first phase of its 2005 acquisition of A&P Canada, which operates 244 stores in Ontario. The first phase involved combining the two companies’ purchasing operations. That generated about $90 million in annual savings. To put that figure in context, Metro earned $58.1 million or $0.51 a share in its second quarter ended March 15, 2008. The company also installed a new computerized inventory management system in the A&P Canada stores. The second phase of the A&P Canada integration involves combining certain stores and private label products, and will probably begin later this year. Fewer banners will lower its marketing costs. As well, a single private label will give it more purchasing power with suppliers. Metro has not revealed how much it expects to save in this second phase, but the costs will probably offset the initial benefits....

BCE INC. $40 (Toronto symbol BCE, Conservative Growth Portfolio, Utilities sector; Shares outstanding: 805.8 million; Market cap: $32.2 billion; SI Rating: Above average) plans to cut its workforce by 6% and simplify its management structure. This will cost BCE $250 million, but should save it $300 million a year. In the three months ended June 30, 2008, BCE earned $425 million or $0.53 a share before one-time items. The consortium headed by the Ontario Teachers’ Pension Plan now aims to complete its $42.75-a-share takeover of BCE by December 11, 2008. Even if the deal falls through, the savings from this latest restructuring will help BCE compete with new entrants in the wireless market. BCE is still a buy.

Petro-Canada $47 (Toronto symbol PCA Conservative Growth Portfolio, Resources sector; Shares outstanding: 484.4 million; Market cap: $22.8 billion; SI Rating: Average) continues to profit from high energy prices, which offset lower production from its offshore operations in Eastern Canada. In the three months ended June 30, 2008, earnings rose 46.0% to $2.38 a share from $1.63 a year earlier. These figures exclude unusual items. Cash flow per share jumped 49.3%, to $4.09 from $2.74. Revenue grew 38.2%, to $7.6 billion from $5.5 billion. Thanks to the strong results, the company has raised its quarterly dividend by 53.8%, from $0.13 a share to $0.20. The new annual rate of $0.80 yields 1.7%. Petro-Canada is a buy.

Nortel Networks Corp. $6.43 (Toronto Symbol NT Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 496.5 million; Market cap: $3.2 billion; SI Rating: Speculative) lost $113 million in the three months ended June 30, 2008 compared to a loss of $37 million a year earlier (all amount except share price and market cap in U.S....

Gennum Corp. $10 (Toronto symbol GND Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.6 million; Market cap: $356.0 million; SI Rating: Above average) has acquired ASIC Architect Inc., a California-based developer of products for highspeed computer networks....

ROYAL BANK OF CANADA $48 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $62.4 billion; SI Rating: Above average) is Canada’s largest bank, with total assets of $627.5 billion.

Royal is taking advantage of the slowing U.S....

Bank of Nova Scotia $51 (Toronto symbol BNS Conservative Growth Portfolio, Finance sector; Shares outstanding: 987.0 million; Market cap: $50.3 billion; SI Rating: Above average) is the third-largest bank Canadian bank, with $452.6 billion in assets. The bank has few holdings in the U.S. It prefers to focus on developing regions where it can quickly expand its market share. International operations now supply 30% of its earnings. For example, it recently increased its stake in Scotiabank Peru, that country’s third-largest bank, from 78% to 98%. The $230 million price is equal to 20% of the $980 million or $0.97 a share that Bank of Nova Scotia earned in the three months ended April 30, 2008....

TD HEALTH SCIENCES FUND $15.69 (CWA Rating: Speculative) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.tdcanadatrust.ca. No load — deal directly with the bank) invests mostly in U.S. companies with a mixture of large-capitalization stocks and earlier-stage biotechnology shares. The fund’s managers believe all these firms will profit from an aging population stimulating higher spending by governments and individuals on health care, drugs and research. The fund’s top holdings include Gilead Sciences, Alexion Pharmaceuticals, Elan Corp. plc, Baxter International, Genentech Inc., Biomarin Pharmaceutical, Wyeth, Monsanto Co., Illumina and Cephalon. The fund’s MER is 2.70%. The $170.3 million fund lost 7.4% over the last year. TD Health Sciences Fund is still a buy.

RBC CANADIAN DIVIDEND FUND $46.18 (RBC Funds, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.royalbank.com. No load — deal directly with the bank) has 43.5% of its portfolio in Financial services stocks. It has a further 19.4% in Energy stocks and 6.5% in Consumer discretionary. The $9.6 billion RBC Canadian Dividend Fund’s top stock holdings are Royal Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank, Manulife Financial, Canadian Imperial Bank of Commerce, EnCana Corporation, Bank of Montreal, Sun Life Financial and Power Corporation. Over the last five years, RBC Canadian Dividend Fund has posted a 13.1% annual rate of return. That’s less than the S&P/TSX’s gain of 18.2% over the same period....

BMO DIVIDEND FUND $44.99 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ont., M5K 1J5, 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) currently holds about 36.3% of its portfolio in the Financial services industry. Its next-largest holdings are Energy at 24.4% and Consumer discretionary at 9.1%. BMO Dividend Fund’s largest holdings are Manulife Financial, Bank of Nova Scotia, CIBC, Royal Bank of Canada, Power Financial Corporation, Toronto-Dominion Bank, TransCanada Corporation, Imperial Oil, Suncor Energy, EnCana Corporation, Enbridge Inc., Husky Energy and Sun Life Financial. Over the last five years, the $5.2 billion BMO Dividend Fund has posted a 12.1% annual rate of return. That’s under the S&P/TSX’s gain of 18.2%. However, the S&P/TSX index held a high 40% or so of its holdings in Resources shares. That’s been one of the best-performing, although riskiest, sectors. The fund lost 5.6% over the last year, compared to a gain of 6.8% for the S&P/TSX index. BMO Dividend’s MER is 1.71%....

