asset management
TRIMBLE NAVIGATION $29.68 (Nasdaq symbol TRMB; SI Rating: Speculative) (408-481-6914; www.trimble.com; Shares outstanding: 119.5 million; Market cap: $3.5 billion) (adjusted for a 2-for-1 split in February, 2007) makes GPS devices and technology for four main markets: 1) Engineering and construction is the biggest contributor to revenue for Trimble, at 68% of revenues. This segment includes a joint venture with Caterpillar Inc. 2) Agriculture GPS products (15% of sales) let farmers cut costs and increase yields by, say, precisely plowing, seeding or fertilizing fields, even at night....
We’ve had great success with our GPS picks over the last few years. These companies have continued to find new uses for GPS, including navigation maps on cell phones, devices that let farmers more accurately and even remotely work their fields, training devices for runners to measure distance and times and antitheft devices for cars and other property. The Global Positioning System (GPS) is a 24 satellite navigation system run by the U.S. government that lets users precisely determine their geographic location and speed anywhere in the world. The European Union is now in the later stages of developing its own Global Navigation Satellite System (GNSS). It expects this system, called Galileo, to be fully operable in 2010 to 2012, with up to 30 satellites orbiting the earth....
GREAT-WEST LIFECO INC. $35 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 892.1 million; Market cap: $31.2 billion; SI Rating: Above average) is Canada’s largest insurance company with $216.2 billion in assets under administration. Power Financial Corp. owns 75% of Great-West’s stock. The company sells its products directly and through brokers to groups and individuals, mainly under the Great-West Life, London Life and Canada Life brands. Great-West also provides retirement planning and other financial services. Canada accounts for about 45% of its revenue, followed by Europe (35%) and the United States (20%).
Great-West recently agreed to buy U.S.-based mutual fund manager Putnam Investments Trust for $3.9 billion U.S. Putnam ran into trouble over a mutual fund trading scandal a few years ago, which hurt its reputation. It also helps explain the low selling price in relation to Putnam’s assets under management of $192 billion U.S....
Troubled Putnam could be a bargain
TD CANADIAN SMALL-CAP EQUITY FUND $33.61 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.tdcanadatrust.ca. No load — deal directly with the bank) invests in small to medium-sized companies located in Canada and other countries, that the managers feel offer either superior earnings growth or appear undervalued. It looks for sound companies that stand to benefit as the business and economic environment continues to improve. TD Canadian Small-Cap Equity Fund’s top ten holdings are ING Canada, 3.3%; Gildan Activewear, 2.6%; Industrial Alliance Insurance, 2.3%; Western Oil Sands, 1.8%; Canadian Western Bank, 1.7%; E-L Financial, 1.7%; CAE, 1.6%; Niko Resources, 1.6%; Q9 Networks, 1.5%; and Pason Systems, 1.5%. The $430 million fund is broken down by economic sector as follows: 19.6% in Energy, 16.7% in Basic materials, 16.5% in Financials, 14.0% in Consumer discretionary, 11.9% in Technology, 11.6% in Industrials, 5.7% in Health care, 2.1% in Consumer staples, and 0.5% in Utilities....
TD HEALTH SCIENCES FUND $17.15 (CWA Rating: Speculative) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.tdcanadatrust.ca. No load — deal directly with the bank) invests mostly in U.S. companies with a mixture of large-capitalization stocks and earlier-stage biotechnology shares. The managers believe all these firms will profit from an aging population stimulating higher spending on health care, drugs and research. The fund’s top holdings include WellPoint, Amgen, Sepracor, CVS/Caremark, Genentech, Gilead Sciences, UnitedHealth Group, Wyeth, Roche Holdings and Cephalon. Its MER is 2.78%. The $238.3 million fund’s manager is well-known U.S. fund manager T. Rowe Price Associates. TD Health Sciences gained 3.0% over the last year. It’s up 11.2% in the last six months. TD Health Sciences Fund is still a buy.
TALVEST GLOBAL HEALTH CARE FUND $18.91 (CWA Rating: Speculative) (CIBC Asset Management, 1500 University Street, Suite 800, Montreal, PQ. H3A 3S6. 1-800-268-8258; Web site: www.talvest.com. Available from brokers) invests in global companies in a variety of segments of the health-care industry. Top holdings include Schering-Plough Corp., McKesson Corp., Cardinal Health, Sanofi-Synthelbo, Takeda Chemical Industries, Eisai Co. Ltd., Forest Laboratories, Medtronic, Shionogi & Co. and Eli Lilly. Talvest Global Health Care made 7.6% over the last year. The $1.1 billion fund’s MER is 3.14%. Talvest Global Health Care Fund is still a buy.
Sector or ‘theme’ funds entail special risks, but they are much safer than investing in one or two issues in risky fields, such as health care and biotechnology. Should you choose to invest in sector funds, limit your investment to modest quantities. Above all, invest only in funds with proven management and high-quality holdings. Here are updates on two we like: TALVEST GLOBAL HEALTH CARE FUND $18.91 (CWA Rating: Speculative) (CIBC Asset Management, 1500 University Street, Suite 800, Montreal, PQ. H3A 3S6. 1-800-268-8258; Web site: www.talvest.com. Available from brokers) invests in global companies in a variety of segments of the health-care industry. Top holdings include Schering-Plough Corp., McKesson Corp., Cardinal Health, Sanofi-Synthelbo, Takeda Chemical Industries, Eisai Co. Ltd., Forest Laboratories, Medtronic, Shionogi & Co. and Eli Lilly. Talvest Global Health Care made 7.6% over the last year. The $1.1 billion fund’s MER is 3.14%....
TD RESOURCE FUND $32.96 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Website:www.tdcanadatrust.ca. No load — deal directly with the bank) invests in companies with superior asset bases, proven management and the ability to internally finance growth. The $232.7 million TD Resource Fund’s top holdings are mostly of ‘Average’ quality or higher. The fund’s holdings include Suncor Energy, Alcan, EnCana, Talisman Energy, Goldcorp, Denison Mines, Petro-Canada, Nexen, Yamana Gold, BHP Billiton and Tenke Mining. The fund’s industry breakdown is: Materials, 48.6%; and Energy, 41.2%. Its MER is 2.23%. Over the past year the fund has made 17.5%. The fund’s five-year average is 22.7% annually. TD Resource Fund is a buy....
BMO DIVIDEND FUND $50.87 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ont., M5K 1J5, 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) currently holds about 58.3% of its portfolio in the Financial services industry. Its largest holding is Energy at 16.1%. BMO Dividend Fund’s largest holdings are Manulife Financial, Bank of Nova Scotia, CIBC, Royal Bank of Canada, Enbridge, Toronto-Dominion Bank, Canadian National Railway, TransCanada Corporation, Imperial Oil, Brookfield Asset Management, Thomson Corporation, BCE Inc. and Sun Life Financial. Over the last five years, the $5.7 billion BMO Dividend Fund has posted a 13.2% annual rate of return. That’s just under the S&P/TSX 60’s gain of 13.4%. The fund gained 9.9% over the last year, compared to a gain of 15.0% for the S&P/TSX 60. BMO Dividend’s MER is 1.73%....
BMO Dividend and Royal Dividend hold mostly high-quality stocks. These stocks sometimes run into deep trouble and go through lengthy struggles, just like lesser investments. Eventually, though, most solve their problems and go on to thrive anew. Both funds hold a high proportion of their assets in financial services stocks. However, if you must focus on something, finance is a relatively stable sector. If you do invest in these funds, be sure to adjust the rest of your portfolio so these funds won’t overly concentrate your holdings in the financial sector....