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TELUS CORP. $40.47 (Toronto symbol T.A; Shares outstanding: 335.6 million; Market cap: $13.6 billion; SI Rating: Above average) provides local and long distance telephone service in B.C., Alberta and parts of Quebec, and wireless service across Canada. In the three months ended June 30, 2008, Telus’s earnings per share excluding unusual items rose 13.7%, to $0.83 from $0.73 a year earlier. Revenue rose 7.7%, to $2.4 billion from $2.2 billion. Strong gains at its wireless and high-speed Internet operations offset lower local and long-distance revenues. Telus’s shares yield 4.5%. Recent auctions of new radio frequencies (or wireless spectrum) will let new cell phone firms enter the market. These include Quebecor, European and Egyptian-backed Globalive and Data & Audio-Visual Enterprises Wireless, a firm controlled by Canadian businessman John Bitove. Just 60% of Canadians use a cellphone, so there’s still room for growth in the industry. As well, Telus’s strong reputation for customer service and its focus on more affluent users and long-term customers should help it expand its wireless profits....

RBC CANADIAN EQUITY FUND $19.69 (CWA Rating: Conservative) (RBC Mutual 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) invests mostly in larger-capitalization stocks, but also looks for opportunities in small- and mid-cap stocks. The fund’s 10 largest holdings are Royal Bank, Manulife, EnCana, TD Bank, Potash Corp., Bank of Nova Scotia, Canadian Natural Resources, Suncor Energy, Research in Motion and BCE Inc. The $4.2-billion fund holds 41.3% of its holdings in resource stocks. It also holds 30.7% in finance. Over the last ten years, RBC Canadian Equity posted a 9.5% annual rate of return. That’s just under the S&P/TSX’s gain of 9.7%. The fund lost 14.9% over the last year, compared to the loss of 14.4% for the S&P/TSX. The fund’s MER is 1.96%....

FEDEX CORP. $58 (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 311.2 million; Market cap: $18.0 billion; WSSF Rating: Average) provides door-to-door delivery of packages and documents in the United States and to over 220 other countries. The slowing economy has hurt demand for FedEx’s domestic delivery services. As well, customers are switching from overnight delivery to FedEx’s slower and less expensive ground service. However, international volumes continue to grow. In its first fiscal quarter ended August 31, 2008, FedEx’s revenue rose 8.4%, to $10.0 billion from $9.2 billion a year earlier....

THE STANLEY WORKS $33 (New York symbol SWK; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 78.6 million; Market cap: $2.6 billion; WSSF Rating: Average) makes a wide variety of hand and power tools for consumer and industrial users. The tool business exposes Stanley to the cyclical home construction, renovation and automotive repair industries. However, the company is successfully expanding its building security operations, which now account for 35% of its revenue and 45% of earnings. Steady revenue streams from the security business should let Stanley keep paying its $1.28 dividend, which yields 3.9%. In July, 2008, Stanley acquired Canadian-based Xmark Corp. for $48 million. Xmark makes radio frequency tags that help locate people and property. The company also paid $278 million for Sonitrol Corp., which provides security monitoring services to businesses in North America. These purchases should add $140 million to Stanley’s annual revenue....

SNAP-ON INC. $37 (New York symbol SNA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 57.4 million; Market cap: $2.1 billion; WSSF Rating: Average) makes hand and power tools for auto mechanics. Like Genuine Parts, Snap-On should benefit from slowing new car sales and rising demand for repair and maintenance services. It also sells its products through a fleet of franchised vans that visit garages. This way, dealers can form long-term relationships with their customers. That gives it an advantage over competitors, and should help it keep paying its $1.20 dividend (3.2% yield). Snap-On is also expanding overseas, which cuts its exposure to a slowing North American economy. It recently paid $15.1 million for 60% of a Chinese company that makes hand tools. Foreign operations now supply roughly 40% of Snap-On’s revenue....

