bce

BOMBARDIER INC., Toronto symbols BBD.A, $3.39, and BBD.B, $3.32, has received a firm order for 20 of its new CSeries regional jets from Lease Corporation International Aviation (New Buildings) Limited. Lease Corporation is an Irish company that leases aircraft to Singapore Airlines, British Airways and other major airlines. The deal is worth $1.4 billion, and Bombardier will probably begin delivering the planes in 2014. (All amounts except share price in U.S. dollars) Moreover, Lease Corporation has an option to buy 20 more jets, though it will probably wait until it has received most of the initial order before it exercises the option. To put this contract in perspective, Bombardier earned $1 billion, or $0.56 a share, in the fiscal year ended January 31, 2009. That’s more than twice the $479 million, or $0.26 a share, it earned the previous year. The year-earlier figures exclude the writedown of an investment....

BCE INC. $26.01 (Toronto symbol BCE; Shares outstanding: 791.6 million; Market cap: $20.6 billion; SI Rating: Above Average) has over 7.5 million telephone and Internet customers in Ontario and Quebec. It also has 6.5 million wireless subscribers across Canada. In the three months ended December 31, 2008, BCE’s revenue fell 0.7%, to $4.49 billion from $4.52 billion. However, earnings per share before one-time items rose 19.6%, to $0.55 from $0.46. BCE’s cellphone revenue rose 7.6% in 2008, and subscribers grew by 4.5%. Wireless accounts for 25% of BCE’s revenue and 43% of its profit. Since mid-2008, BCE has laid off over 7% of its staff. It has also cut spending on consulting, eliminated 7,000 corporate credit cards and lowered the number of ad agencies it uses to 11 from 47. These moves should lower the company’s annual expenses by $400 million. BCE earned $1.8 billion in 2008....

BCE aggressively cut its costs last year, including reducing its staff by 7%. The cuts were in response to a takeover bid by a consortium led by the Ontario Teachers’ Pension Plan. The bid failed, but BCE’s cost cuts have left it in a strong position to compete during the recession, and to profit when the economy rebounds. BCE INC. $26.01 (Toronto symbol BCE; Shares outstanding: 791.6 million; Market cap: $20.6 billion; SI Rating: Above Average) has over 7.5 million telephone and Internet customers in Ontario and Quebec. It also has 6.5 million wireless subscribers across Canada. In the three months ended December 31, 2008, BCE’s revenue fell 0.7%, to $4.49 billion from $4.52 billion. However, earnings per share before one-time items rose 19.6%, to $0.55 from $0.46. BCE’s cellphone revenue rose 7.6% in 2008, and subscribers grew by 4.5%. Wireless accounts for 25% of BCE’s revenue and 43% of its profit....

These five large funds — one from each of Canada’s big-five banks — have suffered over the last year. That’s because they were heavily weighted toward financial services and resource stocks. Financial services companies are still dealing with tight credit markets. As well, the recession has cut demand for resources. This, in turn, has driven down the prices of resource stocks. We still feel that the best way to profit in the stock market is to stick with high-quality, well-established companies and to spread your money out among the five sectors.You should also ensure your investments are diversified within each sector. These five funds continue to stick to high-quality investments. However, you still should adjust your portfolio to reflect the funds’ high weightings in certain sectors....

RBC CANADIAN EQUITY FUND $18.03 (CWA Rating: Conservative) (RBC Funds, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.royalbank.com. No load — deal directly with the bank) mainly invests in larger-capitalization stocks, but may also buy small- and mid-cap stocks. The $3.1-billion fund’s largest holdings are Royal Bank, Manulife, EnCana, TD Bank, Potash Corp., Bank of Nova Scotia, Canadian Natural Resources, Suncor Energy, Research in Motion and BCE. The fund is heavily weighted (47.2%) toward the resource sector; 27% of its investments are in finance. Over the last 10 years, RBC Canadian Equity posted a 4.9% annual rate of return. That’s just over the S&P/TSX’s 4.6% gain. The fund lost 38.3% over the last year, compared to a loss of 38.2% for the S&P/TSX. The fund’s MER is 1.96%....

