canadian tire

Calloway Real Estate Investment Trust, $29.80, symbol CWT.UN on Toronto (Units outstanding: 107.1 million; Market cap: $3.2 billion; www.callowayreit.com), owns, develops and operates big-box outdoor malls across Canada. In all, Calloway owns 118 shopping centres and two office buildings, with 25.6 million square feet of leasable area. Its malls are mainly located in the suburbs of larger cities and have lots of room for parking and additional building. The trust gets 59% of its revenue from Ontario, 14% from Quebec, 9% from B.C., 4% from Manitoba, 4% from Saskatchewan, 3% from Newfoundland and Labrador, 3% from Alberta, 2% from Nova Scotia, 1% from New Brunswick and 1% from Prince Edward Island....

CANADIAN PACIFIC RAILWAY LTD., $74.72, Toronto symbol CP, has appointed Hunter Harrison as a director and its new chief executive officer. Mr. Harrison is the former CEO of Canadian National Railway Co. (Toronto symbol CNR). CP feels Mr. Harrison will duplicate his success at CN, which included improving efficiency and speeding up deliveries. New trains and the recent drop in oil prices should also boost CP’s profitability....

CGI GROUP INC., $23.37, Toronto symbol GIB.A, jumped 13% this week after it agreed to buy Logica plc, a U.K.-based firm that provides computer outsourcing services in 36 countries. Logica gets 60% of its sales from the U.K. government. CGI will pay roughly $2.8 billion for Logica. That’s equal to 52% of CGI’s $5.4-billion market cap, so it’s a major acquisition for the company. But Logica is a good fit with CGI, which is Canada’s largest provider of computer outsourcing services. Both companies’ services automate certain routine functions, like accounting and buying supplies. That makes their clients more efficient and lets them focus on their main businesses....

Tip of the week: There are a few good reasons to pay a little extra money for the right class of shares in the stocks you buy.

CANADIAN TIRE CORP. $67 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.5 million; Market cap: $5.5 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.canadiantire.ca) gets 90% of its revenue and 80% of its earnings from its various retail stores.

These outlets include 488 Canadian Tire stores, which specialize in automotive, household and sporting goods. The company owns these stores, but franchisees operate most of them. Canadian Tire also operates 289 gas stations and 87 PartSource auto parts stores.

The company has added a number of new product lines by purchasing other retailers. For example, in 2001 it bought the Mark’s Work Wearhouse chain of casual clothing stores. The company now has 385 Mark’s stores and carries a variety of Mark’s products in its main Canadian Tire stores.

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Many people try to learn more about investing by gathering up loads of information. But you also need to learn how to absorb and organize your information, so that you recognize and remember the essential aspects of it. I’ve found that the best way to do that is by writing about it. That’s just the way your brain works. Writing about something forces you to think deeply about it—or at least more deeply than if you’re not writing about it. When I decide to write about an investment or an investment-related subject, I start by gathering up information—hard facts, plus other people’s opinions on those facts. By the time I start to write, I may have read, scanned or simply browsed through 20,000 or more words on the subject....

TELUS CORP., Toronto symbols T $59.83 and T.A $58.10, has dropped its plan to merge its common shares and its non-voting class A shares into a single class. The company had proposed to convert each non-voting share into one common share. However, the plan had little chance of succeeding, because U.S.-based hedge fund Mason Capital, which now owns around 19% of Telus’s common shares and a small portion of the non-voting shares, said it would vote against the proposal. Mason is using a complex stock-trading strategy that would let it lock in a profit if shareholders reject the plan. Telus still wants to eliminate the dual-class structure, and will probably reintroduce the proposal sometime in the next few months. One step it could take to help ensure the plan’s approval would be to have less time between the reintroduction of the plan and the vote. That way, Mason and other big investors who oppose the proposal would have less time to buy shares and block it....

In January 2011, U.S. department store operator Target Corp. (New York symbol TGT) announced that it was expanding into Canada. The news helped push down Canadian Tire’s shares from $66 to $52 in August 2011. However, the stock quickly rebounded. After all, Canadian Tire has many years of experience competing with large U.S. retailers like Wal-Mart and Home Depot. That will help it handle Target. As well, it has been spending heavily on new stores and acquisitions. These measures have already attracted new customers and pushed up its earnings. CANADIAN TIRE CORP. $67 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.5 million; Market cap: $5.5 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.canadiantire.ca) gets 90% of its revenue and 80% of its earnings from its various retail stores....

Partners REIT, $7.49, symbol PAR.UN on Toronto (Units outstanding: 18.2 million; Market cap: $136.3 million; www.partnersreit.com), owns 22 retail properties in B.C., Alberta, Manitoba, Ontario and Quebec. In all, these shopping centres contain 1.7 million square feet of leasable space. Partners’ properties include malls and shopping centres that are mostly located in smaller cities, such as London, Ontario, and Selkirk, Manitoba. Its largest tenants include Canadian Tire, Shoppers Drug Mart, Sears, Rona and Metro. Partners completed its purchase of NorRock Realty Finance Corporation earlier this year. NorRock holds a portfolio of mortgage loans and investments connected to Canadian commercial real estate. After it closed the deal, Partners consolidated its units on a one-for-four basis....

PENGROWTH ENERGY CORP., $9.78, Toronto symbol PGF, is buying rival oil producer NAL Energy Corp. (Toronto symbol NAE) in an all-stock transaction. Under the terms of the deal, NAL investors will receive 0.86 of a Pengrowth common share for each share they hold. That will give them 26% of the combined company. The plan needs shareholder and other approvals, but Pengrowth and NAL aim to complete the merger by May 31, 2012. Adding NAL’s properties in Alberta and B.C. (54% natural gas and 46% oil) will increase Pengrowth’s projected 2012 production to between 86,000 and 89,000 barrels of oil equivalent a day, from its earlier range of 74,500 to 76,500 barrels....