acquisition

CHEMTRADE LOGISTICS INCOME FUND $19.98 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics .com; Units outstanding: 68.6 million; Market cap: $1.4 billion; Dividend yield: 6.0%) 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 March 31, 2015, the company’s revenue rose 22.5%, to $326.0 million from $266.1 million a year earlier. Big acquisition working out well...

Whitecap Resources, $13.36, symbol WCP on Toronto (Shares outstanding: 298.0 million; Market cap: $4.0 billion; www.wcap.ca), produces and explores for oil and natural gas in Western Canada. Oil makes up 74% of its daily output; the remaining 26% is gas. In the three months ended March 31, 2015, acquisitions increased Whitecap’s average daily production by 44.7%, to 38,351 barrels of oil equivalent from 26,508 a year earlier. The higher output offset sharply lower oil and gas prices, and Whitecap’s cash flow increased 8.9%, to $109.9 million from $100.9 million. However, cash flow per share fell 15.7%, to $0.43 from $0.51, as Whitecap issued more shares to pay for its acquisitions....

Long-term contracts support these high-yielding power firms that we like as two of the fastest growing stocks for conservative investors.

MAJOR DRILLING GROUP INTERNATIONAL INC., $6.37, symbol MDI on Toronto, is a large contract-drilling firm that mainly serves the mining industry. In the three months ended April 30, 2015, Major’s revenue fell 1.7%, to $81.2 million from $82.6 million a year earlier. The company narrowed its loss to $13.1 million, or $0.16 a share, from $24.9 million, or $0.31. However, the year-earlier period included $19.5 million of pre-tax restructuring charges. Major’s results could remain weak into next year, but its longer-term outlook is positive. As well, despite the significant industry downturn, the company is now reporting positive cash flow: its cash flow was $5.2 million, or $0.07 a share, in the latest quarter, compared to negative $3.3 million, or $0.04, a year earlier....

Thanks to a series of strategic acquisitions, Fortis’s assets have jumped from $4.6 billion in 2005 to $28.0 billion today. Expanding by acquisition is usually riskier than internal growth. That’s because new businesses often come with unexpected problems and costs that can offset the extra revenue and earnings they bring. Fortis cuts this risk by targeting established regulated utilities with predictable cash flows. The company plans to keep buying utilities that can benefit from its expertise, especially as today’s low interest rates cut its borrowing costs. At the same time, it’s investing in its current facilities, which will further spur its earnings growth....

INTEL CORP. $32 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 4.7 billion; Market cap: $150.4 billion; Price-to-sales ratio: 2.7; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.intel.com) has purchased Recon Instruments, a privately held Vancouver firm that makes heads-up displays for sports goggles and other specialized eyewear.

This is a small acquisition for Intel: the $175-million purchase price is just 9% of the $2.0 billion, or $0.41 a share, the chipmaker earned in the three months ended March 28, 2015. However, Recon’s technology will help Intel profit from rising sales of wearable devices, such as wristwatches that monitor heart rates and other biological data.

Intel is a buy.

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FEDEX CORP. $173 (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 283.8 million; Market cap: $49.1 billion; Price-to-sales ratio: 1.1; Dividend yield: 0.6%; TSINetwork Rating: Average; www.fedex.com) delivers packages and documents in the U.S. and 220 other countries through a fleet of 650 planes and 108,000 trucks and other ground vehicles.

The company recently agreed to buy TNT Express NV, a Netherlands-based courier that operates throughout Europe.

FedEx’s main rival, United Parcel Service (UPS), tried to buy TNT in 2012, but antitrust regulators rejected the deal because it would have given UPS too much of Europe’s courier market. Combined, FedEx and TNT would have about 17% of this business, so regulators will likely approve this purchase.

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WESTJET AIRLINES LTD., $26.53, symbol WJA on Toronto, has announced that its almost 3,000 flight attendants have voted 82% in favour of a five-year work agreement. The deal with the non-unionized Flight Attendant Association Board includes competitive wages, clearer work rules and a binding dispute mechanism. The agreement is important because it ends a unionization drive the flight attendants began over a year ago. The company has a great hidden asset in its non-union workforce, as many flyers find that WestJet provides friendlier service than they get from unionized airlines. The company also benefits from the fact that most of its employees are shareholders....

SNC-LAVALIN GROUP INC., $46.40, Toronto symbol SNC, gained 3% this week on speculation that larger engineering firms in Spain and Australia are interested in buying the company. The stock fell to $36.24 in March 2015 after the RCMP laid charges against SNC and two of its subsidiaries for using bribes to win construction contracts in Libya between 2001 and 2011. These are the same allegations that prompted the company to replace its senior executives in 2012 and bring in a new program to enforce ethical practices. SNC plans to fight these charges....

ALGONQUIN POWER & UTILITIES CORP. $9.58 (Toronto symbol AQN; Shares outstanding: 238.9 million; Market cap: $2.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.9%; www.algonquinpower.com) has nearly tripled in size over the past three years through acquisitions. It plans to expand further with more purchases. The company’s regulated utility businesses now provide water, electricity and natural gas to over 489,000 customers, up sharply from 120,000 three years ago. In addition, its hydroelectric, thermal energy, solar and wind facilities generate 1,150 megawatts, up from 460. Emera (Toronto symbol EMA), a recommendation of The Successful Investor, our conservative growth advisory, owns 21.0% of Algonquin....