cae

CAE INC., $16.00, Toronto symbol CAE, is a leading maker of flight simulators and operates pilot-training schools in over 30 countries. It also produces simulators for military aircraft as well as mannequins and other medical-simulators for training health professionals. The company earned $239.3 million in the year ended March 31, 2016. That’s up 18.9% from $201.2 million a year earlier. Earnings per share also jumped 17.1%, rising to $0.89 from $0.76, on more shares outstanding. If you exclude costs tied to its restructuring plan and a tax adjustment, CAE earned $0.86 a share for the fiscal year. That beat the consensus estimate of $0.84....

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Instead, rather than ―buy and hold‖, we prefer a “buy and watch closely” strategy....

BOMBARDIER INC., Toronto symbols BBD.A $1.84 and BBD.B $1.62, announced this week that Latvia-based Air Baltic has exercised its option to buy seven more of the company’s new CSeries passenger jets. The client had previously ordered 13 planes. Bombardier will begin to deliver the aircraft by the end of 2016. The company now has firm orders for 250 CSeries planes. Based on the list price for the aircraft, these orders are worth $18 billion (all amounts except share prices in U.S. dollars). To put that in context, Bombardier’s total revenue was $18.2 billion in 2015. However, the company typically offers discounts to customers that buy multiple planes. So the total value of its CSeries backlog is probably much less than the list price. OUR RECOMMENDATION: Bombardier is still a hold....

CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 269.9 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.0%; TSINetwork Rating: Average; www.cae.com) is a leading maker of flight simulators and operator of pilot-training schools in over 30 countries. The company recently won several contracts for flight simulators and related equipment from military clients in Canada, the U.S., the U.K. and Australia. In all, these deals are worth $175 million, or 7% of the company’s $2.4 billion of annual revenue. CAE’s military businesses supply 35% of its sales. That cuts its reliance on cyclical commercial airlines....

CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 269.9 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.0%; TSINetwork Rating: Average; www.cae.com) is a leading maker of flight simulators and operator of pilot-training schools in over 30 countries. The company recently won several contracts for flight simulators and related equipment from military clients in Canada, the U.S., the U.K. and Australia. In all, these deals are worth $175 million, or 7% of the company’s $2.4 billion of annual revenue. CAE’s military businesses supply 35% of its sales. That cuts its reliance on cyclical commercial airlines....

TRANSCANADA CORP., $49.59, Toronto symbol TRP, recently agreed to buy Texas-based Columbia Pipeline Group (New York symbol GPCX) for $13 billion U.S. That’s equal to 48% of its market cap of $35.1 billion (Canadian). Columbia operates natural gas pipelines in the U.S. Northeast, Midwest, Mid-Atlantic and Gulf Coast regions, as well as underground gas storage terminals. To help pay for this acquisition, TransCanada has sold 96.6 million subscription receipts at $45.75 a share for total proceeds of $4.4 billion. Each receipt will convert to one common share when TransCanada completes the Columbia acquisition, probably by the end of 2016. If it fails to complete the acquisition, the funds will be returned to the subscribers. In the meantime, the holders of these receipts will receive the same dividends as holders of the company’s common shares....

BANK OF MONTREAL, $74.15, Toronto symbol BMO, reported better-than-expected results this week, thanks mainly to strong gains from its U.S. operations. In its fiscal 2016 first quarter, which ended January 31, 2016, the bank’s revenue rose 0.4%, to $5.08 billion from $5.06 billion a year earlier. That beat the consensus forecast of $4.88 billion. Overall earnings increased 13.2%, to $1.2 billion from $1.0 billion. Earnings per share gained 14.4%, to $1.75 from $1.53, on fewer shares outstanding. These figures exclude unusual items such as the cost to integrate recent acquisitions. On that basis, they exceed the consensus estimate of $1.72 a share....

CAE INC. $14 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 269.9 million; Market cap: $3.8 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.1%; TSINetwork Rating: Average; www.cae.com) earned $59.4 million in its fiscal 2016 third quarter, which ended December 31, 2015. That’s up 14.0% from $52.1 million a year earlier. Earnings per share also jumped 10.0%, rising to $0.22 from $0.20, on more shares outstanding. Revenue gained 10.2%, to $616.3 million from $559.1 million. About 90% of the company’s revenue comes from foreign customers, so it’s benefiting from the lower Canadian dollar. Sales of flight simulators and pilottraining services to airlines (54% of total revenue) gained 3.9%. CAE sold nine simulators during the quarter, for a total of 39 in the first nine months of fiscal 2016. It expects its full-year total to exceed the 41 sold in fiscal 2015....

CAE INC. $14 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 269.9 million; Market cap: $3.8 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.1%; TSINetwork Rating: Average; www.cae.com) earned $59.4 million in its fiscal 2016 third quarter, which ended December 31, 2015....

BCE INC., $58.16, Toronto symbol BCE, continues to benefit from strong demand for its wireless, high-speed Internet and Fibe TV services. That’s offsetting weaker revenue from traditional telephone services. In the three months ended December 31, 2015, the company’s earnings rose 0.8%, to $615 million from $610 million a year earlier. Per-share profits were unchanged at $0.72 on more shares outstanding. These figures exclude unusual items, such as costs related to acquisitions and early debt repayments. On that basis, the latest earnings matched the consensus estimate....