CAE Inc.

CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 269.3 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.0%; TSINetwork Rating: Average; www.cae.com) earned $47.7 million in its fiscal 2016 second quarter, which ended September 30, 2015, up 13.6% from $42.0 million a year earlier. Earnings per share rose at a slower pace of 12.5%, to $0.18 from $0.16, on more shares outstanding. Revenue gained 16.5%, to $616.8 million from $529.4 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 pilot-training services to airlines (59% of total revenue) jumped 23.4%. CAE sold 16 simulators during the quarter and expects its full-year total to be near the 41 it sold in fiscal 2015....

CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 269.3 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.0%; TSINetwork Rating: Average; www.cae.com) earned $47.7 million in its fiscal 2016 second quarter, which ended September 30, 2015, up 13.6% from $42.0 million a year earlier. Earnings per share rose at a slower pace of 12.5%, to $0.18 from $0.16, on more shares outstanding. Revenue gained 16.5%, to $616.8 million from $529.4 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 pilot-training services to airlines (59% of total revenue) jumped 23.4%. CAE sold 16 simulators during the quarter and expects its full-year total to be near the 41 it sold in fiscal 2015....

LINAMAR CORP., $70.26, Toronto symbol LNR, has offered to buy 100% of Montupet SA, a French maker of aluminum car parts with plants in Europe, North America and Asia. The company will pay $1.16 billion for Montupet’s shares and will assume $97.5 million of its debt. The deal’s total value—$1.25 billion—is equal to 27% of Linamar’s $4.6-billion market cap (the value of all outstanding shares). Linamar will borrow the cash it needs for this purchase, which will increase its long-term debt from $581.3 million (as of June 30, 2015) to around $1.8 billion. That’s a high, but still manageable, 39% of Linamar’s market cap. The new operations will immediately add to the company’s cash flow and earnings, helping it pay down the extra debt....

FORTIS INC. $38 (Toronto symbol FTS; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 279.9 million; Market cap: $10.6 billion; Price-to-sales ratio: 1.7; Dividend yield 3.9%; TSINetwork Rating: Above Average; www.fortisinc.com) owns electrical utilities across Canada and in the U.S. and Caribbean. It also distributes natural gas in British Columbia. The company recently raised its quarterly dividend by 10.3%, to $0.375 a share from $0.34. The new annual rate of $1.50 yields 3.9%. Fortis has raised its payout every year for the past 43 years. The company also plans to increase the payout by around 6% each year through 2020. Fortis is a buy....

< p>CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 268.6 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.0%; TSINetwork Rating: Average; www.cae.com) has won several contracts for flight simulators and related equipment from the U.S. Air Force, the U.S. Navy and the German Air Force. < p>In all, these deals are worth $100 million, or 5% of CAE’s $2.2 billion of annual revenue. The company’s military businesses supply 35% of its sales, which cuts its reliance on cyclical airlines. CAE is our #1 buy for 2015. < p> CENOVUS ENERGY INC. $21 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 833.2 million; Market cap: $17.5 billion; Price-to-sales ratio: 1.1; Dividend yield: 3.0%; TSINetwork Rating: Average; www.cenovus.com) is working on new phases at its Alberta oil sands projects that will boost its overall output by 25%. As a result, the company now plans to open a new marketing office in Houston, Texas, that will help it sell this additional crude to refineries on the U.S. Gulf Coast....

CAE INC. $14 (www.cae.com) has won several contracts for flight simulators and related equipment from airlines in China, South Korea, Russia and the U.S. In all, these deals are worth $130million, or 6% of the company’s $2.2 billion of annual revenue....

BOMBARDIER INC., Toronto symbols BBD.A $1.89 and BBD.B $1.86, jumped 42% this week in response to media reports that a Chinese company has offered to buy a majority stake in its passenger-railcar business, Bombardier Transportation. The reported price of $7 billion U.S. to $8 billion U.S. is roughly 2.4 times Bombardier’s $4.2-billion (Canadian) market cap (or the value of all of its outstanding shares). The company has denied that it plans to sell the railcar business. However, it still intends to sell shares in Bombardier Transportation through an initial public offering later this year—though it will continue to own a majority stake....

CAE INC. $14 (www.cae.com) has won several contracts for flightsimulators and related equipment from airlines in China, SouthKorea, Russia and the U.S. In all, these deals are worth $130million, or 6% of the company’s $2.2 billion of annual revenue. CAEhas now sold 15 flight simulators in its 2016 fiscal year, whichbegan April 1, 2015, after selling 41 in fiscal 2015. The stock is our#1 buy for 2015. BCE INC. $54 (www.bce.ca) recently started offering tri-band LTEadvanced (LTE-A) service, which is 1.9 times faster than its mainLTE network, in Halifax, Hamilton, Oakville and Toronto. Fasterwireless service should prompt more of its subscribers to upgradeto smartphones, which generate higher profits than regularcellphones. Best Buy. ENCANA CORP. $9.24 (www.encana.com) is selling its Haynesvillenatural gas properties in northern Louisiana. These assetsaccount for 9% of the company’s production but less than 3% of itscash flow. Selling them will let Encana focus on its more profitableproperties (two in Canada and two in the U.S.), which producelarge amounts of oil and natural gas liquids, such as propane andbutane. That cuts the company’s reliance on natural gas. Buy.

CAE INC., $14.81, Toronto symbol CAE, earned $50.6 million in its fiscal 2016 first quarter, which ended June 30, 2015, up 15.5% from $43.8 million a year earlier. Earnings per share rose at a slower pace of 11.8%, to $0.19 from $0.17, on more shares outstanding. That beat the consensus estimate of $0.18. Revenue gained 5.9%, to $557.0 million from $526.2 million, but that fell short of the consensus forecast of $571.1 million. About 90% of the company’s revenue comes from overseas, so it’s benefiting from the lower Canadian dollar. CAE gets 60% of its sales by selling flight simulators and pilot-training services to airlines, and this business’s revenue rose 8.8%. The company sold eight simulators during the period and expects its full-year total to be near the 41 it sold in fiscal 2015....

BOMBARDIER INC., Toronto symbols BBD.A $1.75 and BBD.B $1.63, has denied media reports that it’s planning to merge its passenger-railcar business (Bombardier Transportation) with Germany-based Siemens AG. However, the company still plans to sell shares in Bombardier Transportation through an initial public offering later this year—though it will continue to own a majority stake. Bombardier will probably use the cash from this sale to pay down its $8.9-billion U.S. long-term debt, which is a high 315% of its $3.7-billion (Canadian) market cap....