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PENGROWTH ENERGY TRUST, $10.28, Toronto symbol PGF.UN, fell 7% on Friday after it cut its monthly distribution by 30%, to $0.07 a unit from $0.10. The new annual rate of $0.84 yields 8.2%. Pengrowth wants to conserve cash to pay down its $1.4-billion long-term debt, which is equal to 50% of its $2.8-billion market cap. The distribution cut should save Pengrowth roughly $93 million a year. The trust also wants to spend more on developing its oil and natural-gas properties in western Canada. These have large, proven reserves, so there is little risk in investing in them. The extra cash will also help Pengrowth buy other nearby properties....

SUNCOR ENERGY INC., $38.59, Toronto symbol SU, announced this week that it is planning to sell some of its natural-gas operations. Most of these properties belonged to Petro-Canada, which Suncor bought on August 1. Natural-gas prices fell to around $2.50 U.S. per thousand cubic feet in early September, but have since rebounded to $3.78 U.S. That’s still well below their peak of $12 U.S., which they hit in July 2008. Suncor hopes to sell all of its natural-gas properties by the end of 2010, but will wait to see if gas prices keep rising before it finalizes any deals. The company is planning to invest the proceeds in its oil-sands operations, which will make up 70% of its business after it sells the natural-gas assets. Suncor’s other oil properties, as well as its refineries and gas stations, will account for the remaining 30%....

MDS INC., $8.37, Toronto symbol MDS, rose nearly 30% this week after it announced several moves aimed at unlocking its value. The company has three businesses: MDS Analytical Technologies sells mass spectrometers that detect and measure substances in blood and other patient samples; MDS Pharma Services conducts contract-drug research for pharmaceutical companies; and MDS Nordion supplies medical isotopes for cancer research. As a result of a strategic review, MDS plans to sell its pharma-services division, and this week it agreed to sell its analytical-technologies segment. These sales will allow MDS to focus solely on its isotope business....

CANADIAN TIRE CORP., $59.20, Toronto symbol CTC.A, reported quarterly profits that were higher than the year-earlier period, despite lower sales. Cooler-than-normal weather in Ontario and Quebec hurt demand for seasonal goods, such as barbecues and patio furniture. But sales of home-improvement products, like paint, were stronger. In the three months ended July 4, 2009, the retailer’s earnings per share rose 8.6%, to $1.26 from $1.16 a year earlier. These figures exclude unusual items, like gains and losses on asset sales. On this basis, the latest earnings were much better than the $1.02 a share that analysts were expecting. The higher earnings were mainly the result of Canadian Tire’s new inventory-management systems, which improved the productivity of its stores. Revenue fell 5.1%, to $2.3 billion from $2.45 billion a year earlier. Same-store sales at its main retail division (which includes Canadian Tire stores and the PartSource auto-parts chain) fell 2.7%. As well, lower gasoline prices caused a 21.4% revenue drop at Canadian Tire’s gas-station division, despite the fact that its sales volume rose by 1.3%....

MDS INC. $6.06 (Toronto symbol MDS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 120.1 million; Market cap: $727.8 million; Price-to-sales ratio: 0.4; SI Rating: Average) has sold one of its two late-stage drug testing businesses. The company is still looking for a buyer for the second one. To put the $50-million sale price in perspective, MDS lost $17 million, or $0.15 a share, in the three months ended April 30, 2009 (all amounts except share price and market cap in U.S. dollars). The loss included a $16-million writedown of buildings and equipment at its drug-testing division. By getting out of late-stage testing, MDS will be able to focus on its more promising early-stage operations. However, the company’s medical-isotope business continues to suffer from the closure of the Chalk River reactor near Ottawa, which will remain out of service until late 2009. MDS gets all of its isotopes from Chalk River, and the shutdown is cutting its gross earnings by $4 million a month. MDS is a hold....

