dividends paid

COMPTON PETROLEUM $1.02 (Toronto symbol CMT; SI Rating: Speculative) (403-237-9400; www.comptonpetroleum.com; Shares outstanding: 263.6 million; Market cap: $268.9 million; No dividends paid) explores for oil and natural gas in western Canada. About 83% of its production is natural gas. In the three months ended December 31, 2009, Compton’s cash flow per share fell sharply, to $0.03 from $0.23 a year earlier. Revenue fell 45%, to $57.6 million from $104.8 million. Lower oil and gas prices contributed to the declines. As well, the company saw a 22.2% drop in production because it sold land to pay down debt....

AASTRA TECHNOLOGIES $33.27 (Toronto symbol AAH; SI Rating: Speculative) (905-760-4200; www.aastra.com; Shares outstanding: 13.9 million; Market cap: $462.5 million; Dividend yield: 2.4%) develops and markets products and systems for accessing communication networks, including the Internet. In the three months ended December 31, 2009, Aastra’s earnings per share jumped to $1.11. A year earlier, the company earned $0.10 a share. Despite the higher earnings, revenue fell 16.8%, to $217.8 million from $261.8 million a year earlier, mainly because of the weak economy. However, revenue was up 9.6% from the previous quarter. In April 2008, the company bought the business-communications division of Swedish telecom giant Ericsson. Aastra has now finished integrating this purchase. That has eliminated overlapping costs and pushed up the company’s profits....

YAMANA GOLD INC. $10.28 (Toronto symbol YRI; SI Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 733.4 million; Market cap: $7.5 billion; Dividend yield: 0.4%) reports that its revenue soared 355.2% in the three months ended December 31, 2009, to $399.8 million from $87.8 million a year earlier. (All figures except share price and market cap in U.S. dollars). Earnings (before one-time items) shot up 716.7%, to $100.9 million from $12.4 million. Per-share earnings rose 600.0%, to $0.14 from $0.02, on more shares outstanding. Cash flow per share rose 320.0%, to $0.21 from $0.05. Record high production and gold prices were the main reasons for the gains. The company produced 325,252 ounces of gold in the latest quarter, up 27.7% from 254,774 a year earlier. The rise is partly because its new Gualcamayo mine in Argentina started producing gold in July 2009. The company holds cash of $170.1 million. Its $529.5 million of long-term debt is just 7% of its market cap....

PRECISION DRILLING TRUST $8.68 (Toronto symbol PD.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 275.6 million; Market cap: $2.4 billion; Price-to-sales ratio: 1.0; No dividends paid since February 2009; SI Rating: Extra Risk) provides contract-drilling services to oil and natural-gas producers. The trust will convert to a corporation in May 2010. That’s because Ottawa will start taxing income trusts in 2011. Precision did not reveal the details of the conversion. However, investors will only be liable for capital-gains taxes when they sell. The switch will also make it easier for Precision to attract foreign investors. Precision Drilling is a buy.

TECK RESOURCES LTD. $42 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 589.1 million; Market cap: $24.7 billion; Price-to-sales ratio: 2.7; No dividends paid since July 2008; SI Rating: Extra Risk) is a leading producer of metallurgical coal, a key ingredient in steelmaking. Coal accounted for 46% of Teck’s 2009 revenue, and 54% of its earnings. Teck also produces copper (28% of revenue, 31% of earnings) and zinc (26%, 15%). The company has reduced its total debt by $6.7 billion since it borrowed $9.8 billion U.S. to buy Fording Canadian Coal Trust in October 2008. Sales of gold mines and other assets helped Teck raise cash for debt repayments. As well, Teck sold $1.7 billion of class B subordinate-voting shares (which carry one vote per share) to a Chinese sovereign wealth fund. This fund now owns 17.5% of Teck’s class B shares, and has a 6.7% voting interest. Insiders still control 61.8% of Teck’s total votes through class A multiple voting shares (100 votes per share). Despite the dilution caused by the extra shares, this investment is helping Teck win new supply contracts from Chinese steelmakers....

