dividends paid

CGI GROUP INC. $16 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 285.6 million; Market cap: $4.6 billion; Price-to-sales ratio: 1.3; No dividends paid; SI Rating: Extra Risk) continues to win new computer-outsourcing contracts. For example, the company recently signed a seven-year deal with Ontario’s Beer Store retail chain. Under the contract, CGI will help The Beer Store improve the efficiency of its distribution network. This will help the Beer Store expand its sales and earnings by avoiding shortages of top-selling beer brands. The company did not reveal the contract’s exact value, but it did say that it is a multi-million-dollar deal. As well, CGI will manage the Atlantic Lottery Corp.’s data centre and provide related support services. This seven-year deal is worth $125 million. These contracts are tiny next to CGI’s annual revenue of $3.8 billion. But long-term deals like these give it steady, predictable revenue streams. They also help CGI build customer loyalty, and sell more services to new clients....

NVIDIA CORP. $12 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 572.2 million; Market cap: $6.9 billion; Price-to-sales ratio: 1.8; No dividends paid; WSSF Rating: Average) earned $137.6 million, or $0.23 a share, in its first quarter, which ended May 2, 2010. A year earlier, it lost $201.4 million, or $0.37 a share. However, the year-earlier loss included a $140.2-million charge related to its buyback of worthless stock options from its employees. Revenue jumped 50.8%, to $1.0 billion from $664.2 million. The chipmaker spent 21.8% of its revenue on research in the latest quarter. Inventories rose by 17% in the past three months, which suggests chip demand is slowing. However, Nvidia’s new focus on chips for mobile devices makes it less reliant on cyclical computer sales. Nvidia is a buy.

Sherwin-Williams and La-Z-Boy are doing a good job of cutting costs in response to weak housing markets, which are hurting paint and furniture demand. The resulting savings have boosted both companies’ earnings and share prices. However, their sales will likely remain weak for the next year or two. SHERWIN-WILLIAMS CO. $74 (New York symbol SHW; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 109.7 million; Market cap: $8.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.9%; WSSF Rating: Above Average) is North America’s largest paint producer. Sherwin also operates over 3,300 paint stores, which account for 60% of its sales. In the three months ended March 31, 2010, Sherwin’s earnings fell 12.5%, to $32.6 million from $37.3 million a year earlier. Sherwin is an aggressive buyer of its own stock. Due to fewer shares outstanding, earnings per share fell 6.3%, to $0.30 from $0.32....

MOTOROLA INC. $7.30 (New York symbol MOT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 2.3 billion; Market cap: $16.8 billion; Price-to-sales ratio: 0.8; No dividends paid since January 2009; WSSF Rating: Average) has settled a three-year-long patent dispute with Research in Motion Ltd. (Nasdaq symbol RIMM). Research in Motion makes the popular BlackBerry smartphone. Research in Motion will pay Motorola an undisclosed sum, as well as regular royalties related to certain wireless technologies. The two companies also agreed to drop all outstanding lawsuits. Setting this dispute improves the prospects for Motorola’s cellphone business, which it plans to spin off as a separate company next year. However, this business is still losing money. It also faces increasing competition from other smartphones, including Apple’s iPhone and the BlackBerry....

DOMINO’S PIZZA $12.96 (New York symbol DPZ; SI Rating: Average)(734-930-3030; www.dominos.com; Shares outstanding: 59.1 million; Market cap: $785.7 million; No dividends paid) is the world’s largest chain of pizza stores that offer takeout and delivery. Domino’s operates 9,036 stores in the U.S. and over 60 countries. Franchisees run most outlets. Excluding one-time items, Domino’s earnings per share jumped 75% in the three months ended March 28, 2010, to $0.35 from $0.20. Sales rose 18.4%, to $381.1 million from $321.8 million. U.S. same-store sales rose 14.3%. International same-store sales gained 4.2%. The company’s labour, rent and interest costs fell during the quarter. These savings were only partly offset by higher food ingredient prices. Domino’s continues to boost its sales by aggressively marketing its “New Inspired Pizza.” The company has changed its main pizza recipe by adding seasoned crusts, as well as new tomato sauces and cheeses. As well, its express Internet ordering system, which lets customers track their orders, has proven very popular....

BREAKWATER RESOURCES $2.94 (Toronto symbol BWR; SI Rating: Speculative) (416-363-4798; www.breakwater.ca; Shares outstanding: 70.2 million; Market cap: $206.5 million; No dividends paid) has carried out a consolidation (or “cutback” or “reverse split”) of its shares on a 1-for-10 basis. That cut its shares outstanding from 702 million to 70.2 million. Companies typically cut back their shares to make it easier for institutional investors to buy without violating rules against investing in low-priced stocks (under, say, $1 or $5 a share.) Reverse stock splits can hurt investor confidence and shrink the value of a given holding – give it a “haircut,” as brokers say – by as much as 25%. For pennies with real assets, however, the haircut is often temporary....

VERIGY LTD. $9.99 (Nasdaq symbol VRGY; SI Rating: Extra Risk) (1-800-447-8378; www.verigy.com; Shares outstanding: 59.3 million; Market cap: $592.7 million; No dividends paid) earned $2 million, or $0.03 a share, excluding restructuring charges in the three months ended April 30, 2010. That’s a big improvement over a loss of $30 million, or $0.52 a share, in the year-earlier quarter. Revenue jumped 69%, to $120 million from $71 million. That’s mainly because of strong demand for the company’s test systems from makers of electronic devices used in tablet computers, smartphones and other wireless products. Verigy is a buy.

ALARMFORCE INDUSTRIES $7.16 (Toronto symbol AF: SI Rating: Speculative) (1-800-267-2001; www.alarmforce.com; Shares outstanding: 12.2 million; Market cap: $87.6 million; No dividends paid) reports that it earned $2.2 million, or $0.18 a share, in the six months ended April 30, 2010. That’s up 29.4% from $1.7 million, or $0.14 a share, a year earlier. The home-security firm’s revenue rose 8.5%, to $18.2 million from $16.8 million. Demand for security systems is growing steadily. In all, the company had 107,900 subscribers at the end of the most recent quarter, up 12.4% from 96,000 a year earlier....

TRIMBLE NAVIGATION $30.25 (Nasdaq symbol TRMB; SI Rating: Speculative) (408-481-6914; www.trimble.com; Shares outstanding: 121.3 million; Market cap: $3.7 billion; No dividends paid) makes global positioning system (GPS) devices and technology for four main markets: 1) Engineering and construction accounts for the largest share (51%) of Trimble’s sales. 2) Agricultural GPS products (26% of sales) help farmers cut costs and increase yields. For example, GPS allows for more precise plowing, seeding and fertilizing, even at night....

RUGGEDCOM INC. $13.36 (Toronto symbol RCM; SI Rating: Speculative) (1-888-264-0006; www.ruggedcom.com; Shares outstanding: 12.1 million; Market cap: $162.2 million; No dividends paid) makes computer-networking equipment that is used in harsh environments. In the three months ended March 31, 2010, RuggedCom’s sales rose 11.3%, to $19.4 million from $17.4 million. Despite the higher sales, the company’s earnings fell 67.8%, to $1.1 million, or $0.09 a share, from $3.4 million, or $0.29 a share, a year earlier. However, one-time costs were the main reason for the drop. These expenses included costs to integrate WiNetworks (which it bought in September 2009), a stronger Canadian dollar (which lowered the value of RuggedCom’s foreign sales), and certain research and marketing expenses....