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SAPUTO INC. $35 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; SI Rating: Average) is the largest dairy food processor in Canada. Its main brands include “Armstrong”, “Frigo” and “Stella”. Canada accounts for two-thirds of its revenue. Saputo also has dairy operations in the United States and Argentina. Saputo’s revenue fell from $3.5 billion in 2002 (fiscal years end March 31) to $3.4 billion in 2003, but grew steadily to $4.0 billion in 2006. Income rose from $1.54 a share (total $160.2 million) in 2002 to $2.20 a share ($232.1 million) in 2005. However, a writedown cut Saputo’s earnings in 2006 to $1.82 a share ($192.1 million). The company relies on acquisitions to fuel its growth. Although this adds to its risk, Saputo has a good history of quickly integrating new businesses and cutting their costs....

CANADA BREAD COMPANY, LTD. $61 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; SI Rating: Above average) is a leading supplier of fresh and frozen baked goods to supermarkets and restaurants. It also makes pastas and sauces. Its main brands include “Dempster’s”, “Tenderflake” and “Olivieri”. Canada Bread’s revenue rose from $678 million in 2001 to $1.35 billion in 2005, mainly due to its $262.3 million acquisition of the U.S. and UK bakery operations of Maple Leaf Foods Inc. (see below). Maple Leaf now owns 87.5% of Canada Bread. Earnings before restructuring costs jumped from $0.97 a share (total $36 million) in 2001 to $1.80 a share ($64 million) in 2002. Income fell to $1.61 a share ($63 million) in 2003, but grew to $2.62 a share ($99 million) in 2004, and to $3.07 a share ($111 million) in 2005....

MAPLE LEAF FOODS INC. $13 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; SI Rating: Average) is one of Canada’s largest food processing companies. It makes fresh and frozen meat products under the “Maple Leaf” and “Schneiders” brand names. It also supplies animal feeds and other agricultural services to farmers, and owns 87.5% of Canada Bread. The company’s revenue rose from $4.8 billion in 2001 to $5.1 billion in 2002, but slipped to $5.0 billion in 2003. In 2004, Maple Leaf paid $499 million for rival meat processing company Schneider Corp. Consequently, revenue grew to $6.4 billion in 2004, and to $6.5 billion in 2005. Income rose from $0.55 a share (total $57.4 million) in 2001 to $0.71 a share ($84.7 million) in 2002. Restructuring costs cut Maple Leaf’s profit in 2003 to $0.27 a share ($35.1 million), but income improved to $0.89 a share ($102.3 million) in 2004....

CAE INC. $8.65 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Above average) is a leading maker of full-size, computerized flight simulators. Airlines use these devices to train pilots to fly certain aircraft, and to prepare flight crews to handle emergencies. CAE also makes simulators for military aircraft, including fighter jets and helicopters. In 2001, the company began operating pilot-training facilities, which nicely complements its simulator business. CAE is now the world’s second-largest provider of pilot training services, with 22 facilities on four continents. Demand for these services should grow, since it’s cheaper for airlines to send pilots to CAE’s schools than to train them in-house. CAE gets about half of its revenue from civilian airlines, and half from military organizations. That helps cut its exposure to the highly cyclical air travel industry. Revenue from continuing operations fell from $1.01 billion in 2002 (fiscal years end March 31) to $938.4 million in 2004, mostly due to the drop in air travel after 9/11. Revenue grew to $986.2 million in 2005, and to $1.11 billion in 2006....

TIMBERWEST FOREST CORP. $14.30 (Toronto symbol TWF.UN; SI Rating: Speculative) is an income trust operating in the forest products industry. It is the largest owner of private forest lands in western Canada. To raise cash, TimberWest is selling land to real-estate developers, and selling non-core assets....

GATEWAY CASINOS INCOME FUND $15.07 (Toronto symbol GCI.UN; SI Rating: Speculative) operates the Burnaby Casino and Cascades Casino in Vancouver, B.C., the Palace Casino in Edmonton, Alberta and the Lake City Casinos in Kamloops, Kelowna, Penticton and Vernon, B.C....

CANWEL BUILDING MATERIALS INCOME FUND $3.76 (Toronto symbol CWX.UN; SI Rating: Speculative) is a Canadian national wholesale distributor of hardware, building materials and home renovation products. CanWel has struggled to meet its distributions despite buoyant housing and building markets....

GENERAL DONLEE INCOME FUND $4.90 (Toronto symbol GDI.UN; SI Rating: Speculative) makes precision-machined products for the military, commercial and general aerospace industries. The fund yields 13.5%. General Donlee is looking at several “strategic options” to boost value, including a restructuring or the sale of the entire fund....

