commodity

MAJOR DRILLING $7.07 (Toronto symbol MDI; TSINetwork Rating: Speculative) (1-866- 264-3986; www.majordrilling.com; Shares outstanding: 80.1 million; Market cap: $566.6 million; Dividend yield: 0.6%) reports that its revenue fell 2.8% in the three months ended January 31, 2015, to $69.8 million from $71.8 million a year earlier. The company lost $0.24 a share, compared to a year-ago loss of $0.16 a share. In the latest quarter, Major’s profit margins fell sharply because it performed less highpriced specialized exploration drilling and more production-related drilling. To conserve cash until commodity prices start to rebound and its customers increase their drilling, Major is cutting its semi-annual dividend to $0.02 a share from $0.10. That gives the stock a 0.6% yield....

WAJAX CORP. $24.10 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.8 million; Market cap: $404.4 million; Dividend yield: 4.2%) sells and services cranes, forklifts and other heavy equipment. It also provides related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions). The company’s customers are in the natural resource, construction, manufacturing and transportation industries. In the three months ended December 31, 2014, Wajax’s revenue fell 1.4%, to $386.1 million from $391.7 million a year earlier. The decline was mostly due to lower sales to mining companies and oil and gas customers....

Finning and Precision Drilling (see box) supply vital equipment and services to resource firms. Both stocks have suffered in the past few months, as slumping prices for oil and other commodities have hurt their revenue and earnings. However, both companies are well-established leaders, which will help them hang on to clients until resource prices rebound. We still like both, but only aggressive investors should consider Precision. FINNING INTERNATIONAL INC. $24 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 172.4 million; Market cap: $4.1 billion; Price-to-sales ratio: 0.6; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.finning.com) is the world’s largest dealer of tractors, bulldozers and trucks made by Caterpillar Inc. (New York symbol CAT). It also sells heavy equipment made by other firms. Finning’s clients are mainly in the mining, forest products and construction industries....

MITEL NETWORKS CORP., $12.24, symbol MNW on Toronto, has agreed to buy Mavenir Systems (symbol MVNR on New York) for $560 million U.S. in cash and stock. Right now, Mitel mainly offers communication services to businesses over land-line phones. Mavenir will help Mitel move into the market for voice-over long-term evolution, or VoLTE. This technology repackages voice calls as data and transmits them over wireless networks. It’s quickly becoming the standard for high-speed wireless communications. Users of Mavenir’s networking software include T-Mobile and Verizon Communications. In all, the company serves 130 telecom firms, including 15 of the world’s 20 largest mobile carriers....

ISHARES MSCI AUSTRALIA ETF $23.58 (New York symbol EWA; buy or sell through brokers) is an ETF that holds the 72 largest Australian stocks. Its MER is 0.49%. The fund’s top holdings include Commonwealth Bank of Australia, 11.8%; Westpac Banking Corp., 9.3%; BHP Billiton, 8.5%; Australia and New Zealand Banking Group, 7.7%; National Australia Bank, 7.1%; Wesfarmers, 3.9%; CSL Ltd., 3.5%; Woolworths, 3.1%; Rio Tinto, 2.2%; Telstra Group, 2.2%; Woodside Petroleum, 2.1%; Macquarie Group, 1.7%; and Scentre Group, 1.6%. Australia benefits from its stable banking and political systems. It’s also rich in natural resources, and while low commodity prices have hurt its economy lately, its close proximity to Asian markets with vast potential, including India and China, gives it strong long-term prospects....

WAJAX CORP. $24.10 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.8 million; Market cap: $404.4 million; Dividend yield: 4.2%) sells and services cranes, forklifts and other heavy equipment. It also provides related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions).

The company’s customers are in the natural resource, construction, manufacturing and transportation industries.

In the three months ended December 31, 2014, Wajax’s revenue fell 1.4%, to $386.1 million from $391.7 million a year earlier. The decline was mostly due to lower sales to mining companies and oil and gas customers.

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MAJOR DRILLING $7.07 (Toronto symbol MDI; TSINetwork Rating: Speculative)(1-866- 264-3986; www.majordrilling.com; Shares outstanding: 80.1 million; Market cap: $566.6 million; Dividend yield: 0.6%) reports that its revenue fell 2.8% in the three months ended January 31, 2015, to $69.8 million from $71.8 million a year earlier. The company lost $0.24 a share, compared to a year-ago loss of $0.16 a share.

In the latest quarter, Major’s profit margins fell sharply because it performed less highpriced specialized exploration drilling and more production-related drilling.

To conserve cash until commodity prices start to rebound and its customers increase their drilling, Major is cutting its semi-annual dividend to $0.02 a share from $0.10. That gives the stock a 0.6% yield.

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AGRIUM INC., $144.38, Toronto symbol AGU, hit a new all-time high of $145.07 this week after reporting better-than-expected quarterly earnings. It also raised its outlook for 2015. In the three months ended December 31, 2014, Agrium’s earnings gained 4.1%, to $0.77 a share from $0.74 a year earlier (all amounts expect share price in U.S. dollars). These results exclude unusual items, mainly losses on contracts the company uses to lock in foreign exchange rates and commodity prices. On that basis, the latest earnings easily beat the consensus estimate of $0.60 a share. Revenue fell 5.7%, to $2.7 billion from $2.9 billion. That’s because Agrium had to cut production at its Vanscoy potash mine in Saskatchewan to complete a major expansion. An unplanned outage at its Redwater, Alberta, plant also slowed nitrogen-fertilizer output. Sales at its retail stores, which sell fertilizer and seeds to farmers, declined 2.1%....

Low interest rates have spurred strong investor interest in these two high-yielding master limited partnerships (MLPs). Both have strong businesses that give them lots of cash flow for distributions. However, we feel Cedar Fair (see box) is the better choice, because Buckeye’s aggressive growth-by-acquisition strategy adds risk. Still, there are a few things Canadian investors should keep in mind: for one, you must pay a 35% U.S. withholding tax on income from MLPs, though you can usually claim a non-refundable Canadian tax credit to offset that. As well, MLPs are not suitable for RRSPs or RRIFs....

RESTAURANT BRANDS INTERNATIONAL INC., $52.21, Toronto symbol QSR, took its current form on December 12, 2014, as a result of Burger King Worldwide’s (old symbol BKW) acquisition of Tim Hortons Inc. (old symbol THI). Restaurant Brands is the world’s third-largest fast-food chain, after McDonald’s and Yum Brands, with 14,372 Burger King outlets and 4,671 Tim Hortons locations in 100 countries. In the three months ended December 31, 2014, the company lost $514.2 million, or $2.52 a share, compared to a profit of $66.8 million, or $0.19 (all amounts except share price in U.S. dollars). If you exclude merger costs and other unusual items, gross earnings before depreciation, interest and taxes rose 23.1%....