GENUINE PARTS CO. $35 (New York symbol GPC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 161.8 million; Market cap: $5.7 billion; WSSF Rating: Average) distributes automotive replacement parts to over 4,800 independent outlets in North America. It also operates over 1,100 auto parts stores under the NAPA banner. As well, the company distributes industrial parts, office furniture and electrical equipment. Genuine Parts has increased its dividend for 52 consecutive years. The current rate of $1.56 a share yields 4.5%. The stock has moved down from $50 in November, 2007. That’s partly due to its exposure to the slowing automotive industry, which accounts for half of its revenue and earnings. However, a drop in new car sales is good news for Genuine Parts. As more drivers choose to maintain their current vehicles instead of buying new ones, demand for replacement parts is likely to rise....

BRIGGS & STRATTON CORP. $14 (New York symbol BGG; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 49.8 million; Market cap: $697.2 million; WSSF Rating: Above average) is the world’s largest maker of engines for lawnmowers. It also makes other home and garden equipment such as pressure washers and snow blowers. Rising costs for gasoline and food have cut consumer spending on discretionary items such as gardening equipment. A colder-than-usual spring season also hurt sales. However, the company is doing a good job controlling costs as it cuts production to meet demand. As well, Hurricanes Gustav and Ike prompted increased sales of portable generators. Briggs should be able to keep paying its $0.88 dividend, which now yields 6.3%. Meanwhile, Briggs reported a loss for its first fiscal year ended September 30, 2008 of $0.04 a share (total $2.0 million). That’s a big improvement over the $0.42 a share ($20.8 million) it lost in the year-earlier quarter. Due to the seasonal nature of its lawnmower and gardening equipment businesses, Briggs usually loses money in its first quarter....

QUAKER CHEMICAL CORP. $17 (New York symbol KWR; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.6 million; Market cap: $180.2 million; WSSF Rating: Average) makes lubricants and specialty chemicals that protect industrial machinery from corrosion. The company recently raised its quarterly dividend for the first time since 2004, from $0.215 a share to $0.23. The new annual rate of $0.92 yields 5.4%. Quaker uses oil to make its products, so it gains from the recent drop in prices. However, the company’s prominent share of the narrow market it operates in makes it easier for it to pass along higher raw material costs to its customers. That should also help Quaker maintain the current dividend rate....

WELLS FARGO & CO. $31 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 3.3 billion; Market cap: $102.3 billion; WSSF Rating: Average) provides a wide variety of financial services to nearly eight million customers through roughly 6,000 branches and offices in 23 states. Internationally, it operates in Canada, the Caribbean and Central America. Warren Buffett’s Berkshire Hathaway holding company owns 9% of Wells Fargo’s shares. The company has now agreed to acquire WACHOVIA CORP. $5.71 (New York symbol WB, Conservative Growth Portfolio, Finance sector; Shares outstanding: 2.2 billion; Market cap: $12.6 billion; WSSF Rating: Extra risk). Wachovia stockholders will receive 0.1991 of a Wells Fargo common share for each Wachovia share they hold. The merger will make Wells Fargo one of the largest banks in the United States, with over 10,000 branches in 39 states and $713 billion in U.S. deposits ($787 billion in total deposits). It also gives Wells Fargo its first operations in the Atlantic Seaboard and southeastern U.S....

SHAWCOR LTD. $17 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 71.0 million; Market cap: $1.2 billion; SI Rating: Average) makes sealants and coatings that protect onshore and offshore oil and natural gas pipelines from corrosion. Thanks to high oil prices and a surge in new pipeline construction, ShawCor’s stock jumped to $40 in October, 2007. However, the stock has moved down since then, partly due to the rise in the Canadian dollar. Overseas markets account for about 75% of ShawCor’s revenue, and a strong dollar hurts the contribution of these foreign operations to the company’s overall earnings. As well, rising raw material and labour costs have also weighed on its profit growth. In the second quarter of 2008, earnings fell 24.4%, to $0.31 a share (total $22.2 million) from $0.41 a share ($30.3 million) a year earlier. Revenue rose 6.8%, to $295.1 million from $276.4 million. The higher Canadian dollar cut revenue in the latest quarter by $12.9 million....