ATLAS COLD STORAGE INCOME FUND $6.26 (Toronto symbol FZR.UN; SI Rating: Speculative) provides temperature-controlled storage and logistics services to processors, distributors, food service providers and retailers across North America. Growing losses forced Atlas to halt distributions in 2003....

NORANDA INCOME FUND $11.85 (Toronto symbol NIF.UN; SI Rating: Speculative) operates the CEZ processing facility in Salaberry-de-Valleyfield, Quebec. The fund currently yields 8.6%. The fund’s exposure to zinc prices and its lack of geographic diversification add to its risk....

ENERGY SAVINGS INCOME FUND $18.40 (Toronto symbol SIF.UN; SI Rating: Average) operates in Ontario, Manitoba, Alberta, Quebec, British Columbia, Illinois, and New York, selling natural gas to residential, small to mid-sized commercial, and small industrial customers under long-term, irrevocable fixed-price contracts....

WESTSHORE TERMINAL INCOME FUND $10.60 (Toronto symbol WTE.UN; SI Rating: Speculative) operates a coal storage and loading terminal at Roberts Bank, B.C. The trust yields 10.2%. Coal shipped from the mines owned by the Elk Valley Coal Partnership accounts for 90% of Westshore’s revenues....

CONSUMERS’ WATERHEATER INCOME FUND $13.62 (Toronto symbol CWI.UN; SI Rating: Speculative) owns a portfolio of approximately 1.3 million installed water heaters, rented primarily to residential customers in Ontario. The units currently yield 8.7%. A lot of the fund’s growth comes from installations in newly built homes....

ROGERS SUGAR INCOME FUND $4.15 (Toronto symbol RSI.UN; SI Rating: Speculative) is the leading refiner, processor, distributor and marketer of sugar products in western Canada. The fund has a current yield of 9.7%. Rogers Sugar is vulnerable to weather conditions affecting sugar beet production and prices....

THE DUN & BRADSTREET CORP. $68 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; WSSF Rating: Average) provides credit reports and other information on over 100 million companies in 200 countries. These reports help lenders and purchasers make better business decisions, which cuts their risk. Dun & Bradstreet’s earnings have grown at 17% compounded yearly over the past five years, compared to 26.5% for Moody’s. Consequently, its stock trades at a lower p/e— 17.4 times its 2006 profit estimate of $3.90 a share. However, we feel Dun & Bradstreet has great long-term growth potential as world trade grows....

MOODY’S CORP. $53 (New York symbol MCO; Conservative Growth Portfolio, Finance sector; WSSF Rating: Average) provides credit ratings on bonds and other securities issued by roughly 200,000 commercial and government entities in over 100 countries. The company has about 40% of the global credit rating market. It also sells credit risk management software to financial institutions. Moody’s stock has dropped roughly 25% in the past three months. Investors fear that rising interest rates will cut interest in new debt securities, particularly those related to the home mortgage industry. It now trades at 26.0 times its forecasted 2006 earnings of $2.08 a share. The $0.28 dividend yields 0.5%. The company is currently one of five companies designated by the SEC to provide credit ratings on new securities. Issuers can speed up the registration process if they have a credit rating above a certain level....

MCGRAW-HILL COMPANIES INC. $49 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Average) is a leading publisher of school textbooks. It also publishes BusinessWeek magazine and several trade journals, and owns four TV stations. However, it gets roughly two-thirds of its profits from its Standard & Poor’s subsidiary, which provides credit ratings and opinions on a variety of investments. Institutional investors rely on these ratings to select investments. The stock rose from $44 in July 2005 to $60 in March 2006, but has moved down recently on fears that weakness in global stock markets will hurt Standard & Poor’s revenue growth. Fears of lower advertising revenue at its magazine and TV business have also weighed on the stock....

DOW JONES & CO. $34 (New York symbol DJ; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Above average) publishes The Wall Street Journal and Barron’s magazine. It also owns several smaller publications, and provides newswire and specialized information services. The company has suffered in this decade, like all publishers, from fiercer competition for ads. Its profits have stagnated in the past five years, although sales have risen from $1.56 billion in 2002 to a likely level of $1.9 billion or so this year. The stock now trades at 30.9 times its forecast 2006 profit of $1.10 a share. The $1.00 dividend yields 2.9%. Dow Jones is doing a good job of controlling its costs, which gives it more cash to expand faster- growing businesses such as Internet sites. Its latest restructuring plan should save it $15 million a year, mainly by streamlining management and outsourcing more administrative functions....