ISHARES CANADIAN SHORT BOND INDEX FUND $28.31 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through a broker) mirrors the performance of the DEX Short Term Bond Index. This index consists of a diversified range of investment grade federal, provincial, municipal and corporate bonds, with terms to maturity of between one and five years. Top issuers include the Government of Canada, Canada Housing Trust, RBC Capital Trust, the Province of Ontario and the Province of Quebec....

ISHARES CANADIAN BOND INDEX FUND $28.67 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through a broker) mirrors the performance of the DEX Universe Bond Index. This index consists of a diversified range of investment grade Canadian government and corporate bonds, with a term to maturity of more than one year. At last report, the bonds in the index were 41.5% Government of Canada bonds, 26.7% Provincial government bonds, 2.1% municipal bonds and 28.8% corporate bonds....

TRIMARK FUND $28.55 (CWA Rating:Conservative) (AIM Funds Management Inc., 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631-7008; Website: www.aimfunds.ca. Buy or sell through brokers) takes a value-seeking investment approach, and this cuts its risk. This fund sticks to the long-time Trimark Investments approach to stock-picking — buying high-quality investments and holding them for the long term. That Trimark Investments strategy eventually gives investors steady returns, with below-average risk. The $4.2 billion Trimark Fund’s top 10 holdings are Nestle SA (Swiss food & beverages), Nokia (Finnish mobile phones), Novartis AG (health care and pharmaceuticals), Reed Elsevier NV (Netherlands publishing & data), Grupo Televisa SA de CV (Mexican television & media), Anglo-Irish Bank Corp. (Irish banking), WPP Group plc (UK marketing & advertising), Adidas AG (German sporting goods & apparel), Willis Group Holdings (UK insurance) and Accor SA (French hotels & business services). Regionally, the fund’s portfolio is now distributed 28.9% in the U.S., 16.3% in the UK, 16.1% in Switzerland, 7.6% in Ireland, 7.0% in Germany, 5.3% in Finland and 3.9% in France. The MER for this fund from Trimark Investments is 1.62%....

SYMANTEC CORP. $14 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 839.1 million; Market cap: $11.7 billion; WSSF Rating: Average) has agreed to buy U.K.-based MessageLabs for $695 million in cash....

AMEREN CORP. $40 (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 209.5 million; Market cap: $8.4 billion; WSSF Rating: Average) provides electricity and natural gas to customers in Illinois and Missouri. The floods in the Midwest had little effect on Ameren. However, the company needs to spend about $1 billion in the next two years to upgrade some of its plants. About half of that will go to improving the environmental performance of its coal-fired power plants (coal accounts for 85% of its fuel needs). Ameren will probably recover most of these expenses through higher rates. Meanwhile, in the three months ended March 31, 2008, the company earned $0.64 a share (total $134 million) before one-time costs. That’s 8.6% less than the $0.70 a share ($145 million) it earned in the year-earlier quarter, mainly due to higher fuel costs. Revenue rose 5.0%, to $2.1 billion from $2.0 billion....

ALLIANT ENERGY CORP. $33 (New York symbol LNT; Income Portfolio, Utilities sector; Shares outstanding: 110.4 million; Market cap: $3.6 billion; WSSF Rating: Average) supplies electricity and natural gas to customers in Wisconsin, Iowa, Minnesota and Illinois. Recent flooding forced the company to suspend operations at two of its generating stations in Cedar Rapids, Iowa. Although insurance will help cover some of its losses, the company estimates the flood will cut its 2008 earnings by $0.20 a share. To put that estimate in perspective, Alliant earned $0.62 a share (total $68.1 million) in the first quarter of 2008, up 10.7% from $0.56 a share ($65.2 million) a year earlier. Revenue grew 8.7%, to $992.0 million from $912.7 million....

VERIGY LTD. $23 (Nasdaq symbol VRGY; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 60.2 million; Market cap: $1.4 billion; WSSF Rating: Extra risk) makes equipment that chipmakers like Intel, Texas Instruments and Nvidia use to test their products. Verigy’s products help its customers cut down on production errors, and improve their profits. The company designs its test systems itself, then hires a contract manufacturer to make its products. Verigy spends about 12% of its revenue of $12.80 a share on research. This spending has helped it develop testing systems for more complex chips, such as the “system-on-a-chip”, which concentrates a wide variety of functions onto a single chip. Use of this design is expanding, since it helps manufacturers cut costs. This design also uses less power and is more reliable than multiple chip configurations....

NVIDIA CORP. $12 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 554.7 million; Market cap: $6.7 billion; WSSF Rating: Average) specializes in 3D graphics chips for computers, video game consoles and other electronic devices. The company focuses on chip design, and outsources most of its production to chipmakers in Asia. Nvidia got as high as $40 in October 2007, but has dropped recently due to fears that a slowing economy will hurt computer sales. Strong price competition from chief rival Advance Micro Devices, which makes graphic chips under the ATI brand, could also hurt Nvidia’s profit margins. The company now feels its revenue in its second fiscal quarter ending July 27, 2008 will fall to between $875 million and $950 million, down from its earlier forecast of $1.1 billion....