boeing

CAE INC. $10 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.3 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.cae.com) spends around 10% of its annual revenue of $1.8 billion on research. That helps it develop simulators for new planes, like the Boeing 787 Dreamliner and Airbus A380. The company is also using these funds to apply its expertise to new fields.

For example, CAE is now making simulators and other products, including lifelike mannequins, to train paramedics and medical students. It is also focusing on the mining industry: Right now, mining firms are using software that CAE developed to plan new mines and measure reserves. These new businesses, which both have strong growth potential, now supply 5% of CAE’s revenue.

The stock trades at 12.7 times the $0.79 a share that CAE will probably earn in its 2013 fiscal year, which ends March 31, 2013. The $0.16 dividend yields 1.6%.

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Both CAE and Nordion are developing new products that help them tap into profitable new markets. That makes both companies less reliant on their core businesses—and enhances their long-term prospects. CAE INC. $10 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.3 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.cae.com) spends around 10% of its annual revenue of $1.8 billion on research. That helps it develop simulators for new planes, like the Boeing 787 Dreamliner and Airbus A380. The company is also using these funds to apply its expertise to new fields. For example, CAE is now making simulators and other products, including lifelike mannequins, to train paramedics and medical students. It is also focusing on the mining industry: Right now, mining firms are using software that CAE developed to plan new mines and measure reserves. These new businesses, which both have strong growth potential, now supply 5% of CAE’s revenue....

ALARMFORCE INDUSTRIES, $10.91, symbol AF on Toronto, jumped over 21% this week after it announced that it is launching a strategic review of business opportunities, including a possible sale of the company. We moved AlarmForce to a buy in our July 2012 issue of Stock Pickers Digest, when we made it our Pick of the Month at $9.19. Meanwhile, AlarmForce’s sales rose 10.2% in the three months ended April 30, 2012, to a record $11.1 million from $10.1 million a year earlier. Even so, the company lost $238,021, or $0.02 a share, compared to a profit of $948,921, or $0.07 a share....

ADOBE SYSTEMS $31.43 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 491.8 million; Market cap: $15.5 billion; No dividends paid) is teaming up with NBC to stream events live from the Olympic Summer Games in London to mobile device users in the U.S. for free. Comcast Corp. owns NBC, which has the U.S. television rights to the London Olympics. NBC has launched two applications using Adobe technology. Both include software that measures user traffic and offers targeted advertising. The first app, NBC Olympics Live Extra, will let customers of cable, satellite and telephone companies live-stream competitions and events. The other app, called NBC Olympics, will provide additional information, such as TV and online schedules, live results and highlights....

WESTJET AIRLINES $16.47 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 126.2 million; Market cap: $2.1 billion; Dividend yield: 1.5%) has signed a code-sharing agreement with China Eastern Airlines, one of that country’s largest carriers.

Under these agreements, two airlines co-operate on flights and baggage handling. Code-sharing agreements are especially valuable for attracting business passengers. That’s because these agreements let customers seamlessly connect between flights and gain frequent-flyer points for the entire distance travelled.

As well, WestJet currently only has Boeing 737s in its fleet. That limits how far it can fly, so it relies on code-sharing and other agreements to attract international travellers.

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PENGROWTH ENERGY CORP., $6.40, Toronto symbol PGF, is cutting its monthly dividend by 42.9%, to $0.04 a share from $0.07, starting with the August 2012 payment. That caused the stock to fall 3% on Friday. Even after the cut, the new annual dividend rate of $0.48 a share still yields 7.5%. The company’s selling prices for oil and natural gas are falling, and it wants to conserve cash for potential acquisitions and investments in promising new projects, such as its Lindbergh oil sands development in Alberta....

GKN plc, 181.50 pence, symbol GKN on the London Stock Exchange (Shares outstanding: 1.6 billion; Market cap: 2.9 billion British pounds; www.gkn.com), mainly sells parts for automobiles and aircraft. The company was established in 1900 as Guest, Keen and Company. It changed its name to Guest, Keen & Nettlefolds, Ltd., in 1902 when it acquired a screw- and wire-making business founded by John Sutton Nettlefold. In 1986, the growing conglomerate became GKN plc. In the first quarter of 2012, GKN’s revenue rose 17.1%, to 1.74 billion pounds from 1.49 billion pounds a year earlier (1 British pound = $1.60 Canadian). Excluding contributions from acquisitions, revenue rose 8%. Operating profit rose 19.3%, to 142 million pounds from 119 million pounds....

SPDR DOW JONES INDUSTRIAL AVERAGE ETF $123.93 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average.

The fund’s top holdings are IBM, ExxonMobil, Chevron Corp., 3M, Wal-Mart Stores, McDonald’s Corp., Coca-Cola Co., Caterpillar Inc., United Technologies and Boeing. The fund’s expenses are about 0.18% of its assets.

SPDR Dow Jones ETF is a buy.

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GOOGLE INC., $580.07, Nasdaq symbol GOOG, will soon launch the Nexus 7, a new tablet computer that features a 7-inch touch-screen display and the latest version of the company’s Android operating system for mobile devices. The new tablet will cost $199. That should help Google complete with similar-sized tablets, including Amazon.com’s popular Kindle Fire. (Amazon.com is a recommendation of Stock Pickers Digest, our newsletter that focuses on aggressive investing.) Google will also launch the Nexus Q, a ball-shaped device that lets users stream music and video from the Internet to a TV set or stereo system. This device will cost $299....

MART RESOURCES, $1.36, symbol MMT on Toronto, jumped over 28% this week after the company declared a special dividend of $0.10 a share, payable on August 8, 2012. Mart will then begin paying quarterly dividends of $0.05 a share starting in September 2012. The stock is now up 288.6% since we first recommended it in our May 2010 issue at $0.35. Mart is focused on developing, producing and drilling for oil at its properties in Africa. The company is currently producing oil at its 50%-held Umusadege field in Nigeria....