investment

PLEASE NOTE: Due to the Good Friday holiday, our next Hotline will go out on Thursday, April 17, 2014. PROCTER & GAMBLE CO., $80.76, New York symbol PG, is selling most of its pet food business to privately held Mars Inc. Under the deal, Mars will get the right to make Iams, Eukanuba and Natura pet foods in North America and Latin America, which supply 80% of these brands’ sales. Procter aims to sell its remaining pet food operations in Europe and elsewhere, probably in the next few months. That will let it focus on its more-profitable household and personal care products....

PLEASE NOTE: Due to the Good Friday holiday, our next Hotline will go out on Thursday, April 17, 2014. YAMANA GOLD INC., $9.37, symbol YRI on Toronto, teamed up with Osisko Mining (symbol OSK on Toronto) last week to thwart a hostile takeover bid by Goldcorp (symbol G) for Osisko. Yamana bid $1.4 billion in cash and shares for 50% of Osisko, which owns the Canadian Malartic mine in Quebec. Canadian Malartic produced 475,277 ounces of gold in 2013. However, Goldcorp has now raised its bid to $3.6 billion in cash and shares for all of Osisko. The Yamana offer, combined with contributions from two of Canada’s largest pension funds in the form of a loan and the purchase of a 37,500-ounce-per-year gold stream, valued Osisko at $3.4 billion....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice on 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. This week an Inner Circle member asked us about one of the Canadian commodity stocks operating in a risky part of the world (a week ago, Pat reported on a Canadian mining stock whose big property is in Eritrea: see the article here.) Allana Potash is developing a project in neighbouring Ethiopia. While the property holds mineable potash, a mine is still in the planning stages. Pat examines Allana’s progress toward building that mine, including a major strategic alliance it has formed, and assesses the company’s prospects for success. ...

RioCan, along with other real estate investment trusts (REITs), faces several challenges that are beyond its control. For example, interest rates will likely rise in the next few years, making bonds more appealing to income-seekers and hurting REITs. Meanwhile, rising online competition has forced retailers that sell books, music and electronics to close stores.

However, RioCan is taking steps to continue prospering....

We feel that the current global stock market rally could continue for some time, particularly as the U.S. economy picks up steam.

That’s good news for insurance companies like Great-West, which must hold a broad portfolio of securities to cover potential claims....

DUNDEE CORP. $17 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 54.1 million; Market cap: $919.7 million; Price-to-sales ratio: 2.4; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) owns businesses in the wealth management, real estate, natural resource and agriculture industries.

The company lost $92.6 million, or $1.88 a share, in 2013....

BIRCHCLIFF ENERGY (Toronto symbol BIR; www.birchcliffenergy.com) develops, produces and explores for oil and natural gas, mainly in the Peace River Arch area near the Alberta/B.C. border. About 81% of its output is gas. The remaining 19% is oil....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you advice on picking stocks and other investment topics that will help you develop a successful approach to investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “What makes investing in real estate different from your other investments is not just the nature of the risks you run, but the extra work you will have to do.”...

From time to time, companies set up one or more of their divisions or subsidiaries as an independent firm, then hand out shares in that company to their own investors as a special dividend, or “spinoff.” You can contrast a spinoff with a new stock issue. That’s when a company (often a newly created or junior company) issues new stock to sell to the public. The two situations are like two sides of a coin—one favourable to investors, the other unfavourable. The motivations of the companies are nearly opposite. Companies sell new issues to the public when they feel it’s a good time to sell. That may be, and often isn’t, a good time for you to buy. In addition, the underwriting brokerage firms try to spark publicity about the new issue, and they pay extra commission (as much as double the regular rates) to spur their salespeople to sell the new issue to their clients. This tends to create a high-water mark in the price of the new issue. Unless the new company can follow up with business success, the price of the new issue may languish for months or years....

Allana Potash, $0.42, symbol AAA on Toronto (Shares outstanding: 294.0 million; Market cap: $123.5 million; www.allanapotash.com), is focused on developing its Danakhil potash project in Ethiopia. The deposit, which is located in the Danakhil Depression area, holds over 24 million tonnes of mineable potash. Allana’s property has a history of potash exploration and mining. There was small-scale production there in the 1920s, and the property was extensively explored in the 1960s, when nearly 300 holes were drilled. Operating in Ethiopia entails considerable political risk. As well, the region’s roads are poor, and power and water infrastructure is underdeveloped....