AUTODESK INC. $28 (Nasdaq symbol ADSK; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 229.7 million; Market cap: $6.4 billion; Price-to-sales ratio: 3.8; No dividends paid; WSSF Rating: Average) makes computer-assisted design software that lets engineers and architects analyze their products’ performance early in the design process. That saves time and money, and improves the quality of the final product. In Autodesk’s 2010 fiscal year, which ended January 31, 2010, its revenue fell 26.0%, to $1.7 billion from $2.3 billion in the prior year. That’s mainly because several of Autodesk’s customers put off upgrading their computer-aided design software because of the weak economy. In response to the lower revenue, Autodesk cut over 10% of its workforce and consolidated certain facilities. These moves lowered its expenses by at least $250 million in the latest year....

SYMANTEC CORP. $17 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 806.2 million; Market cap: $13.7 billion; Price-to-sales ratio: 2.3; No dividends paid; WSSF Rating: Average) makes software that protects computers from viruses and intruders. Computer sales have risen with the recent launch of Microsoft’s Windows 7 operating system. Symantec has deals to pre-install its Norton Anti-Virus software on new computers, so it stands to gain as more consumers buy new computers to get Windows 7. As well, the company has shifted its focus to selling services to its business customers. Long-term service contracts give Symantec more predictable revenue streams, and cut its risk. In Symantec’s third quarter, which ended January 1, 2010, its earnings before one-time items fell 7.4%, to $326.0 million from $352.0 million a year earlier. Earnings per share fell 4.8%, to $0.40 from $0.42, on fewer shares outstanding. Revenue rose 0.8%, to $1.55 billion from $1.54 billion. Symantec gets about half of its revenue from outside the U.S. If you adjust for foreign-exchange rates, revenue would have fallen by 3%....

ADOBE SYSTEMS INC. $35 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.1 million; Market cap: $18.3 billion; Price-to-sales ratio: 6.0; No dividends paid since June 2005; WSSF Rating: Average) makes Abode Acrobat, which lets users easily create, edit and share electronic documents in the popular PDF format. As well, graphic designers use Adobe’s Creative Suite of programs to create web pages and print publications. The company also makes Adobe Flash. This program lets web sites display graphics and animation. In October 2009, Adobe completed its $1.8-billion purchase of Omniture Inc., which makes software that measures and analyzes web-site traffic. Adobe will sell this software to its customers, who can use the information it provides to improve their web pages and increase their online ad revenues. Omniture will add around $335 million a year to Adobe’s revenue. Adobe earned $814.7 million, or $1.54 a share, in the year ended November 27, 2009. That’s down 28.3% from $1.1 billion, or $2.07 a share, in the prior year. These figures exclude several unusual items, including costs related to the Omniture purchase. Revenue fell 17.7%, to $2.9 billion from $3.6 billion....

An improving global economy should push up software sales in 2010. As well, software makers typically earn higher profit margins than other technology companies, so even a modest sales increase would sharply lift these companies’ earnings. Even so, the software industry remains highly volatile. To cut your risk, you should stick with well-established software companies, such as these four. All are market leaders, and have the financial strength to keep improving their products and developing new ones. Still, we only see three as buys right now. MICROSOFT CORP. $29 (Nasdaq symbol MSFT; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 8.8 billion; Market cap: $255.2 billion; Price-to-sales ratio: 4.2; Dividend yield: 1.8%; WSSF Rating: Above Average) is the world’s largest software company. Its Windows operating system runs 90% of the world’s computers. As well, the company’s Office suite of programs dominates the business-software field. Together, Windows and Office account for 60% of Microsoft’s revenue and 80% of its earnings....

APPLE INC. $201 (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 906.8 million; Market cap: $182.3 billion; Price-to-sales ratio: 3.8; No dividends paid; WSSF Rating: Average) will start selling its new iPad tablet computer in late March in the U.S. Apple could sell 6 million iPads in the first year. When you account for the cost of chips and other parts, that would generate roughly $2.6 billion in gross profits. To put this figure in context, Apple earned $3.4 billion, or $3.67 a share, in its first quarter, which ended December 26, 2009. The iPad will also spur demand for movies, music and books at Apple’s iTunes web store. Apple is a buy.