YUM! BRANDS INC. $49 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; WSSF Rating: Average) operates around 32,000 fast food restaurants in over 100 countries. That’s more outlets than McDonald’s (see box on page 62), although McDonald’s generates higher annual sales. The company owns about 25% of these restaurants, and franchisees own the rest. It aims to sell more of its U.S. outlets to franchisees in the next few years, which would cut its overall risk. Yum prefers to own stores in developing countries, however, at least until local managers learn the business. Yum gets most of its sales and profits from three main banners: KFC (chicken); Pizza Hut; and Taco Bell (Mexican food). It also operates the smaller A&W (hamburgers) and Long John Silver’s (seafood) chains....

AGRIUM INC. $26 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; SI Rating: Average) is a leading supplier of fertilizers and agricultural chemicals. The company uses natural gas to make its nitrogen-based fertilizers, which account for roughly 40% of its revenue and profits. Agrium also makes fertilizers from potash and phosphate, which come primarily from mines it operates in Western Canada. The ongoing resources boom should eventually spread to the agriculture industry, and spur fertilizer demand and Agrium’s profits....

SHAWCOR LTD. $17 (Toronto symbol SCL.A (old symbol SCL.SV.A); Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) makes sealants that protect oil pipelines from corrosion. Thanks to rising energy prices, ShawCor’s earnings from continuing operations in the first quarter of 2006 rose 32.0%, to $0.33 a share from $0.25. Revenue rose 6.1%, to $257.7 million from $242.9 million. The company recently completed a major contract to coat an underwater pipeline in the North Sea. But the company’s growing reputation is helping it win new contracts, particularly in Asia....

CANADIAN PACIFIC RAILWAY LTD. $55 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) also profits from the resources boom, since products such as coal, fertilizers and forest products account for a third of its freight revenue. The company is vulnerable to higher fuel prices, but so are its competitors, and it can pass much of the extra cost along to its customers. Recent investments in new locomotives and track have improved its fuel-efficiency by 5.6% in the past five years. Greater fuel efficiency also gives CP an advantage over trucking firms....

FINNING INTERNATIONAL INC. $38 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Above average) profits from rising oil and mineral prices, since it sells, rents and services Caterpillar brand heavy equipment to energy exploration and mining companies. Finning earned $0.63 a share (total $56.9 million) in the first quarter of 2006, up 50% from $0.42 a share ($37.4 million) a year earlier. If you exclude gains on the sale of assets, it would have earned $0.53 a share in the most recent quarter, up 26.2%. Revenue rose 7.8%, to $1.24 billion from $1.15 billion. Finning gets half its revenues from its UK and South American operations, and the rising Canadian dollar cut its revenue growth in the quarter by $88 million....

TORSTAR CORP. $21 (Toronto symbol TS.B (old symbol TS.NV.B); Conservative Growth Portfolio, Consumer sector; SI Rating: Above average) is one of Canada’s top media companies. It’s best known as the publisher of The Toronto Star, the largest daily newspaper in Canada. It also publishes over 150 daily and weekly newspapers in Southern Ontario. Newspapers account for roughly two-thirds of the company’s revenue, and around 55% of its profit. The rest comes from wholly owned Harlequin Enterprises Ltd., the world’s largest publisher of romance fiction titles. Torstar’s revenue grew slowly, from $1.42 billion in 2001 to $1.57 billion in 2005. These figures exclude revenue from discontinued businesses. In 2001, the company earned just $0.04 a share (total $3.0 million), mainly due to unusual items. Income in 2002 rose to $1.64 a share (total $125.3 million), but slipped to $1.59 a share ($123.5 million) in 2003. Restructuring costs cut Torstar’s 2004 profit to $1.42 a share ($112.7 million). In 2005, earnings improved to $1.52 a share ($118.8 million)....

IVY CANADIAN FUND $29.46 (CWA Rating: Conservative) invests in high-quality, largecapitalization stocks. The $4.8 billion fund’s top holdings include Shoppers Drug Mart, Yellow Pages Income Fund, Manulife Financial, Danaher Corp., Reckitt Benckister plc, Bank of Nova Scotia, Canadian National Railway, Loblaw, Imperial Oil and Omnicom Group. Ivy Canadian’s breakdown by industry is: Consumer staples, 26.9%; Financials, 21.6%; Consumer discretionary, 12.8%; Industrials, 12.7%; and Energy, 6.6%. Ivy Canadian made 8.4% annually over the last 10 years, compared to the S&P/TSX’s gain of 10.9%. The fund’s MER is 2.44%. It holds a high cash level of 9%....