Alimentation Couche-Tard
MART RESOURCES $0.70 (Toronto symbol MMT; SI Rating: Speculative) (403-270-1841; www.martresources.com; Shares outstanding: 335.5 million; Market cap: $115.8 million; No dividends paid) is focused on developing, producing and drilling for oil at its onshore properties in Africa. Mart is currently producing oil from its 50%-held Umusadege field in Nigeria. Mart recently released preliminary results from its latest well at the field, the UMU-6 well. One section of the well flowed oil at 3,433 barrels per day. Average daily production for the entire Umusadege field was 3,886 barrels per day in latest quarter. Operating in Nigeria exposes the company to considerable political risk. However, further drilling success would continue to steadily increase Mart’s oil production....
DUNDEEWEALTH INC., $20.51, symbol DW on Toronto, has received a friendly takeover offer from Bank of Nova Scotia (Toronto symbol BNS), for the 82% of the company that the bank doesn’t already own. In September 2007, Bank of Nova Scotia paid $348 million for an 18% interest in DundeeWealth. The bank also gained a right of first refusal on any sale of the controlling interest in DundeeWealth. Bank of Nova Scotia is now offering 0.2497 of a Bank of Nova Scotia common share for each DundeeWealth common share. Plus, each DundeeWealth shareholder can choose to receive either $5.00 in cash or 0.2 of a $25.00, 3.70% five-year rate reset Bank of Nova Scotia preferred share for each DundeeWealth common share....
ALIMENTATION COUCHE-TARD $23.22 (Toronto symbol ATD.B: SI Rating: Extra Risk) (1-800-361-2612; www.couche-tard.com; Shares outstanding: 183.6 million; Market cap: $4.3 billion; Dividend yield: 0.7%) has dropped its $2-billion U.S. hostile takeover bid for Casey’s General Stores (symbol CASY on Nasdaq). Couche-Tard allowed its tender offer for all of Casey’s shares to expire at 5:00 p.m. on September 30. Couche-Tard, which was offering $38.50 U.S. a share, decided not to compete with convenience-store operator 7-Eleven’s offer of $40 a share, or $2.1 billion. Casey’s now trades at $42.24, which suggests that investors expect a still higher offer, even though Couche-Tard has dropped out of the bidding. Even without the takeover, we still like Couche-Tard’s growth prospects. Meanwhile, the company has enhanced its reputation as a disciplined bidder that does not overpay for acquisitions....
ALIMENTATION COUCHE-TARD INC., $22.47, symbol ATD.B on Toronto, has dropped its $2-billion U.S. hostile takeover bid for Casey’s General Stores (symbol CASY on Nasdaq). Couche-Tard allowed its tender offer for all of Casey’s outstanding shares to expire at 5:00 p.m. on September 30. Couche-Tard, which was offering $38.50 U.S. a share, decided not to compete with convenience-store chain 7-Eleven’s offer of $40 a share, or $2.1 billion. Casey’s now trades at $41.37, which suggests that investors expect a still higher offer, even though Couche-Tard has dropped out of the bidding. Even without the takeover, we still like Couche-Tard’s growth prospects. Meanwhile, the company has enhanced its reputation as a disciplined bidder that does not overpay for acquisitions....
MAJOR DRILLING, $27.04, symbol MDI on Toronto, jumped 10% this week after the company reported sharply higher results in the latest quarter. Major’s revenue jumped 75.2% in the three months ended July 31, 2010, to $109.5 million from $62.5 million a year earlier. The company earned $5.1 million, or $0.21 a share. A year earlier, it lost $3.3 million, or $0.14 a share. Cash flow was $12.1 million, or $0.51 a share, in the latest quarter, up 58.9% from $7.6 million, or $0.32 a share. Major expects to see a continued rebound during the rest of 2010. Gold prices are near all-time highs, base-metal prices are strengthening, and many mining companies have raised new funds for exploration....
METRO INC. $45 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 105.8 million; Market cap: $4.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.5%; SI Rating: Average) operates roughly 660 grocery stores in Quebec and Ontario. Its major banners include Metro, Metro Plus, Super C and Food Basics. As well, Metro operates 267 drug stores, including 81 inside its supermarkets. The company also owns roughly 23% of Alimentation Couche-Tard Inc. (Toronto symbol ATD.B), which operates over 6,000 convenience stores in Canada and the U.S. Couche-Tard is a recommendation of Stock Pickers Digest, our publication for aggressive investors. This investment accounts for about 5% of Metro’s annual earnings.
Big purchase still paying off
...
CANALASKA URANIUM, $0.09, symbol CVV on Toronto, plans to consolidate its shares on a 1-for-10 basis. That will lower its shares outstanding from about 171.9 million to 17.2 million. Companies typically cut back their shares to make them more attractive to institutional or other large investors who typically avoid stocks that trade for just pennies a share. Consolidations, or reverse stock splits, sometimes hurt investor confidence. They can undermine the value of a given holding by as much as 25%, at least temporarily, even though there is no change in the company’s business or assets. Other times, however, they have little, if any, effect....
AMERICAN WOODMARK $15.67, symbol AMWD on Nasdaq, is a major U.S. maker of cabinets for kitchens and bathrooms. It sells its cabinets under the American Woodmark, Timberlake and Shenandoah brands. In the three months ended July 31, 2010, American Woodmark lost $3.4 million, or $0.24 a share. Still, that’s a lot better than the $6.4 million, or $0.45 a share, it lost a year earlier. If you exclude one-time restructuring charges, the company would have lost $0.34 a share a year ago. Sales rose 8.4%, to $109.3 million from $100.8 million. The company’s recent cost cuts, including lower labour costs, were the main reason for the improved results. In the last year, American Woodmark has laid off a number of salaried employees, closed two less-efficient plants and suspended production at a third....
AMAZON.COM INC., $118.81, symbol AMZN on Nasdaq, reported sharply higher results in the latest quarter. In the three months ended June 30, 2010, Amazon’s sales jumped 41.2%, to $6.6 billion from $4.7 billion a year earlier. Earnings jumped 45.8%, to $207 million, or $0.46 a share, from $142 million, or $0.33 a share. Despite the big gain, the latest earnings fell short of the consensus estimate of $0.54 a share. Amazon’s North American media sales rose 15.3% during the quarter. Overall media sales climbed 17.7%, to $2.9 billion. However, sales of electronics and other general merchandise jumped 68.6% to $3.5 billion. Sales in the company’s “other” category, which includes Amazon’s web-services business, rose 45%, to $203 million....
REITMANS (CANADA) LTD. $19.45 (Toronto symbol RET.A; SI Rating: Extra Risk) (514-384-1140; www.reitmans.com; Shares outstanding: 68 million; Market cap: $1.3 billion; Dividend yield: 4.1%) owns 982 women’s clothing stores across Canada. The chain consists of 369 Reitmans, 165 Penningtons, 163 Smart Set, 124 Addition Elle, 76 Thyme Maternity, 66 RW & Co. and 19 Cassis stores. Reitmans continues to actively monitor its regional markets, and open and close stores as necessary. This year, it’s opening 30 new stores, closing 11 outlets and remodelling 30 stores.