FirstService Corp.
Toronto symbol FSV, operates in the real estate services market, providing services in the following areas: commercial real estate; residential property management; and property improvement.
FIRSTSERVICE CORP. $30.20 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.9 million; Market cap: $873.6 million; No dividends paid) has bought a majority interest in Crosby Property Management, a leading residential property management company in B.C. Crosby manages more than 250 low-, mid and high-rise residential and commercial properties. With $15 million in annual revenue, Crosby is small compared to FirstService, which has $2 billion of annual revenue. However, the purchase gives FirstService a market-leading presence in B.C. FirstService is still a buy.
PLEASE NOTE: Next week, The Successful Investor, our newsletter that focuses on high-quality Canadian stocks, will reveal its #1 pick for 2011. If you’re not already a Successful Investor subscriber, click here to learn how you can get one month—including our 2011 stock of the year—FREE. RUBY TUESDAY INC., $14.84, symbol RT on New York, reported earnings that beat the consensus estimate this week. As a result, the stock jumped over 13%. Ruby Tuesday owns 676 of its U.S. restaurants; franchisees operate 140 outlets in the U.S. and 58 overseas....
MAJOR DRILLING, $41.95, symbol MDI on Toronto, jumped 18% this week after the company reported sharply higher results in the latest quarter. In the three months ended October 31, 2010, Major’s revenue jumped 69.2%, to $127.8 million from $75.5 million a year earlier. The company earned $11.4 million, or $0.48 a share, up from $4.1 million, or $0.17 a share. Cash flow was $18.6 million, or $0.78 a share, in the latest quarter. That’s up 51.2%, from $12.3 million, or $0.51 a share. Major expects to see a continued rebound during 2011. Gold prices are at all-time highs, base-metal prices are strong, and many mining companies have raised new funds for exploration....
TOROMONT INDUSTRIES LTD. $29.84 (Toronto symbol TIH; SI Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 76.9 million; Market cap: $2.3 billion; Dividend yield: 2.1%) plans to break itself up into two publicly traded companies: Toromont, a distributor of Caterpillar and industrial equipment; and Enerflex, a supplier of natural-gas production and processing equipment. Under the proposed breakup, Enerflex will apply for its own listing on the Toronto exchange. Existing Toromont shareholders will then exchange each of their current Toromont shares for shares in both the new Toromont and Enerflex. As well, investors will not have to pay capital-gains taxes until they sell their new shares. After the breakup, the two companies will pay dividends that combined will equal the current annual rate of $0.64 per share paid by Toromont. That gives the shares a 2.1% yield. Toromont intends to seek shareholder approval for the transaction in the spring or early summer of 2011....
FIRSTSERVICE CORP. $26, symbol FSV on Toronto, serves the following areas of the real-estate market: commercial real estate; residential property management; and property improvement. The company’s revenue rose 17.6% in the three months ended September 30, 2010, to $530.4 million from $451.1 million a year earlier. (All figures except share price in U.S. dollars.) FirstService’s property-services revenue rose 5% in the latest quarter, to $126.1 million. Residential property-management revenue rose 4%, to $181.6 million. The commercial real-estate division’s revenue showed the biggest gain, rising 43%, to $222.7 million....
FIRSTSERVICE CORP. $21.69 (Toronto symbol FSV; SI Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.9 million; Market cap: $627.0 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. FirstService’s revenue rose 11.6% in the three months ended March 31, 2010 (all figures except share price in U.S. dollars), to $402.4 million from $361 million a year earlier. Excluding one-time items, earnings per share jumped 87.5%, to $0.15 from $0.08. Cash flow jumped to $0.35 a share from $0.02 a share. The big gains in earnings and cash flow came from a turnaround in results in Firstservice’s commercial real estate division. The improving economy pushed up revenue at that division by 30% in the latest quarter, to $154.1 million....
FIRSTSERVICE CORP. $23.95 (Toronto symbol FSV; SI Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.5 million; Market cap: $683.2 million; No dividends paid) is making a major investment in Colliers Bennett & Kahnweiler (Colliers B&K), which is Chicago’s leading commercial real-estate services firm. Terms were not disclosed. Colliers B&K manages 50 million square feet of property and employs more than 200 real-estate agents and property managers. Adding Colliers B&K will help FirstService expand its commercial real-estate brokerage operations in the key Chicago market....
WYNDHAM WORLDWIDE, $26.81, symbol WYN on New York, reported higher-than-expected first-quarter profits this week. In the three months ended March 31, 2010, Wyndham’s earnings per share, excluding one-time items, fell 17.1%, to $0.34 from $0.41. Despite the drop, the latest earnings beat the consensus estimate of $0.30 a share. Revenue fell 1.7%, to $886 million from $901 million. Here too, revenue was higher than forecast, even though it declined: the consensus revenue estimate was $848 million. The lower revenue and earnings were mostly the result of an accounting change. The economic recovery is pushing up travel demand and increasing the number of guests at Wyndham’s hotels....
CHIPOTLE MEXICAN GRILL, $142.98, symbol CMG on New York, jumped over 13% this week. That’s mainly because the company reported that its earnings per share climbed 51.9%, to $1.20 from $0.79, in the three months ended March 31, 2010. That was far ahead of the consensus earnings-per-share estimate of $0.95. Sales rose 15.6%, to $409.7 million from $354.5 million. Chipotle is a Denver-based Mexican-restaurant chain that uses premium ingredients, such as naturally raised meat, in the meals it sells. The company has 976 restaurants, including its first outside of the U.S., in Toronto. In May, Chipotle plans to open a restaurant in London, England....
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.