PETRO-CANADA, $48.43, Toronto symbol PCA, rose 5% on Thursday after its shareholders voted 96% in favour of the proposed takeover offer from SUNCOR ENERGY INC., $38.47, Toronto symbol SU. Suncor shareholders have also approved the merger by 98%. The deal gives Petro-Canada shareholders 1.28 common shares of the new company for each share they own, while Suncor investors will get one share of the merged company for each of their Suncor shares. Suncor shareholders will own 60% of the combined company, while Petro-Canada shareholders will own the remaining 40%. (The new company will operate under the Suncor name.) Competition regulators still have to approve the merger. However, the deal should close by the end of the third quarter....

Bombardier makes most of its money from its airplane operations. This is a highly cyclical industry, and the recession has hurt demand for new planes. That’s mainly why Bombardier’s shares are down over 50% from last June’s peak of around $9. However, Bombardier’s passenger-railcar business, while not as profitable, adds stability. The long-term outlook for this division remains bright, particularly as more people move to cities and governments increase spending on public-transit systems. BOMBARDIER INC. (Toronto symbols BBD.A $3.78 and...

BOMBARDIER INC. (Toronto symbols BBD.A $3.78 and
BBD.B $3.65, Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $6.4 billion; Price-to-sales ratio: 0.3; SI Rating: Extra Risk) is the world’s third-largest maker of commercial aircraft, after Boeing and Airbus. Bombardier’s aerospace division supplies about half of its revenue and two-thirds of its profits.

The remaining revenue and earnings come from Bombardier’s transportation division, which controls 22% of the global market. This makes Bombardier the world’s largest maker of passenger railcars and commuter trains. The company sells most of its trains under long-term contracts with large, well-financed customers, such as national railways and municipal transit authorities. This helps offset the cyclical nature of Bombardier’s aircraft business.

Bombardier’s revenue fell from $15.6 billion in 2005 (the company’s fiscal year ends January 31) to $14.8 billion in 2006, but rose to $19.7 billion in 2009 (all amounts except share price and market cap in U.S. dollars). It lost $0.08 a share (or a total of $122 million) in 2005. But thanks to a major restructuring of its railcar business, earnings jumped from $0.11 a share (or $192 million) in 2006 to $0.56 a share (or $1 billion) in 2009.

The recession has hurt demand for new aircraft. In the latest fiscal year, Bombardier delivered 349 planes, down from 361 the previous year. Orders for new planes fell more than 50%, to 367 from 698.

Despite the drop in deliveries, the aerospace division’s revenue rose 2.6% in fiscal 2009, to $10 billion from $9.7 billion the previous year. The gain was the result of higher selling prices for business jets, and increased revenue from repairing and maintaining aircraft. Its gross profit margin (its gross profits as a percentage of its revenue) rose to 9.0% from 5.8%. The division’s $23.5-billion order backlog is equal to 2.4 years of revenue.

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GENNUM CORP., $5.43, Toronto symbol GND, has dropped its friendly takeover bid for rival chipmaker Tundra Semiconductor Corp. (Toronto symbol TUN) after Tundra accepted a higher offer from U.S.-based Integrated Device Technology Inc. Gennum will now receive a $5-million (Canadian) break-up fee from Tundra. To put this figure in context, Gennum lost $800,000 U.S., or $0.02 U.S. a share, in its first fiscal quarter, which ended February 28, 2009. Gennum is still a buy for long-term gains....

CGI GROUP INC., $10 (Toronto symbol GIB.A) is eligible to bid on upcoming U.S. government contracts for computers, software and technology services. The government has earmarked $50 billion U.S. for computer upgrades over the next five years. CGI’s long history of dealing with U.S. government agencies should help it win new contracts under this program. Buy. INDIGO BOOKS & MUSIC INC., $11 (Toronto symbol IDG) reports that its new Shortcovers web site, which lets users download free and paid electronic content from books and magazines, has attracted customers from over 150 countries. Unlike rival bookseller Amazon.com, which requires customers to buy its Kindle electronic-book reader in order to download books and periodicals, Indigo’s customers can view downloads on a wide variety of cellphones and other devices. This should give Indigo an advantage. Buy....