Search

NEWMONT MINING CORP. $51 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 434.7 million; Market cap: $22.2 billion; WSSF Rating: Average) is one of the world’s largest producers of gold. It also mines copper, silver and zinc. Newmont aims to increase its exposure to gold. Its Canadian subsidiary Franco-Nevada Corp. recently sold shares to the public, and used the proceeds to pay Newmont $1.3 billion in cash for certain mining and oil and gas royalty assets. Newmont will use the cash to fund its $1.5 billion acquisition of Canadian gold mining company Miramar Mining Corp. Miramar’s Hope Bay Project in northern Canada is one of the largest undeveloped gold deposits in North America....

WEYERHAEUSER CO. $65 (New York symbol WY; Conservative Growth Portfolio, Resources sector; Shares outstanding: 217.8 million; Market cap: $14.2 billion; WSSF Rating: Average) is a leading forest products company, with 6.4 million acres of timberland in the United States. It also has 30 million acres of leased timberland in Canada. The company recently agreed to sell its European engineered wood products operations for an undisclosed sum. The sale is part of Weyerhaeuser’s plan to focus on its core North American residential wood products business. It’s now exploring various options for its containerboard and packaging operations. Weyerhaeuser earned $0.55 a share (total $118 million) before unusual items in the three months ended September 30, 2007, down 42.1% from $0.95 a share ($236 million) a year earlier. The slowdown in the housing market has hurt demand for construction products. However, productivity gains improved earnings at its packaging business. Sales fell 8.8%, to $4.15 billion from $4.55 billion....

MOTOROLA INC. $10 (New York symbol MOT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 2.3 billion; Market cap: $23.0 billion; WSSF Rating: Above average) plans to introduce several new products to cut its reliance on cellphones, which now account for about half of its sales. For example, it plans to launch a hand-held bar code scanner for retail stores that wirelessly accesses product and inventory information. Motorola is also working on a device that shoppers can use to scan their own purchases inside supermarkets. Billionaire investor Carl Icahn, who owns about 3% of Motorola’s shares, wants the company to unlock value by spinning off its non-cellphone divisions. Promising new products such as these scanners enhance the appeal of these operations....

APACHE CORP. $91 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 332.7 million; Market cap: $30.3 billion; WSSF Rating: Average) explores for and produces oil and natural gas, mostly in North America. It also has operations in the North Sea, Egypt, Australia and Argentina. The company’s reserves are roughly half oil and half natural gas. Apache recently agreed to sell some of its smaller properties in the United States for $194.3 million. That will help the company fund a new investment in South America. Apache recently won the right to explore for oil on the Chilean side of the Tierra del Fuego chain of islands at the southern tip of South America. Apache plans to spend $18.3 million on the initial phase. The company owns 70% of a similar project on the Argentinian side of these islands, so its familiarity with this region helps lower the risk of this investment....

CHEVRON CORP. $81 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $170.1 billion; WSSF Rating: Above average) is the secondlargest oil company in the United States after ExxonMobil Corp. Internationally, it has operations in over 175 countries. Chevron hasn’t fully benefited from the recent rise in oil prices. Its refineries have had to pay more for crude oil, which has hurt profits at this division. Shutdowns for maintenance at some of its operations, as well as the partial nationalization of its assets in Venezuela, have also cut total output. As well, many countries have increased drilling and other taxes on foreign oil companies. In the three months ended September 30, 2007, earnings fell 23.6%, to $1.75 a share (total $3.7 billion) from $2.29 a share ($5.0 billion) a year earlier. However, revenue rose 1.8%, to $55.2 billion from $54.2 billion....

ENCANA CORP. $61 (New York symbol ECA; Conservative Growth Portfolio, Resource sector; Shares outstanding: 749.5 million; Market cap: $45.7 billion; WSSF Rating: Average) is a leading North American producer of natural gas (80% of production) and oil (20%). The company prefers to focus on unconventional properties such as early-stage gas developments and oil sands. These assets cost more to develop, at least initially, but should last much longer than conventional properties. EnCana recently paid $2.6 billion for the 50% of the Amoruso natural gas field in East Texas that it does not already own. It also plans to spend $2.1 billion to develop the field. The purchase is a good fit with En- Cana’s other properties in the region, and will increase its North American gas reserves by 10%....

