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BANK OF NOVA SCOTIA, $53.11, Toronto symbol BNS, continues to benefit from its growing banking operations in the Caribbean, Latin America, South America and Asia. In the three months ended July 31, 2011, the bank’s earnings rose 19.1%, to $1.2 billion from $1.0 billion a year earlier. Earnings per share rose 13.3%, to $1.11 from $0.98, on more shares outstanding. If you exclude certain one-time items, the bank would have earned $1.14 a share in the latest quarter. That beat the consensus estimate of $1.12 a share. Revenue rose 13.6%, to $4.3 billion from $3.8 billion. Bank of Nova Scotia continues to set aside less money to cover bad loans: loan-loss provisions fell 12.0%, to $243 million from $276 million a year earlier....

TORONTO-DOMINION BANK, $71.10, Toronto symbol TD, has agreed to buy MBNA’s Canadian credit card operations from Bank of America (New York symbol BAC). This purchase will add 1.8 million customers to TD’s roughly 4.0 million credit-card accounts. MBNA is also the largest issuer of MasterCard cards in Canada, which will diversify TD’s Visa cards. TD will pay $8.5 billion for MBNA’s Canadian credit-card operations when the deal closes, probably early next year. To put that in context, TD earned $5.2 billion, or $5.77 a share, in its 2010 fiscal year, which ended October 31, 2010....

ENCANA CORP., $28.92, Toronto symbol ECA, reported sharply higher earnings this week. In the three months ended June 30, 2011, Encana earned $166 million, or $0.22 a share (all amounts except share price in U.S. dollars). That’s up 151.5% from $66 million, or $0.09 a share a year earlier. These figures exclude several unusual items, particularly losses related to hedging and foreign exchange. On this basis, the latest earnings easily beat the consensus estimate of $0.14 a share. Even so, cash flow per share fell 10.9%, to $1.47 from $1.65. That’s mainly because the company’s average selling price for gas fell 7.5% to $5.09 per thousand cubic feet from $5.50 a year earlier (gas accounts for 96% of Encana’s overall production). Average daily gas production rose 3.3%. Encana sold its oil for at an average price per barrel of $92.66, up 38.2% from $67.05....

PLEASE NOTE: Our next Hotline will go out on Friday, July 8, 2011. SNC-LAVALIN GROUP INC., $58.88, Toronto symbol SNC, rose 9% this week in response to its purchase of certain assets of Atomic Energy of Canada Ltd. from the federal government. The purchase mainly consists of Atomic Energy’s Candu nuclear-reactor division. All of Canada’s reactors use the Candu design and technology. The division has also sold reactors to Argentina, Romania, India, South Korea and China....

BOMBARDIER INC. (Toronto symbols BBD.A $6.88 and BBD.B $6.89; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $12.4 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.4%; TSINetwork Rating: Average; www.bombardier.com) will use robots to assemble the cockpit and fuselage of its new CSeries jets....

BANK OF NOVA SCOTIA, $58.48, Toronto symbol BNS, reported better-than-expected earnings this week. That’s mainly because it is putting less money aside to cover bad loans because of the improving economy. The bank also saw strong gains at its international-banking and wealth-management operations. In the three months ended April 30, 2011, Bank of Nova Scotia earned $1.5 billion. That’s up 40.7% from $1.1 billion a year earlier. Earnings per share rose 33.3%, to $1.36 from $1.02, on more shares outstanding. The latest earnings included a one-time gain of $286 million, or $0.26 a share. That’s mostly because new accounting rules forced the bank to revalue its original 18% stake in DundeeWealth Inc. in connection with its recent purchase of the remaining 82% of this company. DundeeWealth manages investments and operates a brokerage business. It also owns the Dynamic family of mutual funds, and provides financial-planning and investment advice....

BOMBARDIER INC. (Toronto symbols BBD.A $6.70 and BBD.B $6.69; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $11.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.5%; TSINetwork Rating: Average; www.bombardier.com) continues to win new railcar contracts. The company recently won a nine-year deal to build 200 diesel locomotives for DB Regio AG, which operates public-transit systems in Germany. This contract is worth $867 million, which is equal to 5% of Bombardier’s annual revenue of $17.7 billion (all amounts except share price and market cap in U.S. dollars). The company will start delivering these trains in 2013. Bombardier has also received a $186-million order for 50 electric locomotives from Italy’s state-owned railway company. The company will deliver these trains in 2012 and 2013....

Bombardier was a favourite of momentum traders in the 1990s, and the stock peaked at over $26 in 2000. However, 9/11 and two recessions cut the company’s share price to under $3 in 2009. In response, Bombardier aggressively cut its costs. It also expanded its railcar business. That lowered its exposure to the highly cyclical aircraft industry. These moves have significantly improved Bombardier’s earnings. That’s also helping the company develop new, more fuel-efficient airplanes and high-speed trains. These new products will help Bombardier increase its sales and market share, particularly in fast-growing countries like China and Brazil. BOMBARDIER INC. (Toronto symbols BBD.A $6.90 and...

PLEASE NOTE: Our next Hotline will go out on Thursday, April 7, 2011. BOMBARDIER INC., Toronto symbols BBD.A $7.09 and BBD.B $7.11, rose 12% this week after the company reported better-than-expected earnings. In its 2011 fiscal year, which ended January 31, 2011, Bombardier’s earnings rose 8.2%, to $755 million from $698 million in fiscal 2010 (all amounts except share price in U.S. dollars). Earnings per share rose 7.7%, to $0.42 from $0.39, on more shares outstanding. That easily beat the consensus estimate of $0.36 a share....

The stock market put on a huge rise from mid-2010 through February this year, and this left it ripe for a setback. Japan’s earthquake/tsunami/nuclear plant breakdown provided the trigger for that setback. Events in Japan have been horrific for the victims, of course. The Japanese situation could still weigh on the market for weeks or months to come. However, the damage to Japan is far too isolated and local to put the worldwide economic recovery at risk. World economic growth could slow temporarily while multi-national companies re-think their hiring and investment plans, and consumers re-think major purchases. After they complete their re-thinking, businesses and consumers may speed up their spending to make up for lost time. The outcome of Japan’s nuclear problems could have a big impact. If radiation leakage is widespread, it could spur much more environmental opposition to the nuclear industry. That could shift demand from nuclear to natural-gas power plants, particularly since shale gas discoveries and technology have vastly expanded natural gas reserves in North America and around the world. (One key beneficiary would be our long-time favourite, Encana – see below.)...