investment

THE BOEING CO. (New York symbol BA; www.boeing.com grounded all of its new 787 Dreamliner passenger planes in January 2013 after a battery problem forced one to make an emergency landing in Japan....

When I step back from looking at the market’s day-to-day fluctuations, and instead try to figure out where stock prices might go in the next five or 10 years and beyond, I feel increasingly optimistic. For one thing, the stock market has generally been going sideways or making little progress for much of the past 10 or 15 years. You might say the market mainly stayed within a wide trading range in that time—up in some years, down in others. But starting from the low point of spring 2009, stock prices have generally gone up. They’ve risen in a jagged pattern, and the start of every downturn sparked a burst of pessimism. But after each downturn, the market eventually regained its footing. It then went on to a new, higher peak, above the level where the previous downturn began. These lengthy sideways phases have happened in the past. In the end, they always gave way to a new rise that carried prices far above the previous sideways movement. In my view, this latest sideways movement is likely to end the same way....

American Tower, $76.46, symbol AMT on New York (Shares outstanding: 395.1 million; Market cap: $30.1 billion; www.americantower.com), is the world’s largest independent operator of wireless-communications and broadcast towers. The company has a total of 54,323 towers. That includes 22,534 in the U.S, followed by India (10,378), Mexico (5,777), Brazil (4,345), Colombia (3,004), Germany (2,031), Ghana (1,926), South Africa (1,604), Chile (1,181), Uganda (1,043) and Peru (500). American Tower leases its sites to wireless companies. AT&T, Sprint Nextel, Verizon Wireless and T-Mobile supply 74% of the company’s revenue. During the fourth quarter of 2012, American Tower spent $1.2 billion to purchase 627 towers in the U.S. and 2,263 in other countries. The international towers included 2,031 in Germany, 190 in Mexico and 42 in Colombia. So far this year, it has acquired an additional 883 towers in Mexico for $248.5 million....

POTASH CORP. OF SASKATCHEWAN $41 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 864.9 million; Market cap: $35.5 billion; Price-to-sales ratio: 4.3; Dividend yield: 2.8%; TSINetwork Rating: Average; www.potashcorp.com) aims to raise its stake in Israel Chemicals Inc. from 13.9% to at least 51%.

Israel Chemicals produces potash from minerals it extracts from the Dead Sea. Based on Israel Chemicals’ current stock price, this purchase would cost Potash Corp. around $6 billion U.S.

The Israeli government considers this a strategic resource, so Potash Corp. needs permission to buy more shares. Still, this investment would give it a greater stake in a high-quality potash deposit.
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RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 300.1 million; Market cap: $8.1 billion; Price-to-sales ratio: 4.8; Dividend yield: 5.2%; TSINetwork Rating: Average; www.riocan.com) is Canada largest real estate investment trust (REIT), with 294 retail properties, including 11 under development. It also owns 52 malls in the U.S.

RioCan continues to expand beyond suburban big-box-style malls. It recently formed a joint venture with Allied Properties Real Estate Investment Trust (Toronto symbol AP.UN) to redevelop certain properties in Toronto as mixed-use office, retail and residential complexes.

The REIT has also agreed to pay $362 million for an enclosed shopping centre and 50% of another mall, both in southern Ontario. Enclosed malls now supply 16.1% of its Canadian rental revenue.
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CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $79 and CU.X [class B voting] $79; Income Portfolio, Utilities sector; Shares outstanding: 128.6 million; Market cap: $10.1 billion; Price-to-sales ratio: 3.2; Dividend yield: 2.5%; TSINetwork Rating: Above A v e r a g e ; www.canadianutilities.com) distributes electricity and natural gas in Alberta. It also operates 18 power plants in Canada, Australia and the U.K. ATCO Ltd. (see right) owns 52.9% of the company.

In July 2011, Canadian Utilities bought an Australian natural gas distributor for $1.1 billion. This move, along with an expansion of its power transmission grid in Alberta, continues to benefit the company. These new assets have also helped offset lower revenue from its Alberta power plants due to planned maintenance shutdowns.

As a result, the company’s earnings rose 13.1% in 2012, to a record $561 million, or $4.11 a share. The new Australian business contributed $26 million to that total. In 2011, Canadian Utilities earned $496 million, or $3.65 a share. Revenue rose 4.7%, to $3.1 billion from $3.0 billion.
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GREAT-WEST LIFECO (Toronto symbol GWO; www.greatwestlifeco.com) is Canada’s largest insurance company, with $545.8 billion in assets under administration. It recently agreed to buy Irish Life Group Ltd., Ireland’s largest pension manager and life insurance provider....

FEDEX CORP., $98.48, New York symbol FDX, reported lower-than-expected earnings this week. That’s because many of its customers are shipping their goods using slower but cheaper forms of transportation, such as trucks and ships, instead of FedEx’s more expensive overnight international air service. In its 2013 third quarter, which ended February 28, 2013, FedEx’s earnings per share fell 20.6%, to $1.23 from $1.55 a year earlier. These figures exclude several unusual items, such as the cost of replacing older planes with more efficient models and job cuts through voluntary buyouts. On that basis, the latest earnings missed the consensus estimate of $1.38 a share. However, revenue rose 3.7%, to $11.0 billion from $10.6 billion. The company now expects to earn $6.00 to $6.20 a share for all of fiscal 2013, down from its earlier prediction of $6.20 to $6.60. The stock trades at 16.1 times the midpoint of the lower range. That’s a reasonable p/e ratio, particularly because FedEx’s cost-cutting plan will put it in a strong position to increase its profits as the global economy recovers....

ALIMENTATION COUCHE-TARD, $53.63, symbol ATD.B on Toronto, reported sharply higher sales and earnings in its latest quarter. The company is the largest convenience store operator in Canada, with over 2,000 outlets. It also has nearly 3,700 U.S. stores. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. In the three months ended February 3, 2013, Couche-Tard’s sales jumped 75.2%, to $11.6 billion from $6.6 billion a year earlier. The gain mostly came from Norway’s Statoil Fuel & Retail ASA, which Couche-Tard bought for $2.7 billion in June 2012 (all figures except share price in U.S. dollars). The company also benefited from higher fuel prices and merchandise sales. Couche-Tard gets about 30% of its revenue by selling merchandise....

TECK RESOURCES LTD., $28.73, Toronto symbol TCK.B, fell 6% this week, along with other mining stocks, partly due to concerns about the outlook for prices of coal, copper and other commodities. China is a major resource consumer, and growth in the country has slowed along with its exports to Europe and the U.S. China’s inflation rate is also rising, which could make it more difficult to spur growth through stimulus spending or lower interest rates. As well, investors are concerned that Teck may buy control of privately held Iron Ore Company of Canada (IOC); Rio Tinto (New York symbol RIO) is IOC’s largest shareholder, with a 58.7% stake. This company mines and processes iron ore in Labrador City, Newfoundland. Trains then take the iron ore pellets to the port of Sept-Îles, Quebec, for shipment to steel mills around the world....