acquisition

Aequus Pharmaceutical Inc. had no revenue in 2015, and the cost of testing its lead product may force it to sell more shares.

CAE INC., $16.00, Toronto symbol CAE, is a leading maker of flight simulators and operates pilot-training schools in over 30 countries. It also produces simulators for military aircraft as well as mannequins and other medical-simulators for training health professionals. The company earned $239.3 million in the year ended March 31, 2016. That’s up 18.9% from $201.2 million a year earlier. Earnings per share also jumped 17.1%, rising to $0.89 from $0.76, on more shares outstanding. If you exclude costs tied to its restructuring plan and a tax adjustment, CAE earned $0.86 a share for the fiscal year. That beat the consensus estimate of $0.84....

AIMIA INC., $7.45, symbol AIM on Toronto, owns and operates Aeroplan, Canada’s largest loyalty program. The plan has over 5 million members who collect Aeroplan miles from participating companies. They can exchange those miles for flights, but also car rentals, hotel rooms and merchandise. In the U.K., Aimia owns Nectar, that country’s biggest loyalty program. The company also has interests in Air Miles Middle East and Club Premier—the leading loyalty program in Mexico. In the three months ended March 31, 2016, the company’s revenue fell 13.6%, to $570.1 million from $660.1 million a year earlier. The decline was the result of the lower contribution from Nectar as well as the shutdown of the Nectar Italia program. Excluding one-time items, overall earnings per share fell 13.3%, to $0.13 from $0.15....

The global automotive industry has rebounded strongly in the wake of the 2008 financial crisis, which prompted the Canadian and U.S. governments to bail out General Motors and Chrysler.

Pent-up demand after the recent recession, improving U.S....

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Instead, rather than ―buy and hold‖, we prefer a “buy and watch closely” strategy....

A: Aequus Pharmaceuticals Inc., $0.45, symbol AQS on the TSX Venture Exchange (Shares outstanding: 44.9 million; Market cap: $20.2 million, www.aequuspharma.ca), is a Vancouver-based specialty pharmaceutical company. The company’s business model is to acquire or license what it sees as commercial or near-commercial products from drugmakers outside of Canada and then sell them in this country. For example, it hopes to sell Vistitan (bimatoprost 0.03%, ophthalmic solution) in the Canadian market. This product is used to treat some forms of glaucoma and other related eye diseases. Aequus and its partner plan to split the Canadian revenues. The company also aims to develop its own drugs. All of those medications are transdermal versions of existing medications. Transdermal applications of a drug are absorbed slowly through the skin, typically by using an adhesive patch....

SUNCOR ENERGY INC. $34 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $54.4 billion; Price-to-sales ratio: 1.8; Dividend yield: 3.4%; TSINetwork Rating: Average; www.suncor.com) is Canada’s largest integrated oil company. Oil production supplies about 40% of Suncor’s overall revenue. The remaining 60% comes from its four oil refineries (three in Canada and one in Colorado) and 1,500 Petro-Canada gas stations. Suncor gets 66% of its crude from its oil sands projects in northern Alberta. It gets a further 16% from the Syncrude oil sands project north of Fort McMurray. In March 2016, the company completed its all-stock acquisition of Canadian Oil Sands Ltd., which owns 36.74% of Syncrude. If you include Canadian Oil Sands’ debt of $2.6 billion, the total price was $7.1 billion. The company has now agreed to buy an additional 5.0% interest in Syncrude from Murphy Oil Corp. (New York symbol MUR). Suncor will pay $937 million when it completes the purchase in the next few weeks. That will raise its stake in Syncrude to 53.74%....

EMERA INC. $47 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 148.2 million; Market cap: $6.8 billion; Price-to-sales ratio: 2.5; Dividend yield: 4.0%; TSINetwork Rating: Average; www.emera .com) owns 100% of Nova Scotia Power, that province’s main electricity supplier. It also owns power utilities in the U.S. and the Caribbean. In September 2015, the company agreed to buy Teco Energy (New York symbol TE). This firm supplies electricity and natural gas to 1.05 million customers in Tampa Bay, Florida. A separate subsidiary distributes gas to 510,000 customers in New Mexico. Emera will pay $10.4 billion U.S., including Teco’s debt. It expects to complete the purchase in mid-2016....

The wildfires near Fort McMurray, Alberta, have forced Suncor and other oil sands producers to temporarily shut down their operations. The fires did not damage these facilities, which are surrounded by gravel fields and firebreaks. However, evacuation of the area does present staffing challenges. Suncor aims to restart production in the next few weeks. While the shutdown will weigh on the company’s earnings, it has also contributed to the recent rise in crude prices. That should help Suncor offset some of the lost revenue. Moreover, the company’s new projects and greater efficiency put it in a strong position to expand its long-term earnings and cash flow—even if oil prices remain at their current level....

EMERA INC. $47 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 148.2 million; Market cap: $6.8 billion; Price-to-sales ratio: 2.5; Dividend yield: 4.0%; TSINetwork Rating: Average; www.emera .com) owns 100% of Nova Scotia Power, that province’s main electricity supplier. It also owns power utilities in the U.S. and the Caribbean. In September 2015, the company agreed to buy Teco Energy (New York symbol TE). This firm supplies electricity and natural gas to 1.05 million customers in Tampa Bay, Florida. A separate subsidiary distributes gas to 510,000 customers in New Mexico. Emera will pay $10.4 billion U.S., including Teco’s debt. It expects to complete the purchase in mid-2016....