commodity

MAJOR DRILLING $8.42 (Toronto symbol MDI; TSINetwork Rating: Speculative) (1-866-264-3986; www.majordrilling.com; Shares outstanding: 79.2 million; Market cap: $666.7 million; Dividend yield: 2.4%) has agreed to buy privately held Taurus Drilling Services for $27.7 million, plus a further $11.5 million tied to performance.

Taurus, which operates in Canada, the U.S. and Mexico, performs underground longhole drilling for mining firms. Longhole drilling is used in operating mines to drill holes for various purposes, including blasting, drainage and providing electrical service and ventilation.

The acquisition looks like a great fit for Major, because it lets the company expand into mine-production drilling. That’s important, because it reduces Major’s focus on exploration drillers, which depend on volatile commodity markets for financing.

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MAJOR DRILLING GROUP INTERNATIONAL INC., $8.92, symbol MDI on Toronto, jumped over 14% this week after agreeing to buy privately held Taurus Drilling Services for $27.7 million, plus a further $11.5 million tied to performance. Taurus, which operates in Canada, the U.S. and Mexico, provides underground longhole drilling to mining companies. Longhole drilling is used in operating mines to drill holes for various purposes, including blasting, drainage, electrical service and ventilation. The acquisition includes Taurus’s 39 drill rigs, together with related equipment, inventory and contracts. Major is also keeping the company’s management and employees, which include experienced drillers....

SHERRITT INTERNATIONAL $4.45 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 297.3 million; Market cap: $1.3 billion; Dividend yield: 0.9%) recently sold off all of its coal interests for $793 million in cash. The company is now focused on nickel production, with operations in Cuba and Canada. As well, it has started up its 40%-owned Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan, and manages 506 megawatts of power generation capacity in Cuba. In the three months ended March 31, 2014, Sherritt’s revenue rose 13.0%, to $120.9 million from $107.0 million a year earlier. Cash flow per share was unchanged at $0.10....

ARCHER DANIELS MIDLAND CO., $47.85, New York symbol ADM, processes corn, wheat, soybeans, canola, flax seed, peanuts, cocoa and other crops into a wide variety of food ingredients, such as flour, oils and sweeteners. It is also the largest maker of ethanol from corn in the U.S. This week, the company agreed to buy Switzerland-based WILD Flavors, a privately held firm that supplies natural ingredients to over 3,000 food and beverage makers. Archer Daniels will pay 2.3 billion euros (or $3.1 billion U.S.) for WILD when the deal closes by the end of 2014. That’s equal to 10% of Archer Daniels’ $31.3-billion market cap (or the total value of all its outstanding shares)....

SHERRITT INTERNATIONAL $4.45 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 297.3 million; Market cap: $1.3 billion; Dividend yield: 0.9%) recently sold off all of its coal interests for $793 million in cash.

The company is now focused on nickel production, with operations in Cuba and Canada. As well, it has started up its 40%-owned Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan, and manages 506 megawatts of power generation capacity in Cuba.

In the three months ended March 31, 2014, Sherritt’s revenue rose 13.0%, to $120.9 million from $107.0 million a year earlier. Cash flow per share was unchanged at $0.10.

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CHEMTRADE LOGISTICS INCOME FUND (Toronto symbol CHE.UN; www.chemtradelogistics.com) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base-metal processors. These companies’ activities create sulphur, acid and other by-products that Chemtrade converts into useful chemicals, like sulphuric acid. The trust also offers a range of environmental services through its Marsulex subsidiary, such as improving air quality and handling and treating industrial waste. Chemtrade’s revenue rose 30.4% in the three months ended March 31, 2014, to $273.9 million from $210.0 million a year earlier....

AGRIUM INC. (Toronto symbol AGU; www.agrium.com) continues to benefit from its plan to expand its retail operations, which sell seed, fertilizer and other products to farmers. Steady sales from the company’s stores help offset its exposure to volatile fertilizer prices. Agrium’s 1,400 outlets in North America, South America and Australia now supply 75% of its sales and 40% of its earnings. The remaining 25% of sales and 60% of earnings mainly comes from making fertilizers from natural gas. Agrium also operates potash and phosphate fertilizer mines. Sales jumped 82.8%, from $9.1 billion in 2009 to $16.7 billion in 2012 (all amounts except share price and market cap in U.S. dollars), thanks to rising fertilizer prices and acquisitions of retail stores, particularly in Australia. However, lower fertilizer prices cut its 2013 sales to $15.7 billion. Earnings were $7.31 a share (or $1.1 billion) in 2013....

DREAM OFFICE REIT $29.14 (Toronto symbol D.UN; TSINetwork Rating: Extra Risk) (416-365-3535; www.dundeereit.com; Units outstanding: 103.4 million; Market cap: $3.1 billion; Dividend yield: 7.7%) is the new name for Dundee REIT. The trading symbol is unchanged. Dream owns and manages 24.6 million square feet of office and retail space in major cities across Canada. Its occupancy rate is 94.2%. In the quarter ended March 31, 2014, Dream’s revenue rose 9.0%, to $206.7 million from $189.6 million a year earlier. The trust continues to renew expiring leases at higher rates. It has also added 1.2 million square feet of space over the past year....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you advice on specific investment topics such as technical analysis. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Technical analysis can be a useful investment tool, but if you rely too heavily on it—or any other single facet of investing—you have little chance of profiting consistently.” Learning what not to do can be the hardest and costliest part of an investor’s education....

CHEMTRADE LOGISTICS INCOME FUND $21.19 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics.com; Units outstanding: 60.1 million; Market cap: $1.2 billion; Dividend yield: 5.7%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base-metal processors.

These companies’ activities create sulphur, acid and other by-products that Chemtrade converts into useful chemicals, like sulphuric acid. The trust also offers a range of environmental services through its Marsulex subsidiary, such as improving air quality and handling and treating industrial waste.

Chemtrade’s revenue rose 30.4% in the three months ended March 31, 2014, to $273.9 million from $210.0 million a year earlier.

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