Search

AT&T INC. $29 (New York symbol T; Income Portfolio, Utilities sector; Shares outstanding: 5.9 billion; Market cap: $171.1 billion; WSSF Rating: Average) provides traditional local and long-distance telecommunication services to over 59 million customers in 22 states. It also has 73 million wireless subscribers nationwide, and 14.7 million high-speed Internet customers. Unlike Verizon, AT&T gets just half of its earnings from its wireless business. However, demand for its wireless services is growing strongly. That’s partly due to AT&T’s exclusive deal to sell Apple’s iPhone. AT&T offers the iPhone at a discount to entice customers to sign a long-term contract. As part of a new deal with Apple, AT&T will now pay more to subsidize the initial cost of the latest version of the device. However, the new iPhone can access the Internet and receive email much more quickly than the older version. Rising revenues from Internet use should help AT&T offset the higher subsidies....

EUROPEAN GOLDFIELDS $3.06 (Toronto symbol EGU; SI Rating: Speculative) (44 (20) 7408 9534; www.egoldfields.com; Shares outstanding: 179.4 million; Market cap: $548.9 million) holds a 95% interest in Hellas Gold. Hellas owns three gold and base metal deposits in Northern Greece. The deposits are the Stratoni zinc/ lead/silver property, the Olympias gold/zinc/lead/silver project and the Skouries copper/gold property. Production started at Stratoni in September 2005. Permits to develop the Skouries and Olympias projects are moving steadily forward. European Goldfields also owns 80% of the Certej gold/silver project in Romania, where it has completed a positive feasibility study, and applied for environmental approval and a mining permit. The company also owns 51% of a joint venture developing a goldcopper project in northeastern Turkey....

IAMGOLD $5.94 (Toronto symbol IMG; SI Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 295.6 million; Market cap: $1.8 billion) has interests in eight operating gold mines: 100% of the Mupane gold mine in Botswana, 38% of the Sadiola gold mine and 40% of the Yatela gold mine, both located in Mali, 18.9% interests in both the Tarkwa and Damang gold mines in Ghana, 100% of the Doyon mine and the Sleeping Giant mine, both in Quebec, and 100% of the Rosebel mine in Suriname, South America. IAMGold also a 1% royalty interest in the Diavik diamond mine in northern Canada and 100% of the Niobec niobium mine in Quebec. It has development projects and exploration activities in Africa, as well as in North and South America. The company reported a sharp rise in cash flow in the three months ended June 30, 2008, to $70.5 million or $0.24 a share, from $23 million or $0.08 a share (All figures except share price and market cap in U.S. dollars.) Revenues rose 34.5%, to $225.1 million from $167.3 million, largely due acquisitions....

NEW GOLD $4.20 (Toronto symbol NGD; SI Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 212.1 million; Market cap: $891.0 million) is the result of the merger completed on June 30, 2008 of three companies: Peak Gold, symbol PIK on Toronto, Metallica Resources, symbol MR on Toronto, and New Gold, symbol NGD on Toronto. New Gold operates three mines: the Peak gold/ copper mine in Australia, the Cerro San Pedro gold/ silver mine in Mexico and the Amapari gold mine in Brazil. New Gold expects to produce 297,000 ounces of gold in 2008 and 350,000 ounces in 2009. The company also has $319 million in cash to expand production at the Amapari mine, to develop the El Morro gold/copper mine in Chile and to develop the gold/ silver/copper Afton mine in British Columbia....

YAMANA GOLD $9.99 (Toronto symbol YRI; SI Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 699.5 million; Market cap: $7.0 billion) owns and operates seven operating mines in five countries in North and South America, along with interests in two others plus five development stage properties. It also holds extensive exploration properties. Yamana’s revenues in the three months ended June 30, 2008 rose 83.5%, to $336.9 million from $183.7 million a year earlier. (All figures except share price and market cap in U.S. dollars.) Last year’s acquisitions of Meridian Gold and Northern Orion Resources accounted for most of the increase. Cash flow rose 94.1%, to $176.5 million from $90.9 million. However, cash flow per share was unchanged at $0.26 due to a 93.3% rise in shares outstanding following the acquisitions. Excluding onetime items, earnings per share fell 31.8%, to $0.15 from $0.22....

STORNOWAY DIAMOND CORP. $0.22 (Toronto symbol SWY; SI Rating: Start-up) (1-888-338-2200; www.sornowaydiamonds.com; Shares outstanding: 227.2 million; Market cap: $50.0 million) holds interests in over 14 diamond exploration properties in Canada and one in Botswana. TSE-listed Agnico-Eagle holds a 17.7% interest in the combined company. Global mining giant Rio Tinto Limited holds an 11.2% interest. Stornoway’s projects include a 50% interest in the Renard diamond project in Quebec, which has the potential to become Quebec’ s first diamond mine. Bulk sampling has produced promising carat-grade recoveries. The project is now in the pre-feasibility stage to define a total resource estimate. Renard is the company’s most advanced project, but close behind is the Aviat project on the Melville Peninsula in the eastern Arctic. This project is a joint venture between Stornoway (90%) and Hunter Exploration (10%). The partners have discovered 12 kimberlites at the Aviat project. Early results have shown high sample grades of diamonds....