SNC-LAVALIN GROUP INC. $33 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $5.0 billion; SI Rating: Average) is a leading engineering and construction company. North America supplies 60% of its revenue. SNC’s stock hit a new peak of $62 in June, 2008. That was partly due to its strong second-quarter earnings. In the three months ended June 30, 2008, SNC’s earnings jumped 83.3%, to $75.4 million from $41.1 million a year earlier. Earnings per share rose 81.5%, to $0.49 from $0.27. However, the big increase was mainly due to the costly bankruptcy of a key supplier to its power plant operations in the year-earlier quarter. Revenue crept up to $1.70 billion from $1.69 billion. The company’s expertise is helping it win new contracts, particularly in overseas markets. For example, SNC has agreed to build a new airport in Libya’s second-largest city for $500 million. It’s also expanding its overseas operations through acquisitions of small engineering firms. SNC recently paid an undisclosed sum for two Romanian engineering companies that specialize in industrial and public infrastructure projects....

LINAMAR CORP. $9.00 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 67.1 million; Market cap: $603.9 million; SI Rating: Extra risk) is Canada’s second-largest maker of automobile parts after Magna International Inc. It specializes in precision-machined components, assemblies and systems for the North American and European car and truck markets. The stock has dropped from $17 in June, mainly due to slowing North American car and truck sales. That has hurt demand for its transmissions and other auto parts, which provide about 85% of its sales. However, the company’s recent expansion in China and Europe helps cut its exposure to the North American auto industry. For example, Linamar recently paid an undisclosed sum for a plant in Wales. This is the company’s 38th plant, and first in the UK....

GENNUM CORP. $6.65 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.6 million; Market cap: $236.7 million; SI Rating: Above average) makes equipment that lets broadcasters store, manipulate and transport video signals without losing picture quality. This business accounts for 80% of Gennum’s total sales. The remaining 20% comes from making chips that improve the speed and reliability of transmissions in computer networks. The company continues to enjoy the benefits of its recent restructuring, which included selling its slow-growing hearing aid and headset businesses. In its third fiscal quarter ended August 31, 2008, it earned $0.18 a share (total $6.4 million) compared to a loss of $0.04 a share ($1.5 million) a year earlier (all amounts except share price and market cap in U.S. dollars). However, the year-earlier quarter included a $0.04 a share ($6.8 million) loss from discontinued operations. Sales in the quarter rose 31.4%, to $33.5 million from $25.5 million, partly due to an acquisition. Gennum also continues to successfully launch new products. Research spending in the latest quarter rose to 28.1% of sales, up from 22.4% a year earlier....

TRANSCANADA CORP. $36 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 578.0 million; Market cap: $20.8 billion; SI Rating: Above average) operates over 59,000 km of pipelines that transport natural gas, mainly from Alberta to markets in central and eastern Canada. The company also operates gas pipelines in the United States and Mexico. This business supplies 55% of TransCanada’s total revenue. The remaining 45% comes from its electrical power operations. TransCanada owns or holds interests in over 20 power plants in Canada and the United States. TransCanada continues to expand its power business. This includes its investment in the partnership that runs Ontario’s Bruce nuclear power plant. TransCanada owns 31.6% of the Bruce B complex, which consists of four working reactors....

Among other bargain stocks, we’ve discovered a diversified Canadian food processing company whose brands have a lot of enduring value, and whose core business, meat processing, represents 70 percent of total sales. We figure that no matter what the economy does, people will always need to eat. So, we doubt that consumer spending on groceries will decline very much. The key for smart, conservative investors is to be in food company bargain stocks that have sound fundamentals. ----------...

