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PENGROWTH ENERGY TRUST, $9.76, Toronto symbol PGF.UN, has agreed to buy the 82% of Monterey Exploration Ltd. (Toronto symbol MXL) that it doesn’t already own. The deal should close in September 2010. Monterey produces oil and natural gas at properties in Alberta and British Columbia. Pengrowth is particularly interested in Monterey’s unconventional gas holdings in northeastern B.C. Monterey lacks the financial resources to develop these assets. That’s why it accepted Pengrowth’s offer. The trust will pay $366 million in units to take full control of Monterey. That includes $30 million of Monterey’s debt, which Pengrowth will assume....

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....

CANADIAN TIRE CORP., $57.22, Toronto symbol CTC.A, rose 8% this week after the company reported better-than-expected earnings. In the three months ended April 3, 2010, Canadian Tire earned $49.4 million, or $0.61 a share. That’s down 0.6% from $49.7 million, or $0.61 a share, a year earlier. If you exclude unusual items, such as losses on property sales, earnings per share would have risen 3.3%, to $0.63 from $0.61. On that basis, the latest earnings beat the consensus estimate of $0.55 a share. Sales rose 4.1%, to $1.83 billion from $1.76 billion. Overall sales rose 2.1% at the company’s main retail division, which consists of its Canadian Tire stores and the PartSource auto-parts chain. The division’s same-store sales rose 1.7%. Warmer-than-normal spring weather pushed up demand for seasonal items, such as bicycles and patio furniture. That helped offset lower sales of winter merchandise, like snow blowers....

BOMBARDIER INC. (Toronto symbols BBD.A $5.40 and BBD.B $5.39, Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $9.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; SI Rating: Extra Risk) is the world’s third-largest commercial-aircraft maker, behind Boeing and Airbus. Its aerospace division supplies roughly half of its revenue. The other half comes from its transportation division, which is the world’s largest maker of passenger railcars and commuter trains. Bombardier’s revenue rose 33.4%, from $14.8 billion in 2006 (its fiscal year ends January 31) to $19.7 billion in 2009 (all amounts except share price and market cap in U.S. dollars). However, its 2010 revenue fell 1.8% to $19.4 billion. That’s because it received fewer aircraft orders. This decline more than offset stronger railcar sales....

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....

BANK OF NOVA SCOTIA, $49.49, Toronto symbol BNS, fell 2% this week, even though it reported better-than-expected quarterly earnings. In its first quarter, which ended January 31, 2010, the bank earned $988 million. That’s up 17.3% from $842 million a year earlier. Earnings per share rose 13.8%, to $0.91 from $0.80, on more shares outstanding. That beat the consensus earnings estimate of $0.88 a share. Most of the gains came from the bank’s Canadian retail-banking operations, where earnings rose 27.9%. That’s mainly because low interest rates continue to fuel strong demand for home mortgages and personal loans. As well, improving financial markets have made it easier for companies to issue new shares and debt securities. That pushed up earnings at the bank’s capital-markets division by 27.0%....

BOMBARDIER INC. (Toronto symbols BBD.A $5.40 and BBD.B $5.42; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market share: $9.2 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.9%; SI Rating: Extra Risk) delivered 302 aircraft in its latest fiscal year, which ended January 31, 2010. That’s down 13.5% from 349 in the prior year. Business-jet deliveries fell 25.1%, while commercial-aircraft deliveries rose 10.0%. The company estimates that both business and commercial aircraft deliveries will fall in fiscal 2011. However, demand should pick up in 2012. Meanwhile, Bombardier’s railcar division continues to win new orders as governments stimulate their economies with new investments in public-transit systems. Bombardier is a buy. The “B” shares are the better choice.

CGI GROUP INC., $14.50, Toronto symbol GIB.A, is our Stock of the Year for 2010. Next week, Stock Pickers Digest, our newsletter for aggressive investors, will reveal its #1 pick for 2010. Don’t miss this unique opportunity to profit. If you’re not already a Stock Pickers Digest subscriber, click here to learn how you can get one month free when you subscribe today. CGI is Canada’s largest provider of computer-outsourcing services. These help its customers automate certain routine functions, such as accounting and purchasing supplies. That lets CGI’s clients focus on their main businesses, and improve their efficiency. The company’s outsourcing contracts typically last 5 to 10 years. That gives it steady, predictable revenue streams. Long-term contracts also give CGI a chance to build customer loyalty, and sell more services to its existing clients....

Bombardier and CAE continue to diversify. This cuts their exposure to the air-travel industry, which has struggled lately. Both stocks are also attractive in relation to their earnings. BOMBARDIER INC. (Toronto symbols BBD.A $4.53 and BBD.B $4.51; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $7.7 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.2%; SI Rating: Extra Risk) is the world’s third-largest maker of commercial aircraft, behind Boeing and Airbus. Bombardier’s aerospace division supplies roughly half of its revenue, and two-thirds of its profits. The remaining revenue and earnings come from Bombardier’s transportation division, which is the world’s largest maker of passenger railcars and commuter trains....

BANK OF MONTREAL, $52.93, Toronto symbol BMO, earned $1.8 billion in its latest fiscal year, which ended on October 31, 2009. That’s down 9.7% from $2.0 billion in the prior year. Earnings per share fell 18.1%, to $3.08 from $3.76, on more shares outstanding. The latest earnings included several unusual charges. These include writedowns of securities the bank holds and severance costs from a 3% cut it made to its workforce. Without these items, the bank would have earned $4.02 a share in fiscal 2009. Analysts were expecting $3.98 a share on that basis. Revenue rose 8.4%, to $11.1 billion from $10.2 billion. That’s mainly because low interest rates continue to push up demand for mortgages and other loans. However, the bank set aside $1.6 billion for bad loans, up 20.5% from $1.3 billion in the prior year. Most of this increase came from its U.S. operations, particularly loans related to the commercial real-estate and manufacturing industries. The U.S. accounts for about 10% of the bank’s revenue....