DIAMONDS NORTH RESOURCES $0.60 (Toronto symbol DDN; SI Rating: Start-up) (1-866-802-2010; www.diamondsnorthresources.com; Shares outstanding: 74.4 million; Market cap: $44.7 million) has interests in 10 projects covering over eight million exploration acres in Nunavut and the Northwest Territories. Its prospects range from early to advanced-stage exploration. Diamonds North’s leading prospect is its 100%- held Amuruk project in Nunavut. To date, the company has discovered 22 kimberlites, of which drilling on two has produced microdiamonds and some macrodiamonds. Diamonds North is now conducting bulk samples on the property to test for a higher-percentage of more commercially viable macro-diamonds. The company is also at an advanced stage with its Hepburn project in the Northwest Territories, where it has identified over 200 drilling targets. Diamonds North’s other active project is on Banks Island in the Northwest Territories, where airborne surveys have identified a number of anomalies that it believes are kimberlite pipes. De Beers Canada is active in the area....

CANADIAN NATIONAL RAILWAY CO. $55 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 473.4 million; Market cap: $26.0 billion; SI Rating: Above average) operates a freight rail network across Canada, and in parts of the U.S. In the three months ended June 30, 2008, CN’s earnings fell 11.0%, to $459 million from $516 million a year earlier. Per-share earnings fell just 5.9%, to $0.95 from $1.01, on fewer shares outstanding. The company’s U.S. operations supply about 20% of its revenue, and the high value of the Canadian dollar cut CN’s earnings in the latest quarter by $0.05 a share. Revenue grew 3.5%, to $2.1 billion from $2.0 billion a year earlier. Higher volumes of grain, coal and petrochemicals helped offset lower shipments of lumber and automobiles. CN’s operating ratio weakened to 66.3% from 60.0% a year earlier, due to higher fuel costs. CN’s earnings should grow to $3.49 a share in 2008, and the stock trades at 15.8 times that estimate. The $0.92 dividend yields 1.7%....

CANADIAN PACIFIC RAILWAY LTD. $61 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 155.1 million; Market cap: $9.5 billion; SI Rating: Above average) transports freight over a rail network between Montreal and Vancouver. It also connects to major hubs in the United States. Due to rising fuel costs and lower shipments of automobiles and forest products, CP’s earnings in the second quarter of 2008 fell 13.4%, to $0.97 a share from $1.12 a year earlier. These figures exclude non-recurring items. Revenue was unchanged at $1.2 billion. CP’s operating ratio (regular operating costs divided by revenue — the lower, the better) rose to 79.4% from 74.7%. The company now aims to improve its long-term efficiency by increasing average train speeds, sharing more tracks with other railways and reducing waiting times in terminals....

DUNDEE CORP. $13 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 74.6 million; Market cap: $969.8 million; SI Rating: Average) is a holding company with subsidiaries in three main areas: wealth management, real estate and resources. Its main asset is its 49% stake (63% voting interest) in DundeeWealth Inc., which offers wealth management services and owns the Dynamic family of mutual funds. DundeeWealth manages $63.1 billion worth of assets. DundeeWealth recently completed its purchase of a 60% interest in Toronto-based pension fund manager Aurion Capital Management. It also acquired an 89% interest in BHR Fund Advisors, a Philadelphia-based mutual fund manager and distributor. The two purchases broaden Dundee- Wealth’s investment management capabilities, and diversify its sales distribution network. In the three months ended June 30, 2008, Dundee Corp.'s earnings fell sharply, to $0.08 a share from $0.20 a year earlier. Revenue fell 8.5%, to $286.1 million from $312.6 million....

HOME CAPITAL GROUP INC. $35 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.5 million; Market cap: $1.2 billion; SI Rating: Average) is the parent company of Home Trust Company, a federally regulated trust company. It provides financial services such as chequing accounts, mortgages and credit cards. Home Capital is more risky than Great-West and IGM Financial. That’s because it focuses on customers that usually have trouble meeting the stricter lending requirements of larger banks. But we feel its strong growth prospects help offset this risk. The company now aims to spur its growth by offering traditional mortgages. While that puts it in direct competition with the big banks, Home Capital feels this move will strengthen its position among mortgage brokers....