CANADIAN PACIFIC RAILWAY LTD. $65 (Toronto symbol CP; SI Rating: Average) transports freight over a rail network between Montreal and Vancouver. In the United States, subsidiaries connect CP’s Canadian lines to major hubs in the Midwest and Northeast. Alliances with other railways extend its reach to Mexico. In the three months ended June 30, 2008, CP’s revenue was unchanged at $1.2 billion. The lower U.S. dollar and lower shipments of automobiles and forest products slowed revenue growth. Earnings before one-time items fell 13.4%, to $0.97 a share from $1.12. CP’s profits dropped, despite steady revenues, partly from costs related to the U.S. Midwest flooding, but mostly due to higher fuel costs. However, by the end this year, CP expects to have provisions in all of its contracts to let it pass on fuel price increases. It also aims to improve long-term efficiency with several new initiatives, including sharing more tracks with other railways, as well as better scheduling....

IVY ENTERPRISE FUND $4.23 invests in small and medium-sized companies. The $139.9 million fund has an MER of 2.38%. The fund’s overall choice of stocks doesn’t inspire our confidence. Its top holdings are Richie Brothers Auctioneers, National Instruments, CH Robinson Worldwide, Idexx Laboratories, Hibbett Sports, Astral Media, Canadian Western Bank, Daktronics Inc., Henry Schein and Stratasys Inc. The fund has lost 6.8% over the last year. We think investors can do better by buying some of the other small-cap funds we recommend in Canadian Wealth Advisor....

IVY CANADIAN FUND $24.81 (CWA Rating: Conservative) invests in high-quality, large capitalization stocks. The $2.6 billion fund’s top holdings include Shoppers Drug Mart, Toronto-Dominion Bank, Manulife Financial, Canadian National Railway, Becton Dickinson & Co., Enbridge, McDonald’s Corp., Thomson Reuters, Imperial Oil and Nestle SA. Ivy Canadian’s breakdown by industry is: Consumer staples, 30.4%; Financials, 18.8%; Consumer discretionary, 13.5%; Energy, 10.9%; Industrials, 9.7%; Health care, 6.7%; and Information technology, 4.7%....

IVY EUROPEAN FUND $12.72 (CWA Rating: Aggressive) holds mostly good quality stocks, although it has underperformed the longer-term benchmark Morgan Stanley indexes. We don’t see any reason to hold a mutual fund that concentrates in Europe. If you want European exposure, consider Ivy Foreign Equity Fund (see above), or the closed-end EUROPEAN EQUITY FUND $7.11 (New York symbol EEA; CWA Fund Rating: Conservative). European Equity Fund sells for an 18% discount from the current value of its assets. European Equity Fund is a buy. Ivy European Fund is a sell.

IVY FOREIGN EQUITY FUND $26.81 (CWA Rating: Conservative) outperformed the Morgan Stanley benchmark international index over the last 10 years. The fund gained 5.0%, and that was better than the Morgan Stanley benchmark’s gain of 1.7%. Ivy Foreign Equity Fund lost 2.2% over the last year. The fund invests in companies based outside of Canada, but cuts risk by avoiding direct investment in emerging markets. Ivy Foreign Equity is one of our top foreign fund recommendations. Still, we think non-U.S. international funds should make up at most 10% of the holdings of a conservative investor. The fund’s top holdings are PepsiCo (U.S. food & beverage), Reckitt Benckiser plc (UK household & healthcare products), McDonald’s Corp., Synthes Inc. (Swiss health care equipment), Walgreen Co. (U.S. pharmacies), Diageo plc (UK alcoholic beverages), Becton Dickinson (U.S. medical technology), Nestle SA, Henry Schein Inc., (U.S. healthcare) and Danaher Corp. (U.S. tools & controls)....

IVY GROWTH AND INCOME FUND $20.21 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor St. West, Toronto, Ont. M5S 3B5. 1-800-387-0780; Web site: www.mackenziefinancial.com. Load fund — available from brokers) is a balanced fund, holding a mixture of stocks, bonds and cash. The fund has returned 5.7% annually for the 10 years. It lost 0.8% over the last year. The fund’s MER is 2.09%. The fund’s top stock holdings are Shoppers Drug Mart, Manulife Financial, Enbridge, Canadian National Railway, McDonald’s Corporation, Thomson Reuters Corp., Toronto-Dominion Bank and Imperial Oil. The $2.4 billion Ivy Growth & Income Fund holds 22% of its assets in bonds. Interest rates on bonds are now under 5% annually in Canada. That’s the total return that a bond can provide, from today until it matures. However, bonds leave investors at the mercy of inflation, which shrinks the purchasing power of all fixed-return investments. In fact, an upsurge in inflation could wipe out all returns on bonds, and some of their principal besides....