INTERNATIONAL BUSINESS MACHINES CORP. $106 (New York symbol IBM; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.4 billion; Market cap: $148.4 billion; WSSF Rating: Above average) is the world’s largest supplier of computers and information services. It operates in over 170 countries. IBM has long been a leader in large, mainframe computers for corporations and governments. As well, in the past five years, IBM has expanded its services and software operations through the purchase of over 60 companies for $20 billion. The company is now the world’s second-largest software company after Microsoft Corp. IBM now gets over 50% of its revenue from services, which include designing and maintaining computer systems for its customers. Services also give IBM steady, long-term revenue streams, which helps cut the risk of these acquisitions....

YAMANA GOLD $15.33 (Toronto symbol YRI; SI Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 619.9 million; Market cap: $9.5 billion) recently completed the acquisition of Meridian Gold and Northern Orion for $4.5 billion in cash and stock. Yamana now has nine operating mines in Latin America, along with six development stage properties. It also holds exploration properties and land positions in all major mineral areas in the region. Yamana’s cash flow jumped in the three months ended September 30, 2007, to $105 million or $0.30 a share, from $14.6 million or $0.05 a share. (All figures except share price in U.S. dollars.) Revenues rose to $199.7 million from $50.3 million. The increases came from the start-up of new mines, including the Chapada mine in Brazil....

CENTERRA GOLD $13.85 (Toronto symbol CG; SI Rating: Speculative) (416-204-1953; www.centerragold.com; Shares outstanding: 216.3 million; Market cap: $3.0 billion) owns 100% of the large Kumtor gold mine in Central Asia and 95% of the Boroo gold mine in Mongolia. The two mines have proven reserves of over 7 million ounces. Centerra expects to report production from the two mines for 2007 of around 550,000 ounces. Cameco Corp. owns 40.5% of Centerra. Centerra’s main exploration prospect is the 62%-owned REN project in Nevada. Its partner there is Barrick Gold, which operates mines nearby. Its other prospect is the 100%-held Gatsuurt property in Mongolia. In the three months ended September 30, 2007, Centerra’s revenues rose 28.5%, to $98 million from $76.3 million. (All figures except share price in U.S. dollars.) Earnings were $0.02 a share, down from $0.05 a year earlier, mostly due to higher costs and an increased tax rate. Cash flow was $0.07 a share in the latest quarter, down from $0.10 a share....

EUROPEAN GOLDFIELDS $6.35 (Toronto symbol EGU; SI Rating: Speculative) (44 (20) 7408 9534; www.egoldfields.com; Shares outstanding: 178.6 million; Market cap: $1.1 billion) owns properties in Greece and Romania. The company is headquartered in the UK. European Goldfields holds a 95% interest in Hellas Gold, after its recent purchase of an additional 30% interest. 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. European Goldfields also owns 80% of the Certej gold/silver project in Romania, where it has completed a positive feasibility study, and applied for a mining permit....

IAMGOLD $9.19 (Toronto symbol IMG; SI Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 293.8 million; Market cap: $2.7 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. IAMGold also has development projects and exploration activities in Africa, as well as in North and South America....

ROYAL BANK OF CANADA $49 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $63.7 billion; SI Rating: Above average) is Canada’s largest bank, with assets of $600.3 billion. Royal has built up its operations in the United States in the past few years, mainly through acquisitions. The U.S. now accounts for about 15% of its total earnings. Despite its sizable American operations, Royal does not originate subprime mortgages. Securities backed by subprime mortgages and other risky loans account for less than 1% of its assets....

TORONTO-DOMINION BANK $66 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 717.8 million; Market cap: $47.4 billion; SI Rating: Above average) is Canada’s second-largest bank, with assets of $422.1 billion. In the fiscal year ended October 31, 2007, TD’s earnings rose 23.4%, to $5.75 a share (total $4.2 billion) from $4.66 a share ($3.35 billion) in 2006. These figures exclude several unusual items, including a $135 million after-tax gain on the Visa restructuring. Revenue rose 8.3%, to $14.3 billion from $13.2 billion. Despite its expanding operations in the United States, which now supply 8% of its earnings, TD’s exposure to U.S. subprime mortgages is minimal. TD’s bad loans remained unchanged in 2007 at 0.2% of total loans. It also cut its efficiency ratio to 59.6% from 62.4%....

BANK OF NOVA SCOTIA $47 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 984.0 million; Market cap: $46.2 billion; SI Rating: Above average) is the third-largest Canadian bank, with assets of $411.5 billion. Bank of Nova Scotia prefers to focus on developing markets, such as Asia and Latin America, for new growth. These areas give it a better opportunity to quickly improve its market share than more established countries like the U.S. The bank wrote down $191 million (pre-tax) worth of asset-backed securities in fiscal 2007. However, this was more than offset by a $202 million (pre-tax) gain from the Visa restructuring. That helped earnings grow to $4.01 a share (total $4.0 billion), up 13.0% from $3.55 a share ($3.6 billion) in 2006. Revenue rose 11.6%, to $12.5 billion from $11.2 billion....

