Broadridge Financial Solutions

BROADRIDGE FINANCIAL SOLUTIONS $24.14 New York symbol BR: TSINetwork Rating: Extra Risk) (201-714-3000; www.broadridge.com; Shares outstanding: 124.1 million; Market cap: $3.0 billion; Dividend yield: 2.7%) serves the investment industry in three main areas: investor communications; securities processing; and transaction clearing. Broadridge’s systems help its customers cut costs.

Broadridge’s earnings jumped 45.3% in the three months ended December 31, 2011, to $15.4 million from $10.6 million a year earlier. Before one-time items, earnings per share rose 50.0%, to $0.12 from $0.08, on fewer shares outstanding. Revenue rose 8.5%, to $479.8 million from $442.3 million.

Timely acquisitions starting to pay off

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EUROPEAN GOLDFIELDS $11.95 (Toronto symbol EGU; TSINetwork Rating: Speculative) (44 (20) 7408 9534; www.egoldfields.com; Shares outstanding: 183.8 million; Market cap: $2.2 billion; No dividends paid) is now the subject of a friendly takeover bid from Eldorado Gold (symbol ELD on Toronto). The offer is for 0.85 of an Eldorado share and $0.0001 in cash for each European Goldfields share. European Goldfields’ board of directors has approved the takeover. European Goldfields’ Skouries and Olympias gold projects in Greece and its Certej project in Romania would be good fits for Eldorado, which has mines in Greece and Turkey. Eldorado Gold is now trading at $14.20, which makes the cash and share portions of its offer worth a combined $12.07 per European Goldfields share. European Goldfields is trading just below that price, which indicates that many investors are not expecting a higher offer. However, European Goldfields says it received proposals from a number of potential buyers earlier this year, so a rival bid could still emerge....

BROADRIDGE FINANCIAL SOLUTIONS $23.65 (New York symbol BR; TSINetwork Rating: Extra Risk) (201-714-3000; www.broadridge.com; Shares outstanding: 126.7 million; Market cap: $3.0 billion; Dividend yield: 2.7%) is now working with the Singapore Exchange to build a new service aimed at improving the accuracy, efficiency and transparency of Singapore’s shareholder communication and proxy processes. This system will replace the manual system that is now in use.

The new service will use Broadridge’s shareholder-communications software, but it will be tailored to the specific requirements of the Singapore market and domestic and international investors. The Singapore Exchange will market the service to its listed issuers.

No financial terms were disclosed, but the deal reinforces Broadridge’s leading position in the field of investor communications.

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PLEASE NOTE: This is our last Hotline for 2011. Our next Hotline will go out on Friday, January 6, 2012. EUROPEAN GOLDFIELDS, $12.13, symbol EGU on Toronto, is now the subject of a friendly takeover bid from Eldorado Gold (symbol ELD on Toronto). The offer is for 0.85 of an Eldorado share and $0.0001 in cash for each European Goldfields share. European Goldfields’ board of directors has approved the takeover. European Goldfields’ Skouries and Olympias gold projects in Greece and its Certej project in Romania would be good fits for Eldorado, which has mines in Greece and Turkey....

TRILOGY ENERGY CORP., $35.29, symbol TET on Toronto, owns oil and gas properties in the Kaybob and Grande Prairie areas of central Alberta. About 71% of Trilogy’s production is natural gas. The remaining 29% is oil. In the three months ended September 30, 2011, Trilogy produced an average of 29,035 barrels of oil equivalent per day (including natural gas). That was up 29.3% from 22,462 barrels a day a year earlier. Trilogy’s daily production should rise to an average of 30,000 barrels for all of 2011. Cash flow per share rose 82.1%, to $0.51 from $0.28 a year earlier; the production increase and higher oil prices were the main reasons for the gain....

BROADRIDGE FINANCIAL SOLUTIONS $20.52 (New York symbol BR: TSINetwork Rating: Extra Risk) (201-714-3000; www.broadridge.com; Shares outstanding: 126.8 million; Market cap: $2.5 billion; Dividend yield: 3.1%) serves the investment industry in three main areas: investor communications; securities processing; and transaction clearing. Broadridge’s systems help its customers cut costs. Broadridge recently acquired privately held Paladyne Systems Inc., whose software helps over 150 hedge funds, mutual fund companies and wealth management firms manage their investments and lower their operating costs. Paladyne will retain its name and staff. Broadridge paid $76.5 million for Paladyne. That’s equal to 44% of the $175.8 million, or $1.37 a share, that it earned in the year ended June 30, 2011....

GOOGLE INC., $524.85, Nasdaq symbol GOOG, has paid an undisclosed sum for privately held Zagat, which publishes reviews of restaurants, hotels, theatres and other tourist attractions in over 100 countries. Zagat, which was founded in 1979, bases its ratings on information it receives from consumer surveys. It then sells this information through printed guides and its web site. Zagat will give Google access to local content that is not available to other Internet-search providers. As well, the company can add Zagat’s reviews to its other services, like Google Maps, which displays street maps and helps users find their way to their destinations. Zagat’s reviews should also enhance the appeal of mobile devices powered by Google’s Android operating system....

IAMGOLD CORP., $22.39, symbol IMG on Toronto, owns the Niobec niobium mine in Quebec. Niobium is a rare metal that when used as an additive makes steel stronger, more heat resistant and easier to weld. Niobium is widely used in automobiles and oil and gas pipes. Right now, China accounts for about 25% of worldwide niobium consumption. IAMGold’s Niobec mine produces about 8% of the world’s niobium supply. The company is considering selling a 10% to 20% stake in Niobec, and using the proceeds to fund the mine’s expansion. After that, the company will consider selling more of the mine. IAMGold’s plan for Niobec looks especially attractive this week, after a consortium of five state-owned Chinese companies announced that they are buying 15% of the world’s largest niobium producer for $1.95 billion in cash. Brazil’s Companhia Brasileira de Metalurgia e Mineraçào, or CBMM, produces more than 80% of the world’s niobium supply....

INTACT FINANCIAL CORP. $55.54 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 115.1 million; Market cap: $6.1 billion; Dividend yield: 2.6%) is Canada’s largest provider of property and casualty insurance, based on premiums. Its brands include Intact Insurance, Canada BrokerLink, belairdirect and Grey Power. Intact has two product lines: its personal products, which contribute 70% of its premiums, include automobile and property insurance that Intact sells to individuals. Commercial products provide the remaining 30% of premiums, and include auto, property, liability, surety and specialty coverage that Intact mainly sells to small- and medium-sized businesses. In the quarter ended March 31, 2011, Intact earned $1.42 a share, up 19.3% from $1.19 a year earlier. Sales rose 6.7%, to $1.23 billion from $1.15 billion....

BROADRIDGE FINANCIAL SOLUTIONS $21 (New York symbol BR: TSINetwork Rating: Extra Risk) (201-714 -3000; www.broadridge.com; Shares outstanding: 125.0 million; Market cap: $2.6 billion; Dividend yield: 2.8%) serves the investment industry in three main areas: investor communications; securities processing; and transaction clearing. Clients include both large and small firms. Broadridge’s systems help its customers cut costs. Mutual-fund companies are buying fewer of Broadridge’s event-related services. That’s because these clients are holding fewer special events, such as meetings to change the directors of their funds. As a result, the company’s earnings fell 79.4%, to $10.6 million, or $0.08 a share, in the three months ended December 31, 2010. A year earlier it earned $51.5 million, or $0.37 a share. That fell short of the consensus estimate of $0.14 a share. Revenue fell 16.5%, to $442.3 million from $529.7 million....