FirstService Corp.

CHEMTRADE LOGISTICS INCOME FUND, $18.45, symbol CHE.UN on Toronto, jumped almost 9% this week after it agreed to buy specialty chemicals maker General Chemical Corp. for $860 million. General makes a wide range of chemicals, including aluminum sulphate, aluminum chlorohydrate and ferric sulphate (all of which are used in water treatment), as well as ingredients for prescription drugs, nutritional supplements and veterinary products. The company also sells and regenerates sulphuric acid. In addition to water treatment and pharmaceuticals, its markets include oil refining, pulp and paper, agriculture and food and beverage. This is a huge acquisition for Chemtrade: it would more than double its $756.4-million market cap. A major purchase like this can always backfire, but it will likely be a good fit, offering Chemtrade both growth prospects and diversification....

WYNDHAM WORLDWIDE CORP., $67.35, symbol WYN on New York, reported higher revenue and earnings in the latest quarter, and the shares rose to a new all-time high. In the three months ended September 30, 2013, the hotel and resort operator’s revenue rose 12.8%, to $1.43 billion from $1.27 billion a year earlier. The company gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up Wyndham’s occupancy rate by 1.9%. Before one-time items, earnings rose 24.8%, to $1.41 a share from $1.13. The company continues to buy back its stock. In the latest quarter, it repurchased 2.7 million shares for $160 million. In 2012, it bought back 12.9 million shares for $623 million....

THE CHURCHILL CORP. $8.87 (Toronto symbol CUQ; TSINetwork Rating: Speculative) (780-454-3667; www.churchillcorporation.com; Shares outstanding: 24.7 million; Market cap: $218.7 million; Dividend yield: 5.4%) provides building construction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to government and private sector clients, mainly in Western Canada.

Churchill’s Stuart Olson Dominion Construction division has just won $400 million worth of contracts....

TRILOGY ENERGY CORP., $28.36, symbol TET on Toronto, is up over 9% since last week after it announced positive results from the 9-10 well at its Kaybob Montney operations in Alberta. Trilogy used horizontal drilling, which involves drilling down and then “across” to oil deposits, to reach the oil in the Kaybob Montney pool. It then used fracturing—collapsing rock using sand pumped at high pressure—to bring the oil to the surface. The well flowed at an early-stage rate of 438 barrels a day. To put that in perspective, Trilogy’s daily production averages 37,209 barrels of oil equivalent (including gas). The successful production also indicates that the oil pool likely extends beyond the previously identified boundaries....

FIRSTSERVICE CORP. $41.59 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 31.9 million; Market cap: $1.4 billion; Dividend yield: 1.0%) is selling its 300- employee Field Asset Services subsidiary to Assurant Inc. for $55 million. This business specializes in preserving the value of foreclosed and abandoned homes by performing ongoing services, such as inspections, interior and exterior maintenance, trash removal, lawn maintenance and winterization.

FirstService bought Field Asset Services in 2007, and the business benefited from the housing crisis in the U.S., which saw many properties foreclosed and abandoned.

The sale is timely for FirstService, because increased U.S. government regulations are slowing the rate at which banks and other mortgage providers can foreclose on homeowners who are behind on their payments. Housing markets are also slowly recovering. As a result, there have been fewer newly foreclosed houses for Field Asset Services to manage.
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WESTJET AIRLINES LTD., $21.36, symbol WJA on Toronto, moved up almost 7% this week after reporting record quarterly earnings. In the three months ended June 30, 2013, the company’s earnings rose 5.2%, to $44.7 million from $42.5 million a year earlier. That marks WestJet’s 33rd consecutive quarter of profitability. Earnings per share rose 9.7%, to $0.34 from $0.31, on fewer shares outstanding. Revenue increased 4.3%, to $843.7 million from $809.3 million a year earlier. WestJet shares fell as low as $19.65 earlier this week after reaching an all-time high of $25.47 in April 2013. The decline was mostly due to investor concern that the company’s profit growth could slow if it can’t fill the new planes it’s adding to the same level as its current fleet. That includes its new Canadian regional airline, WestJet Encore, which launched in June 2013....

WESTJET AIRLINES $22.46 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 121.9 million; Market cap: $3.0 billion; Dividend yield: 1.8%) reports that its load factor fell slightly in May 2013, to 78.5% from 79.2% a year earlier....

DOREL INDUSTRIES, $35.10, symbol DII.B on Toronto, fell over 10% this week after it announced that its earnings will fall below expectations in the current quarter. Dorel makes a wide range of products, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational products, mainly bicycles. Continued poor weather across the U.S., Canada and Europe has led to lower-than-expected sales volumes, particularly for bicycles (which account for roughly 34% of Dorel’s sales). The slowdown has also prompted the company’s competitors in the bicycle industry to cut their prices....

FIRSTSERVICE CORP. $31.20 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.9 million; Market cap: $1.0 billion; No dividends paid) is expanding further into Western Europe through its Colliers International commercial real estate sales division. Colliers has just acquired controlling interests in two firms in Germany and one in the Netherlands. All are leaders in their respective markets.

European real estate markets have weakened along with the region’s economies, and now is a good time to make acquisitions.

FirstService is a hold....

TEMPUR-PEDIC INTERNATIONAL INC., $42.28, symbol TPX on New York, is changing its name to Tempur Sealy International. Its stock will continue to trade under the TPX symbol. Tempur-Pedic completed its $1.3-billion purchase of rival Sealy Corp. in March 2013. This was a major acquisition for Tempur-Pedic, but it lets the company diversify into the market for traditional spring-coil beds. That should help it offset rising competition in its current business. The company makes and distributes Swedish mattresses and neck pillows made from its proprietary Tempur material, which conforms to the body to provide support and help alleviate pressure points. Simmons Bedding Co. and Serta Inc. have both successfully launched memory-foam mattresses that directly compete with Tempur-Pedic’s products....