amazon

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. ...

Akamai Technologies Inc., $25.18, symbol AKAM on Nasdaq (Shares outstanding: 171.3 million; Market cap: $4.3 billion), helps companies improve the performance of their web sites. Its customers include Amazon.com, Adobe Systems, Apple, Microsoft and Yahoo. Akamai is a Hawaiian word meaning smart or intelligent. Akamai mirrors a customer’s web site onto its own network of servers, which are located in over 70 countries. That speeds up download times and cuts the risk of Internet outages or slowdowns, because users can access the closest server, or the one with the best connection. Demand for Akamai’s services continues to rise, particularly as more people use the Internet to view videos. The company gets 28% of its revenue from customers outside of the U.S....

BCE INC., $27.51, Toronto symbol BCE, has increased its quarterly dividend by 7.4%, to $0.435 a share from $0.405. The new annual rate of $1.74 yields 6.3%. This is the company’s third dividend hike since a private consortium led by the Ontario Teachers’ Pension Plan dropped its plan to buy BCE a year ago. BCE has also earmarked $500 million for share buybacks. That’s equal to 2.4% of its $20.9-billion market cap. From December 2008 to May 2009, the company spent $986 million to buy back 5% of its shares. Share buybacks increase the value of the remaining shares....

AMAZON.COM $128.36 (Nasdaq symbol AMZN; SI Rating: Extra Risk) (206-266-1000; www.amazon.com; Shares outstanding: 433.0 million; Market cap: $55.6 billion; No dividends paid) is now selling its Kindle e-book reader in Canada. The reader costs $279 U.S., plus shipping. Canadian Kindle users can wirelessly download files from Amazon’s Kindle store, which contains over 300,000 books. Most bestsellers and new releases will be $11.99 U.S. or less. Users can download Canadian newspapers, including the Globe and Mail and the National Post, as well as leading U.S. and international magazines and newspapers. For now, Canadians won’t be able to use all of the Kindle’s wireless-connection features, including subscriptions to blogs and the Kindle web browser. This is likely because Amazon has not reached a deal with a Canadian wireless carrier, such as BCE, Rogers or Telus....

LINAMAR CORP. $14 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.7 million; Market cap: $905.8 million; Price-to-sales ratio: 0.5; Dividend yield: 0.9%; SI Rating: Extra Risk) will close its plant in eastern Ontario in the next few months. The company feels the plant, which makes parts for brakes, suspensions and other auto systems, is no longer profitable. It is also Linamar’s only facility outside of its main operations in southwestern Ontario. The company did not say how much it would have to pay in severance. Meanwhile, Linamar earned $0.02 a share in the three months ended September 30, 2009. That’s down 90.9% from $0.22 a year earlier. However, it’s a big improvement over the $0.16 a share it lost in the second quarter of 2009. These figures exclude writedowns and severance payments related to previous plant closures. Sales fell 22.1%, to $421.1 million from $540.4 million. However, the company has won $300 million in new contracts this year, partly because some of its competitors went bankrupt during the recession. Linamar is a buy....