BANK OF MONTREAL $57 (Toronto symbol BMO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 498.6 million; Market cap: $28.4 billion; SI Rating: Above average) is the fourth-largest Canadian bank, with $366.5 billion in assets. Bank of Montreal owns Harris Bank, a major bank in Chicago. Harris’s conservative lending policies have limited Bank of Montreal’s exposure to the problems in the U.S. mortgage market. However, Bank of Montreal still had to write down the value of asset-backed securities it holds by $211 million (after-tax) in fiscal 2007. Another problem for Bank of Montreal is its commodity trading operations, which lost $440 million (after-tax) on natural gas futures contracts. The bank is making progress cutting the risk of its trading operations, but further losses are possible....

CANADIAN IMPERIAL BANK OF COMMERCE $69 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 335.0 million; Market cap: $23.1 billion; SI Rating: Above average) is Canada’s fifth-largest bank, with assets of $342.2 billion. CIBC has the most exposure to the U.S. subprime mortgage market among the top five Canadian banks. It has already written down its holdings by about $1 billion. CIBC now faces a further $2 billion charge due to growing uncertainty over hedges it purchased from troubled U.S. bond insurer ACA Financial Guaranty Corp. to protect it from subprime losses. In 2005, CIBC paid $2.5 billion (after-tax) to settle Enron-related claims. If you exclude writedowns and a gain on the restructuring of the Visa credit card system, CIBC’s earnings in the year ended October 31, 2007 rose 27.3%, to $9.24 a share (total $3.1 billion) from $7.26 a share ($2.5 billion) in 2006. Revenue grew 6.6%, to $12.1 billion from $11.35 billion, due to strong growth at its retail banking division plus an acquisition....

HOME CAPITAL GROUP INC. $38 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.5 million; Market cap: $1.3 billion; SI Rating: Extra risk) is the parent company of Home Trust Company, a federally regulated trust company that specializes in residential first mortgages to small business owners, the self-employed and others who don’t meet the stricter criteria of larger, traditional lenders. Home Trust’s mortgage lending is primarily funded by retail deposits. Home Trust takes deposits in the form of short-term deposits, guaranteed investment certificates, registered retirement savings plans and registered retirement income funds. The trust earns money on the spread between the interest it receives from homeowners, and the interest it pays out to the buyers of these securities. The company operates just six branches in Ontario, Quebec, Nova Scotia, Alberta and British Columbia, so it gets most of its business through independent deposit and mortgage brokers....

SUN LIFE FINANCIAL $54.45 (Toronto symbol SLF; SI Rating: Above-average) offers savings, retirement, pension and life and health insurance products and services to individuals and corporations. The company operates mainly in Canada, the U.S. and the UK, and also in Asia, China and India. It has assets under administration of $427 billion. In the three months ended September 30, 2007, Sun Life’s earnings rose 6.7%, to $577 million or $1.02 a share, from $541 million or $0.94 a share a year earlier. Revenue fell 16.9%, to $3.5 billion from $4.2 billion, due to new accounting rules for investments. Sun Life’s shares yield 2.4%. Sun Life is still a buy.

GREAT-WEST LIFECO $34.93 (Toronto symbol GWO; SI Rating: Above-average) is a leading Canadian insurance company, with $404 billion in assets under administration. The company also provides wealth management and other financial services. It also operates in the U.S. and Europe. Power Financial controls about 75% of Great-West. Great-West’s earnings in the three months ended September 30, 2007 excluding one-time items rose 17%, to $558 million or $0.63 a share from $477 million or $0.54. Revenues rose 1.2%, to $6.64 billion from $6.57 billion. The shares yield 3.2%. Great-West closed the $3.9 billion U.S. acquisition of U.S.-based investment management firm and mutual fund company Putnam Investments Trust in August, 2007. The purchase more than doubled Great-West’s assets under administration. Great-West is also making a series of small acquisitions in the U.S. employer-sponsored health insurance market....