TEMPLETON EMERGING MARKETS FUND $15.32 (New York symbol EMF; CWA Fund Rating: Speculative) is a closed-end fund that invests in equities from emerging economies. The fund’s manager is Franklin Templeton. Templeton Emerging Market Fund provides broad geographic diversification. Although volatile, it provides access to fast-growing economies such as Brazil, China, India and others. The $445.4 million fund’s regional allocation is Asia (58.2%), Europe (18.7%) and Latin America (23.1%)....

NEW GERMANY FUND $10.41 (New York symbol GF; CWA Fund Rating: Speculative) is a closed-end fund that invests mostly in middle-market (small and mid-cap) German equities. The fund’s manager is Deutsche Asset Management. The $378 million fund’s 51 holdings are currently in Germany (95%) and the Netherlands (5%). The New Germany Fund’s focus on mid-tier German stocks provides investors with access to some of Germany’s fastest-growing companies. The New Germany Fund’s top holdings are K+S (chemicals), 12.9%; Fresenius (health care equipment & supplies), 6.0%; SGL Carbon (electrical equipment), 4.7%; Salzgitter (metals & mining), 4.2%; Q-Cells (solar cell manufacturing), 3.9%; GEA Group (chemicals), 3.8%; Bilfinger Berger (construction & engineering), 3.3%; Stada Arzneimittel (pharmaceuticals), 3.0%; European Aeronautical Defense (Dutch-based aerospace and defense), 2.9%; and United Internet (Internet service provider), 2.6%....

KOREA FUND $15.09 (New York symbol KF; CWA Fund Rating: Speculative) is a closed-end fund that invests at least 80% of its assets in Korean equities. Currently, 99% of its assets are in South Korean stocks. The fund’s manager is RCM Asia Pacific. The fund’s top holdings are Samsung Electronics at 9.1%; Posco (steel), 6.5%; KT&G Corporation (cigarette maker), 4.3%; Shinhan Financial, 3.7%; Daewoo International (computers & peripherals), 3.4%; KT Corporation (telecommunications), 3.3%; Dongkuk Steel Mill, 3.3%; Hyundai Engineering & Construction, 3.1%; Samsung C&T Corporation (engineering & construction), 3.1%; and Hynix Semiconductor (computer chips, formerly Hyundai Electronics), 3.0%. The industry exposure of the 38 stocks in the Korea Fund’s $467.3 million portfolio is as follows: Industrials, 25%; Information technology, 17%; Financial services, 15%; Materials, 11%; Consumer staples, 11%; Telecommunications services, 8%; Health care, 3%; Consumer discretionary, 3% and Energy, 1%....

CENTRAL EUROPE AND RUSSIA FUND $30.15 (New York symbol CEE; CWA Fund Rating: Speculative) is a closed-end fund that invests mostly in larger cap stocks from Russia and central Europe. The fund’s manager is Deutsche Asset Management International. The $940 million fund’s 67 holdings are currently invested in Russia (59%), Poland (20%), Turkey (7%), Czech Republic (5%) and Hungary (4%). Central Europe and Russia Fund’s top holdings are Gazprom (a Russian gas utility) at 11.4%; Lukoil (Russian oil and gas), 8.0%; Rosneft Oil Company (Russian oil and gas), 6.2%; Powszechna Kasa Oszczednosci (Polish bank), 5.4%; MMC Norilsk Nickel (Russian metals and mining), 5.2%; Cez (Russian electric utility), 5.2%; Bank Pekao (Polish bank), 4.9%; Sberbank (Russian bank), 4.9%; KGHM Polska Miedz (Polish metals & mining), 3.5%; and Telekomunikacja Polska (Polish telecom), 3.1%....