amazon.com Inc.
NASDAQ symbol AMZN, is the leading bookseller on the Internet, as well as a leading video and music seller. It also has numerous other store categories, including electronics, computer games, toys and tools. Through Amazon Services, the company also offers programs that let sellers market on its web sites.
BANK OF NOVA SCOTIA, $49.23, Toronto symbol BNS, rose 3% this week after the bank reported higher earnings and revenue in its latest quarter. In the three months ended April 30, 2010, Bank of Nova Scotia earned a record $1.1 billion, or $1.02 a share. That’s up 25.8% from $872 million, or $0.81 a share, a year earlier. The latest earnings also beat the consensus estimate of $0.91 a share. Revenue rose 7.7%, to $3.9 billion from $3.7 billion. Most of the earnings increase came from the Canadian retail-banking division, which supplies 45% of the bank’s total earnings. This division’s profits jumped 42.4%, mainly because low interest rates spurred demand for mortgages and personal loans....
TECK RESOURCES LTD., $43.77, Toronto symbol TCK.B, earned a record $908 million in the three months ended March 31, 2010. That’s up 276.8% from $241 million a year earlier. Earnings per share rose 206.0%, to $1.53 from $0.50, on more shares outstanding. One-time items, including the sale of two gold mines in Turkey and a one-third interest in a B.C. hydroelectric dam, boosted the company’s earnings in the latest quarter. Without one-time items, Teck’s earnings would have fallen 4.2%, to $205 million from $214 million. Teck’s cash flow per share fell 42.5%, to $0.70 from $1.22. However, its revenue rose 13.8%, to $1.9 billion from $1.7 billion, largely because of rising copper prices....
AMAZON.COM $146.43 (Nasdaq symbol AMZN; SI Rating: Extra Risk) (206-266-1000; www.amazon.com; Shares outstanding: 445.5 million; Market cap: $65.2 billion; No dividends paid) has received approval from the federal government to open a $20-million distribution centre in Canada. In 2002, the government let Amazon open a Canadian web site, www.amazon.ca, but would not let the company build a warehouse because of concerns about foreign ownership of Canadian cultural industries. Right now, Canadian orders are handled in the United States, and shipped into the country through a subsidiary of Canada Post. The new warehouse should help Amazon cut its costs. That should let it gain market share in Canada by lowering the prices of its books and merchandise....
AMAZON.COM INC., $142.17, symbol AMZN on Nasdaq, has received approval from the Canadian government to open a distribution centre in Canada. In 2002, the government let Amazon open a Canadian web site, www.amazon.ca, but would not let the company build a warehouse because of concerns about foreign ownership of Canadian cultural industries. Right now, Canadian orders are handled in the United States, and shipped into the country through a subsidiary of Canada Post. Amazon will invest $20 million in the new warehouse. It has also promised to invest $1.5 million to promote Canadian culture and authors, and make more Canadian content available to users of its Kindle electronic-book reader....
INDIGO BOOKS & MUSIC INC. $18 (Toronto symbol IDG; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 24.5 million; Market cap: $441.0 million; Price-to-sales ratio: 0.5; Dividend yield: 2.2%; SI Rating: Average) will face stronger competition from online bookseller Amazon.com now that the federal government will let Amazon build a warehouse in Canada. This warehouse will lower Amazon’s distribution costs, and let it cut the prices of the books it sells though its Canadian web site. However, Indigo’s inventory and distribution costs have also fallen. That’s because it recently upgraded its computer systems. These savings should help it match any price cuts by Amazon. As well, its new Kobo e-book reader is cheaper than Amazon’s Kindle. Indigo is a buy.
BOMBARDIER INC., Toronto symbols BBD.A $5.87 and BBD.B $5.88, continues to win orders for new passenger railcars. This week, the company received an order for 49 additional railcars from France’s regional public-transit authority. That’s in addition to the transit authority’s previous order for 80 railcars. In all, the 129-car order is worth $1.6 billion (all amounts except share price in U.S. dollars). That’s equal to 8% of Bombardier’s annual revenue of $19.7 billion. The company will deliver these trains from June 2013 to mid-2016. As well, Bombardier has started building a new plant in China that will make fuselages for its new CSeries regional jets. The company is also building a new plant in Northern Ireland that will make the wings, and Bombardier will assemble the planes in Montreal. So far, Bombardier has 90 orders for the new plane, worth a total of roughly $7 billion. It will begin delivering the CSeries in 2013....
20-20 TECHNOLOGIES INC., $3.35, symbol TWT on Toronto, reported that its earnings jumped 158.1% in its latest quarter. In the three months ended January 31, 2010, the company earned $462,000, or $0.02 a share. A year earlier, it earned $179,000, or $0.01 a share (all figures except share price in U.S. dollars). Montreal-based 20-20 makes computer-aided design, sales, engineering and manufacturing software for clients in the interior-design and furniture industries. The company has customers in 100 countries, and markets software in 23 languages....
Members of our Inner Circle service often ask for investing advice on stocks they are thinking of buying that we don’t cover in our newsletters. A large number of these stocks fall into a grey area. Sometimes our investing advice is that they are “okay to hold,” but we wouldn’t advise buying them. When Inner Circle members ask about one of these companies, that’s what our investing advice would be: it’s “okay to hold.” However, when Inner Circle members ask about companies we think they should sell (or avoid if they don’t already own them), we say so. Here are three recent examples of our Inner Circle investing advice: Day4 Energy (symbol DFE on Toronto) designs and makes solar panels using its patented electrode technology and silicon cells....
Exchange-traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs, but you will quickly make these back because of the low management fees. Shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital-gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders....
INDIGO BOOKS & MUSIC INC. $16 (Toronto symbol IDG; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 24.5 million; Market cap: $392.0 million; Price-to-sales ratio: 0.3; Dividend yield; 2.5%; SI Rating: Average) is Canada’s largest bookseller. The company operates 96 superstores under the Indigo and Chapters banners. It also has 151 mall-based stores under the Coles, Indigo, Indigospirit, SmithBooks and The Book Company banners. Indigo continues to expand its Internet businesses. The company already sells books, music and movies through its web site, and it is becoming a leader in the fast-growing field of electronic books. It recently merged its shortcovers.com web site with a new downloading service called Kobo (an anagram of “book”). Indigo’s $5-million contribution gave it a 57.7% stake in Kobo.