IGM FINANCIAL INC. $45 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 263.5 million; Market cap: $11.9 billion; SI Rating: Above average) is Canada’s largest independent mutual fund company, with $118.2 billion in assets under administration. Power Corp. controls 55.9% of IGM’s shares. The company has three main divisions. Investors Group sells funds through its own network of over 4,000 financial advisors. Mackenzie Financial sells its funds through independent brokers. IGM also owns 74.5% of IPC Financial, whose 540 advisors provide a range of wealth management services. IGM recently agreed to buy Saxon Financial Inc. for $287 million. Saxon provides wealth management services to individuals and institutions, and had $13.4 billion in assets under management at June 30, 2008. Saxon’s exclusive relationship with the Canadian Medical Association, holders of 30% of Saxon, also adds to its appeal....

GREAT-WEST LIFECO INC. $32 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 894.4 million; Market cap: $28.6 billion; SI Rating: Above average) is Canada’s largest insurance company, with assets under administration of $392.8 billion. The company also provides retirement planning and wealth management services. Power Corp. controls 70.6% of Great-West’s shares. The company recently sold its U.S. health care business for $1.3 billion. This business faces strong competition from larger insurers, whose size lets them negotiate better terms with medical service suppliers, so selling it made sense. The cash will help Great- West fund last year’s purchase of struggling U.S.-based mutual fund manager Putnam Investment Trust. Putnam increases Great-West’s exposure to volatile stock markets. However, the acquisition gives it an opportunity to market its products to Putnam’s large client base....

TELUS CORP. (Toronto symbols T $40 and T.A $39; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 335.6 million; Market cap $13.4 billion; SI Rating: Above average) provides local and long distance telephone service to 4.3 million customers in Alberta, British Columbia and Eastern Quebec. This business supplies about 29% of Telus’s revenue. The company also operates a national wireless communication network with 5.8 million subscribers. The wireless business accounts for 47% of its revenue. The remaining 24% of Telus’s revenue comes from providing Internet service to individuals and businesses. It has 1.1 million high-speed Internet subscribers....

AIC DIVERSIFIED CANADA FUND $42.87 (CWA Rating: Conservative) mainly holds shares of Canadian companies of average or above-average quality. It also holds stocks of some U.S. firms. The $1.0 billion fund’s 10 largest holdings are Power Financial, Canadian Oil Sands Trust, TD Bank, Shoppers Drug Mart, FedEx, Thomson Reuters Corporation, Brookfield Asset Management, Royal Bank of Canada, Manulife Financial and Johnson & Johnson. AIC Diversified Canada holds just 17 stocks. The fund holds 49.6% of its assets in Financial services stocks. The rest of the portfolio breaks down as follows: Energy, 15.2%; Consumer staples, 10.6%; Consumer discretionary, 8.0%; Health care, 7.4%; Industrials, 3.6%; and Conglomerates, 2.3%....

AIC AMERICAN ADVANTAGE FUND $5.70 (CWA Rating: Aggressive) (AIC Group of Funds, 1375 Kerns Road, Burlington, Ont., L7R 4X8, 1-800-263-2144; Web site: www.aicfunds.com. Buy or sell through brokers) invests mostly in U.S. stocks, with over 99% of assets in the financial services area. The fund’s holdings in this segment break down as follows: Property & casualty insurance companies, 20.9%; Life & health insurance, 15.0%; Multi-line insurance, 14.5%; Investment banking & brokerage, 12.5%; Diversified financials, 9.1%; Diversified banks, 9.0%; Wealth management, 7.7%; and Consumer finance, 7.1%. The $48.9 million AIC American Advantage’s top 10 holdings are AEC Limited, AFLAC, Hartford Financial Services, Prudential Financial, JP Morgan Chase, Wells Fargo, American Express, American International Group, Merrill Lynch & Co. and The Progressive Corporation. This fund holds just 17 stocks....

H&R REAL ESTATE INVESTMENT TRUST $17.88 (Toronto symbol HR.UN; SI Rating: Extra risk) holds interests in 34 office properties, 124 industrial properties and 129 retail properties comprising over 43 million square feet. Over half of H&R’s properties are in the Greater Toronto Area. The rest are elsewhere in Ontario, in Quebec, western Canada and the United States. The company now has an industry-leading portfolio occupancy rate of 99.2%. Revenue in the three months ended June 30, 2008 was $151.3 million, up 6.1% from $142.5 million a year earlier. Cash flow per unit was unchanged at $0.40. H&R’s annual distribution of $1.44 gives the units a yield of 8.1%. H&R REIT is a buy.