CIBC CANADIAN EQUITY FUND $16.61 (CWA Rating: Conservative) (CIBC Securities, 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631-7008; Web site: www.cibc.com. No load — deal directly with the bank) looks at fundamentals like earnings, cash flow and debt level to identify companies that it sees as having above-average growth potential. The $317.2-million fund’s top holdings are: TransCanada Corp., EnCana, Research in Motion, Bank of Nova Scotia, CN Railway, Potash Corp., BCE Inc., Canadian Natural Resources and Royal Bank of Canada. CIBC Canadian Equity holds 39.4% of its portfolio in resource stocks and 27.1% in finance stocks....

TELUS CORP. $33.75 (Toronto symbol T.A; Shares outstanding: 335.6 million; Market cap: $11.3 billion; SI Rating: Above Average) plans to spend $500 million this year to improve the speed and reach of its wireless networks in British Columbia. This investment is nearly a quarter of the $2.05 billion that Telus plans to spend on upgrades in 2009. Most of the balance will go to improving its high-speed Internet services and installing equipment related to two large telecommunication contracts with businesses in Ontario and Quebec. Telus’s 2008 cash flow was $2.8 billion, or $8.76 a share. A faster network will help Telus attract and retain more cellphone customers. Telus is Canada’s third-largest wireless service provider, after Rogers and BCE. Moreover, it has to compete with new entrants in the wireless market, which should begin operations later this year. These improvements will also let the company offer more Internet services at greater speeds. This includes faster downloading of videos and music from the Internet....

SCOTIA CANADIAN GROWTH FUND $41.09 (CWA Rating: Conservative) (Scotia Securities, 40 King Street West, 6th Floor, Toronto, Ontario M5H 1H1. 1-800-268-9269; Web site: www.scotiabank.com. No load — deal directly with the bank) attempts to use an investment’s fundamentals to determine whether it has the potential for above-average growth. The $315.8-million Scotia Canadian Growth Fund’s largest stock holdings include EnCana Corp., Royal Bank, TD Bank, BCE Inc., Potash Corp., Canadian Natural Resources, Suncor Energy, Bank of Nova Scotia and Barrick Gold. Scotia Canadian Growth holds 43.3% of its portfolio in the resource sector. Its next-largest segment is financial services, at 24.9%....

Brookfield Properties Corp., $7.14, symbol BPO on Toronto (Shares outstanding: 391.1 million; Market cap: $2.8 billion), owns, develops and manages office buildings in some of North America’s largest cities. Brookfield’s commercial portfolio consists of interests in 108 properties totalling 74 million square feet in the downtown cores of New York, Boston, Washington, D.C., Los Angeles, Houston, Toronto, Calgary and Ottawa. Brookfield Asset Management (symbol BAM.A on Toronto), holds a 50% interest in Brookfield Properties. The other 50% trades on the Toronto exchange. Office buildings account for about 78% of Brookfield’s revenue, and residential housing accounts for about 22%. Brookfield’s residential land-development and homebuilding operations are mainly based in Alberta (42% of total acres), Texas (26%), Colorado (18%), Ontario (13%) and Missouri (1%)....

GENNUM CORP., $3.65, Toronto symbol GND, has agreed to buy Ottawa-based Tundra Semiconductor Corp. (Toronto symbol TUN). Gennum makes equipment that lets TV broadcasters store, manipulate and transport video signals without losing picture quality. Like Tundra, it also makes chips and other components for computer-networking equipment, such as modems and routers. Gennum is paying $86 million in cash and shares for Tundra, 48% more than Tundra’s market cap just prior to the announcement. The cash portion of the purchase price is $55 million, while Gennum shares make up the other $31 million. To put this in context, Gennum earned $22 million U.S., or $0.62 U.S. a share, in its fiscal year ended November 30, 2008. (Although it trades on the Toronto exchange, Gennum reports its results in U.S. dollars.) These figures exclude writedowns of investments and other unusual items. Gennum also held cash of $49 million U.S., or $1.38 U.S. a share, as of November 30, 2008. It has just $1-million U.S. in long-term debt, so it has plenty of room to borrow the extra cash it needs to complete the takeover....