dividends paid
IDEXX LABORATORIES INC. $53 (Nasdaq symbol IDXX; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 58.6 million; Market cap: $3.1 billion; Price-to-sales ratio: 3.0; No dividends paid; WSSF Rating: Average) makes equipment that veterinarians use to detect diseases in animals. It also makes systems that detect contaminants in water and milk. The company sells its products in over 100 countries. Idexx began operating in 1983, and dominates its niche market. Despite its long history of success, many investors have probably never heard of Idexx, and few brokers cover it. Revenue rose 61.7%, from $638.1 million in 2005 to $1.03 billion in 2009. Earnings rose 54.1%, from $79.3 million in 2005 to $122.2 million in 2009....
TETHYS PETROLEUM $1.79 (Toronto symbol TPL; SI Rating: Speculative) (416-572-2065; www.tethyspetroleum.com; Shares outstanding: 157.2 million; Market cap: $281.3 million; No dividends paid) is producing and exploring for oil and natural gas in the Central Asian countries of Kazakhstan, Uzbekistan and Tajikistan. Tethys’ properties in Kazakhstan and Uzbekistan produce about 17 million cubic feet of gas and 960 barrels of oil per day. In the three months ended September 30, 2009, Tethys’ revenue rose 63.5%, to $2.4 million from $1.5 million. (All figures except share price and market cap in U.S. dollars.) Cash flow per share was negative $0.01, an improvement over negative $0.05 a year earlier....
KINGSWAY FINANCIAL SERVICES $1.70 (Toronto symbol KFS; SI Rating: Speculative) (905-629-7888; www.kingswayfinancial.com; Shares outstanding: 52.1 million; Market cap: $88.6 million; No dividends paid) has agreed to sell its Jevco Insurance Co. subsidiary for $263 million. This price does not include a $40-million dividend that Jevco will pay Kingsway before the sale is completed. Jevco sells insurance to high-risk drivers, as well as owners of motorcycles, snowmobiles and recreational vehicles. Kingsway will use the proceeds to pay down debt and shore up its capital. Its debt of $336.2 million is 3.8 times its market cap....
CHIPOTLE MEXICAN GRILL $104.46 (New York symbol CMG; SI Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.5 million; Market cap: $3.3 billion; No dividends paid) is a Denver-based Mexican-restaurant chain. Founded in 1993, Chipotle (pronounced chi-POATlay) charges slightly higher prices than fast-food chains, but offers higher-quality food, including naturally raised meat, and better decor and service. Chipotle has 956 restaurants, including its first outside of the U.S., in Toronto. In April, Chipotle plans to open a restaurant in London, England....
CAMECO CORP. $29.62 (Toronto symbol CCO; SI Rating: Extra Risk) (306-956-6200; www.cameco.com; Shares outstanding: 392.8 million; Market cap: $11.6 billion; Dividend yield 0.8%) is the world’s largest uranium producer. Its large, high-grade reserves, low-cost operations, significant...
AEROPOSTALE INC. $34.83 (New York symbol ARO; SI Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding: 62.7 million; Market cap: $2.2 billion; No dividends paid) is splitting its shares on a 3-for-2 basis. Shareholders will get one additional Aeropostale share for every two shares they hold. The company will have 94 million outstanding shares after the split. It now has 62.7 million outstanding shares. When a stock splits, the percentage of the company that you own is unchanged. You simply hold more shares, which are each worth proportionally less. Some studies have shown that companies that split their shares are better investments than those that do not carry out splits, but that confuses cause and effect. When a company’s stock goes up a great deal, it has an incentive to split the stock and stop it from going to higher prices where it might be less liquid....
FIRSTSERVICE CORP. $20.54 (Toronto symbol FSV; SI Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.3 million; Market cap: $581.3 million; No dividends paid) serves the following areas of the real-estate market: commercial real estate; residential property management; and property improvement. FirstService has more than 17,000 employees worldwide. In the three months ended September 30, 2009, FirstService’s revenue rose slightly, to $451.1 million from $450.1 million a year earlier. (All figures except share price in U.S. dollars.) Excluding one-time items, earnings per share fell 11.8%, to $0.60 from $0.68. However, cash flow rose 5.6%, to $0.95 a share from $0.90 a share. FirstService’s long-term debt of $261.5 million is a manageable 45% of its $581.3-million market cap.
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Overall gains in a slow economy
CGI GROUP INC. $14 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 292.7 million; Market cap: $4.1 billion; Price-to-sales ratio: 1.1; No dividends paid; SI Rating: Extra Risk) is Canada’s largest provider of computer-outsourcing services. In CGI’s first quarter, which ended December 31, 2009, its earnings rose 13.0%, to $80.7 million from $71.4 million a year earlier. Earnings per share rose 17.4%, to $0.27 from $0.23, on fewer shares outstanding. These figures exclude unusual tax refunds. Revenue fell 8.7%, to $913.0 million from $1.0 billion. CGI gets 40% of its revenue from outside of Canada, so the higher Canadian dollar hurt the company’s overall revenue. However, CGI won $1.6 billion of new contracts in the latest quarter. Its order backlog of $11.4 billion is three times its annual revenue. CGI Group, our #1 stock for 2010, is a buy.
APPLE INC. $208 (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 906.3 million; Market cap: $188.5 billion; Price-to-sales ratio: 4.1; No dividends paid; WSSF Rating: Average) has gained 2,089.5% since we first recommended it at $9.50 (adjusted for splits) in our November 2000 issue. Back then, the iPod was still a year away and Apple was struggling to compete with cheaper computers that ran Microsoft Windows. But we liked it because its computers continued to dominate certain industries, such as graphic design and publishing. The stock was also cheap, at around 15 times earnings, and it had little debt. To top it off, it held cash of $6 a share. Apple now trades at 26.4 times the $7.89 a share it will likely earn in its current fiscal year (which ends September 30). That p/e ratio would be higher still, but Apple recently adopted new accounting rules that let it recognize more revenue from the iPhone at the time of sale, instead of spreading it out over two years. This raised its earnings and cut its p/e....
CEDAR FAIR L.P. $13 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.2 million; Market cap: $717.6 million; Price-to-sales ratio: 0.8; No dividends paid since November 2009; WSSF Rating: Average) owns 11 amusement parks and seven water parks, mostly in the midwestern and northeastern U.S. It recently accepted an $11.50-a-unit takeover offer from Apollo Global Management, a private-equity firm. However, another private-equity firm, Q Funding III LP, owns 10% of Cedar Fair and is opposed to the takeover. The possibility of a competing offer is why the stock is trading above $11.50. Cedar Fair is still a hold.