investment

Dear Inner Circle member, A friend, Mr. S., has a large profit on his home, and he wonders if he should sell. A lot of Toronto homeowners are asking themselves that question, but my friend’s case is different. He bought his house 15 years ago for $325,000. Similar houses six blocks away are now worth perhaps $750,000, but his is worth nearly twice as much. The value of his home went up faster than average because his area has been re-zoned for high-rise condo construction. Re-zoning can have a huge impact on real estate prices. The land under the house now provides a site for one house. But if a developer assembles a parcel of 10 adjacent houses, he might be able to win approval to build 50 or 100 or more condo apartments on the site, depending on the condo plan and the number of stories the authorities allow....

PEYTO EXPLORATION & DEVELOPMENT CORP. (Toronto symbol PEY; www.peyto.com) produces and explores for oil and natural gas in Alberta. Its average daily production of 72,209 barrels of oil equivalent is 90% gas and 10% oil. In the quarter ended March 31, 2014, Peyto’s cash flow rose 53.6%, to $1.06 a share from $0.69 a year earlier. That’s because the company raised its production by 30.4%. Gas prices also gained 27.5%, to an average of $4.45 per thousand cubic feet from $3.49, while oil prices rose 6.1%, to $80.49 a barrel from $75.88. Peyto plans to spend $625 million on exploration and development in 2014, which will let it drill 110 to 125 wells. To put that in context, the company spent $578 million to drill 99 wells in 2013....

Businesses will likely spend more on software this year, as the global economy continues to recover. That’s good news for two market leaders we cover regularly in our advisory on U.S. stocks, Wall Street Stock Forecaster. We analyze which is in a better position to benefit as more companies adopt cloud computing. Note: This article updates our recent report on Symantec, issued just after the company had fired its CEO (see the article here). ADOBE SYSTEMS INC. (Nasdaq symbol ADBE; www.adobe.com) earned $151.3 million, or $0.30 a share, in its fiscal 2014 first quarter, which ended February 28, 2014. That’s down 14.9% from $177.9 million, or $0.35, a year ago. Revenue fell 0.8%, to $1.00 billion from $1.01 billion. The declines are mainly because Adobe is now selling its Creative Cloud package of photo-editing and desktop-publishing programs as a subscription instead of a one-time purchase. That hurts the company’s short-term growth, but it should provide stable revenue streams as more users switch over. Subscriptions now supply over half of Adobe’s revenue....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice on buying stocks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle. Recently an Inner Circle member asked us about a Canadian stock that is tapping into the economic growth of Western Canada. WesternOne operates through a series of smaller acquisitions that build up its business in construction heating, aerial equipment and modular buildings. Pat looks at the company’s expanding business and the potential risks and rewards of its growth-by-acquisition strategy in a very competitive market. Q: Pat, could you give me your opinion on WesternOne, please?...

RIOCAN REAL ESTATE INVESTMENT TRUST $27.64 (Toronto symbol REI.UN; Units outstanding: 304.4 million; Market cap: $8.4 billion; TSINetwork Rating: Average; Dividend yield: 5.1%; www.riocan.com) is Canada’s largest real estate
investment trust (REIT), with interests in 340 shopping malls containing over 82 million square feet of leasable area....

ISHARES CDN REIT SECTOR INDEX FUND $16.48 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 Canadian real estate investment trusts in the S&P/TSX Capped REIT Index. The weight of each REIT is limited to 25% of the ETF’s value.

iShares CDN REIT’s expenses are 0.60% of its assets....

Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. The group administers over $2 trillion U.S. in 170 mutual funds.

Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions....

The outlook for automakers was grim following the financial crisis of 2008. Once-dominant firms like General Motors and Chrysler were forced to turn to the government for bailouts. But few industries have rebounded stronger than the automobile industry....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you advice on specific investment topics such as technical analysis. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Technical analysis can be a useful investment tool, but if you rely too heavily on it—or any other single facet of investing—you have little chance of profiting consistently.” Learning what not to do can be the hardest and costliest part of an investor’s education....

This week, we have a special report for you—see below—about a number of stocks that offer a particularly attractive combination of three investment positives: low per-share price-to-earnings ratios, steady or rising dividends, and promising growth prospects. Pat