CANADIAN REIT $29.30 (Toronto symbol REF.UN; SI Rating: Extra Risk) owns a portfolio of more than 150 income properties consisting of retail, industrial and office properties across Canada and in the Chicago, Illinois area. Occupacy is at 96.7%. CREIT’s revenue in the three months ended June 30, 2008 was $73.1 million, up 10.2% from $66.4 million a year earlier. Cash flow per unit rose 5.7%, to $0.56 from $0.53. The units yield 4.6%. CREIT focuses on acquiring properties in prime locations, usually near major metropolitan centres, that attract strong tenants, maintain high occupancy rates and deliver a reliable stream of rental income....

RIOCAN REAL ESTATE INVESTMENT TRUST $21.51 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT. RioCan has ownership interests in a portfolio of 227 retail properties across Canada, including 15 under development. These properties contain over 59 million square feet of leasable area. Portfolio occupancy stands at 97.0%. RioCan’s revenue in the three months ended June 30, 2008 was $169.9 million, up 7.1% from $158.3 million a year earlier. Cash flow per unit rose 5.3%, to $0.40 from $0.38. RioCan’s annual distribution of $1.35 gives the units a yield of 6.2%. RioCan is still a buy.

IBM $118.34 (New York symbol IBM; SI Rating: Above average) is the world’s biggest supplier of computers and information processing services. The company’s shift over the past few years into higher margin computer services and software is paying off. Revenues rose 12.8% in the three months ended June 30, 2008, to $26.8 billion from $23.8 billion a year earlier. Earnings rose 22.3%, to $2.8 billion from $2.3 billion. Earnings per share rose 28.7%, to $2.02 from $1.57, on fewer shares outstanding from share buybacks. IBM has increased its stock repurchase authorization by $15 billion. The company aims to buy back $12 billion worth of its stock in 2008, or about 8% of its market cap....

FORDING CANADIAN COAL TRUST $92.55 (Toronto symbol FDG.UN; SI Rating: Average) — recently accepted a cash-and- stock offer from Teck Cominco worth about $96 a unit. The deal should close in October, 2008. Note though that unlike most takeovers, Revenue Canada will treat the entire proceeds as ordinary income....

H&R REAL ESTATE INVESTMENT TRUST $17.88 (Toronto symbol HR.UN; SI Rating: Extra Risk) holds interests in 34 office properties, 124 industrial properties and 129 retail properties comprising over 43 million square feet. Over half of H&R’s properties are in the Greater Toronto Area. The rest are elsewhere in Ontario, in Quebec, western Canada and the United States. The company has an industry-leading portfolio occupancy rate of 99.2%. Revenue in the three months ended June 30, 2008, was $151.3 million, up 6.1% from $142.5 million a year earlier. Cash flow per unit was unchanged at $0.40. H&R’s annual distribution of $1.44 gives the units a yield of 8.1%. H&R REIT is a buy....

CINTAS CORP. $31 (Nasdaq symbol CTAS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 153.7 million; Market cap: $4.8 billion; WSSF Rating: Average) sells and rents uniforms to over 800,000 businesses in the United States and Canada. Uniforms and other business supplies such as entrance mats, mops and hygiene products account for 85% of Cintas’s revenue. The remaining 15% comes from a variety of other business services. These include first aid kits, fire extinguishers and smoke alarms, and document storage and shredding services. Cintas’s stock fell to around $25 in July 2008 due to fears that the recent downturn will prompt businesses to curtail spending on uniforms and other supplies. Rising fuel prices have also increased Cintas’s delivery costs....

FAIR ISAAC CORP. $23 (New York symbol FIC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 48.5 million; Market cap: $1.1 billion; WSSF Rating: Average) makes software that helps banks and businesses calculate the likelihood that a borrower will pay back a loan. Despite new competition, its FICO scoring system is still an industry standard. The subprime mortgage crisis has hurt the banks and other financial institutions that supply roughly half of Fair Isaac’s revenue. These customers may cut back on software spending in the near term. However, over the longer term, the subprime crisis will likely increase demand for Fair Isaac’s reliable credit-scoring software....

BROADRIDGE FINANCIAL SOLUTIONS INC. $20 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 140.3 million; Market cap: $2.8 billion; WSSF Rating: Extra risk) offers services to the investment industry in three main areas: investor communications; securities processing; and transaction clearing. These services help financial services institutions and public companies improve their efficiency and customer service. Despite volatile investment industry conditions, Broadridge continues to expand. It recently paid an undisclosed sum for Investigo Corp., which provides accurate and timely data to wealth management firms. This helps them better manage client portfolios, and comply with various securities regulations. Broadridge’s earnings in the fiscal year ended June 30, 2008 rose 2.4%, to $218.5 million from $213.3 million in the prior year. Earnings per share rose 1.3%, to $1.55 from $1.53, on more shares outstanding. These figures exclude unusual items. Revenue rose 3.3%, to $2.21 billion from $2.14 billion....