acquisition
Our outlook on blue chip stock Manitoba Telecom as its shares begin to recover in the wake of a strategic review and network upgrades.
ENERFLEX LTD. $11.23 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 79.0 million; Market cap: $924.9 million; Dividend yield: 3.0%) rents and sells equipment and services for natural gas production, including compression and processing plants, refrigeration gear and power generators.
On June 30, 2014, the company closed its $431- million U.S. acquisition of two businesses owned by privately held Axip Energy Services: an international contract compression and processing subsidiary and a division that provides aftermarket services.
In the three months ended June 30, 2015, Enerflex’s revenue fell 8.3%, to $389.7 million from $424.9 million a year earlier. But earnings per share more than doubled, to $0.34 from $0.15. International contributions from the Axip businesses pushed up earnings and almost offset weaker revenue in the U.S. and Canada. However, falling oil and gas prices are now hurting the company’s orders.
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On June 30, 2014, the company closed its $431- million U.S. acquisition of two businesses owned by privately held Axip Energy Services: an international contract compression and processing subsidiary and a division that provides aftermarket services.
In the three months ended June 30, 2015, Enerflex’s revenue fell 8.3%, to $389.7 million from $424.9 million a year earlier. But earnings per share more than doubled, to $0.34 from $0.15. International contributions from the Axip businesses pushed up earnings and almost offset weaker revenue in the U.S. and Canada. However, falling oil and gas prices are now hurting the company’s orders.
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CHEMTRADE LOGISTICS INCOME FUND $18.83 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics.com; Units outstanding: 69.0 million; Market cap: $1.3 billion; Dividend yield: 6.3%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base metal processors, whose operations create sulphur, acid and other by-products. Chemtrade converts these substances into useful chemicals, like sulphuric acid.
In the three months ended June 30, 2015, Chemtrade’s revenue rose 9.3%, to $338.8 million from $310.1 million a year earlier. The gain mainly came from the higher U.S. dollar, which increased the contribution from its operations in that country.
The trust’s overall cash flow rose 5.3%, to $47.0 million from $44.6 million, but cash flow per share declined 8.1%, to $0.68 from $0.74, on more shares outstanding.
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In the three months ended June 30, 2015, Chemtrade’s revenue rose 9.3%, to $338.8 million from $310.1 million a year earlier. The gain mainly came from the higher U.S. dollar, which increased the contribution from its operations in that country.
The trust’s overall cash flow rose 5.3%, to $47.0 million from $44.6 million, but cash flow per share declined 8.1%, to $0.68 from $0.74, on more shares outstanding.
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INTACT FINANCIAL $92.22 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $12.2 billion; Dividend yield: 2.3%) is Canada’s largest provider of property and casualty insurance. Its brands include Intact Insurance, Canada BrokerLink and belairdirect.
In the three months ended June 30, 2015, Intact’s revenue rose 6.0%, to $2.34 billion from $2.21 billion a year earlier. Revenue improved across all of the company’s insurance lines and geographic regions. Its $197-million acquisition of Canadian Direct Insurance in early 2015 also added to its sales. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C.
Earnings rose 1.9%, to $210 million, or $1.56 a share, from $206 million, or $1.53. Intact continues to write more-profitable insurance policies and cut its operating costs.
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In the three months ended June 30, 2015, Intact’s revenue rose 6.0%, to $2.34 billion from $2.21 billion a year earlier. Revenue improved across all of the company’s insurance lines and geographic regions. Its $197-million acquisition of Canadian Direct Insurance in early 2015 also added to its sales. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C.
Earnings rose 1.9%, to $210 million, or $1.56 a share, from $206 million, or $1.53. Intact continues to write more-profitable insurance policies and cut its operating costs.
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ACI WORLDWIDE $22.65 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative)(402- 390-7600; www.tsainc.com; Shares outstanding: 117.8 million; Market cap: $2.7 billion; No dividends paid) reported revenue of $265.8 million in the three months ended June 30, 2015, up 4.3% from $254.8 million a year earlier. The company earned $0.26 a share, up sharply from $0.12. Cost-cutting measures helped improve the latest quarterly results.
ACI’s growth by acquisition has increased its goodwill and intangible assets to $1.0 billion, or a high 37.0% of its market cap.
The company is well positioned to benefit from the global shift toward online payments. However, the stock trades at a high 30.2 times ACI’s forecast 2015 earnings of $0.75 a share. Any major problems integrating its acquisitions could sharply cut that estimate.
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ACI’s growth by acquisition has increased its goodwill and intangible assets to $1.0 billion, or a high 37.0% of its market cap.
The company is well positioned to benefit from the global shift toward online payments. However, the stock trades at a high 30.2 times ACI’s forecast 2015 earnings of $0.75 a share. Any major problems integrating its acquisitions could sharply cut that estimate.
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INTACT FINANCIAL CORP., $90.20, symbol IFC on Toronto, is Canada’s largest provider of property and casualty insurance, based on premiums. Its brands include Intact Insurance, Canada BrokerLink and belairdirect. In the three months ended June 30, 2015, Intact’s revenue rose 6.0%, to $2.34 billion from $2.21 billion a year earlier. Revenue improved across all of the company’s insurance lines and geographic regions. The early 2015 acquisition of Canadian Direct Insurance for $197 million also added to sales. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C. Earnings rose 1.9%, to $210 million, or $1.56 a share, from $206 million, or $1.53. Intact continues to write more profitable insurance policies and cut its operating costs....
GENUINE PARTS CO. $88 (New York symbol GPC; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 152.3 million; Market cap: $13.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.8%; TSINetwork Rating: Average; www.genpt.com) gets 53% of its sales and 55% of its earnings by selling replacement auto parts: Genuine operates 1,100 outlets under the NAPA banner, and its distribution business serves 4,900 independent stores in North America, Australia and New Zealand. The company also distributes industrial parts (31% of sales, 29% of earnings), office products (12%, 11%) and electrical equipment (4%, 5%). As the economy improved after the 2008/09 recession, the company’s sales rose 36.9% from $11.2 billion in 2010 to $15.3 billion in 2014. Overall earnings jumped 49.6%, from $475.5 million to $711.3 million. Per-share profits gained 53.7%, from $3.00 to $4.61, on fewer shares outstanding....
RESTAURANT BRANDS INTERNATIONAL INC. $43 (www. rbi.com) earned $0.30 a share in the three months ended June 30, 2015, up 25.0% from $0.24 a year earlier. These figures exclude costs related to Burger King Worldwide’s December 2014 acquisition of Tim Hortons....
At first, the Trans-Pacific trade pact could hinder dairy producer Saputo, a top growth stock for us. But we like its long-term prospects.
ALIMENTATION COUCHE-TARD $57.58 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard.com; Shares outstanding: 567.4 million; Market cap: $32.7 billion; Dividend yield: 0.4%) completed its $1.7-billion acquisition of The Pantry in March 2015. The move added 1,500 convenience stores in 13 southern U.S. states, bringing Couche-Tard’s total to 7,848 locations throughout North America. In Europe, the company operates 2,230 stores across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic states (Estonia, Latvia and Lithuania) and Russia. In the three months ended April 26, 2015, Couche-Tard’s sales fell 18.6%, to $7.29 billion from $8.95 billion a year earlier (all figures except share price in U.S. dollars)....