MANULIFE FINANCIAL $39.51 (Toronto symbol MFC; SI Rating: Above-average) sells life and other forms of insurance, as well as mutual funds and investment management services. It operates in 19 countries and territories worldwide. Manulife has assets under administration of $399 billion. In the three months ended September 30, 2007, Manulife’s earnings rose 9.9%, to $1.1 billion or $0.70 a share, from $967 million or $0.62 a share a year earlier. Revenue rose 11.3%, to $9.4 billion from $8.4 billion. Manulife has raised its dividend 9.1%, to $0.24 from $0.22. The shares now yield 2.2%. Manulife’s operations are diversified among life and health insurance, segregated mutual funds, and reinsurance. Its geographic diversification in the U.S. and Asia, including China, offers growth prospects....

AIC DIVERSIFIED CANADA FUND $44.27 (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 $1.4 billion fund’s 10 largest holdings are Power Financial, Canadian Oil Sands Trust, TD Bank, Shoppers Drug Mart, FedEx, Thomson Corporation, Brookfield Asset Management, Royal Bank of Canada, Manulife Financial and Royal Bank of Scotland. AIC Diversified Canada holds just 19 stocks. The fund holds 53.0% of its assets in Financial services stocks. The rest of the portfolio breaks down as follows: Consumer staples, 16.1%; Energy, 9.9%; Consumer discretionary, 7.4%; Health care, 7.0%; Industrials, 4.0%; and Conglomerates, 1.6%....

AIC AMERICAN ADVANTAGE FUND $6.20 (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: Life & health insurance, 19.5%; Diversified banks, 13.0%; Multi-line insurance, 12.8%; Property & casualty insurance companies, 12.6%; Investment banking & brokerage, 10.7%; Wealth management, 7.0%; Diversified financials, 6.5%; Thrifts & mortgage finance, 6.2%; Insurance brokers, 5.8%; Consumer finance, 5.7%; and Conglomerates, 0.4%. The $85.0 million AIC American Advantage’s top 10 holdings are Toronto-Dominion Bank, Prudential Financial, JP Morgan Chase, American International Group, Manulife Financial, AFLAC, Hartford Financial Services, Northern Trust, Merrill Lynch and Willis Group Holdings. This fund holds just 21 stocks....

TELUS CORP. $48.42 (Toronto symbol T.A; 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 September 30, 2007, Telus’s earnings per share excluding unusual items rose 10.5%, to $0.95 from $0.86 a year earlier. Revenue rose 4.5%, to $2.31 billion from $2.21 billion. Strong gains at its wireless and high-speed Internet operations offset lower local and long-distance revenues. The company recently raised its dividend rate by 20%. The new annual rate of $1.80 yields 3.1%. Recent auctions of new radio frequencies (or wireless spectrum) to let new cell phone firms such as Videotron and Shaw Cable enter the market will increase competition. Ottawa will also force incumbents like Telus to lease towers and other equipment to these new competitors for five years while they build their own networks....

TOYOTA MOTOR CORP. ADRs $106 (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADR’s outstanding: 1.6 billion; Market cap: $169.6 billion; WSSF Rating: Above average) reported that its North American sales in the six months ended September 30, 2007 rose 2.3%, due to strong demand for the new Tundra pickup truck and Prius hybrid compact. Sales grew 18% in Japan, and 8% in Europe. Consequently, Toyota’s six-month revenue rose 9.3%, to $101.0 billion from $92.4 billion a year earlier. Earnings improved 18.8%, to $4.86 per ADR from $4.09 per ADR. (Each Toyota American Depository Share represents two of Toyota’s common shares.) North America accounts for about 40% of Toyota’s sales. Toyota’s sales in North America will probably slow in the second half of 2008. Florida and California account for 25% of its U.S. sales, so falling housing prices in these markets could force Toyota to rely on special incentives to keep inventories down. However, rising sales in developing countries will help offset slowing North American sales. For example, Toyota currently has 5% of China’s car market, but it aims to double its market share by 2010....

HONDA MOTOR CO. LTD. ADRs $33 (New York symbol HMC; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.8 billion; Market cap: $59.4 billion; WSSF Rating: Above average) gets just over 50% of its revenue from North America, so it’s more vulnerable to a falling U.S. dollar than Toyota. In Honda’s latest six-month period, overall car sales rose 5.8%. Sales rose 5% in North America, 28% in Europe and 15% in Asia (excluding Japan, where sales fell 15%). Revenue grew 11.5%, to $49.5 billion from $44.4 billion a year earlier. Earnings per ADR rose 38.1%, to $1.74 from $1.26. (Each Honda American Depository Receipt represents one Honda common share.) Despite tougher conditions in the U.S., Honda’s new models should let it increase its current market share of 9.3%. Honda is also preparing to meet tougher U.S. fuel economy standards with new hybrid cars....