investment

BANK OF NOVA SCOTIA $57.83 (Toronto symbol BNS: Shares outstanding: 1.2 billion; Market cap: $69.2 billion; TSINetwork Rating: Above Average; Dividend yield: 4.2%, www.scotiabank.com) has acquired 50% of AFP Horizonte, which manages pension funds in Peru, for $260 million. This business has 1.4 million clients and $9 billion U.S. of assets under management. SURA Asset Management owns the other 50%.

Demand for pension fund services is growing quickly in Latin America. As well, Bank of Nova Scotia has a long history in this region, which cuts the risk of this investment.

The bank and SURA plan to divide AFP Horizonte in the next few weeks. Following the split, Bank of Nova Scotia will merge this business with its existing pension plan operations in Peru. The combined business will have 1.9 million clients and $10.3 billion U.S. in assets under management.
...

CALIAN TECHNOLOGIES $20.35 (Toronto symbol CTY; www.calian.com) operates in two areas: the business and technology services division (which supplies 70% of Calian’s revenue) provides engineers, health care workers and other skilled professionals to clients on a contract basis. The systems engineering division (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems....

IGM FINANCIAL INC. (Toronto symbol IGM; www.igmfinancial.com) is Canada’s largest independent mutual fund company, with $125.8 billion of assets under management. Power Financial owns 58.4% of IGM....

TRANSCANADA CORP. $49 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 707.0 million; Market cap: $34.6 billion; Price-to-sales ratio: 4.2; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.transcanada.com) plans to build a new 200- kilometre crude oil pipeline that will connect Edmonton to the storage hub at Hardisty, Alberta. From there, TransCanada will pump the oil to refineries in the U.S. Midwest through its Keystone pipeline.

The project, which will cost $900 million, also includes a new oil-storage facility. The company already has long-term contracts from producers, which cuts the risk of this investment. The project should begin operating in the second half of 2015.

These investments will help TransCanada handle rising production from Alberta’s oil sands. The new system will also help support its proposed Keystone XL pipeline extension. This project, which requires U.S. government approval, would pump oil to refineries on the U.S. Gulf Coast.
...

POTASH CORP. OF SASKATCHEWAN $44 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 865.1 million; Market cap: $38.1 billion; Price-to-sales ratio: 4.7; Dividend yield: 2.6%; TSINetwork Rating: Average; www.potashcorp.com) no longer aims to buy control of Israel Chemicals, which produces potash from minerals it extracts from the Dead Sea. Potash Corp. wanted to increase its stake from 13.9% to at least 51%, but the plan faced intense political opposition. The company plans to hang on to this investment and may try to buy more of Israel Chemicals in the future.

Meanwhile, the company’s sales rose 20.3% in the three months ended March 31, 2013, to $2.1 billion from $1.7 billion a year earlier (all amounts except share price and market cap in U.S. dollars). Earnings rose 13.2%, to $556 million from $491 million. Due to more shares outstanding, per-share earnings rose 12.5%, to $0.63 from $0.56. New contracts with potash buyers in China and India, plus higher shipments to Brazil, helped offset a 16.6% drop in the company’s average realized selling price.

Potash Corp. is a buy....

Pat McKeough responds to many requests for advice on specific stocks and other questions on investment and the economy from the members of his Inner Circle. 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 about the largest wireless provider in the world. China Mobile competes with two other Chinese wireless providers, each of which has the advantage of being compatible with Apple iPhones, while China Mobile is not. Pat looks at whether an upgrade of China Mobile’s network and new chip technology will let it hook up with Apple and other popular smartphones and keep its lead in the Chinese market. ...

TIM HORTONS $57.34 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 153.4 million; Market cap: $8.9 billion; Dividend yield: 1.8%) has renovated and redesigned its stores over the last couple of years to make them more appealing to customers and boost traffic.

However, the company is now under pressure to do more from Highfields Capital, a U.S.-based activist investment firm that owns 1.5% of Tim Hortons’ shares.

Highfields has proposed several ways to unlock shareholder value, including slowing Tim Hortons’ expansion in the intensely competitive U.S....

BROADRIDGE FINANCIAL SOLUTIONS $26.81 (New York symbol BR; TSINetwork Rating: Extra Risk) (201-714-3000; www.broadridge.com; Shares outstanding: 121.9 million; Market cap: $3.3 billion; Dividend yield: 2.7%) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing....

In October 2012 Kraft Foods Inc. broke up into two separate companies, Kraft Foods Group (Nasdaq symbol KRFT) and Mondelez. Recently, we looked at Kraft (view the daily post here), whose operations are now focused on North America. Today we look at its spinoff, Mondelez, which gets most of its sales from overseas markets. MONDELEZ INTERNATIONAL INC. (Nasdaq symbol MDLZ; www.mondelezinternational.com) makes cookies and biscuits (Oreo, Chips Ahoy, Ritz), chocolate bars (Cadbury, Toblerone) and gum and candy (Trident, Chiclets, Halls cough drops). It also makes beverages, including coffee (Tassimo) and powdered fruit drinks (Tang), as well as grocery and cheese products for overseas markets. Mondelez gets 46% of its sales from developing countries, 35% from Europe and 19% from North America....

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 specific investment advice. 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: “You take a double loss if you lose money in your RRSP, which means that it is an expensive place to find out if you have a talent for stock trading.”...