investment

BAXTER INTERNATIONAL INC. (New York symbol BAX; www.baxter.com) makes medical products, such as intravenous pumps and kidney dialysis equipment. It also makes vaccines and drugs. Half of its sales come from single-use products that need to be continually reordered. Demand for the company’s products continues to improve, particularly as an aging population needs more medical devices and drugs. Baxter’s sales rose 23.4%, from $11.3 billion in 2007 to $13.9 billion in 2011....

The Merriam-Webster dictionary defines jargon as the “technical terminology” of a special activity or group. But it also defines it as “confused unintelligible language.” Every industry and group has its own special jargon. This specialized language always has the same purpose. It simplifies communications within the industry, and helps make insiders feel they are part of a tightly knit community. It also helps the group pursue its goals. It shapes concepts that will establish lines of thought and discussions that match the industry’s view of the world. But it can be confusing for those who are not insiders in the group....

p>RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 298.6 million; Market cap: $8.1 billion; Price-to-sales ratio: 5.0; Dividend yield: 5.1%; TSINetwork Rating: Average; www.riocan.com) has completed its deal to buy full control of 21 shopping malls in the U.S. from Cedar Shopping Centers, Inc. (New York symbol CDR).Previously, RioCan had an 80% stake in these malls through a joint venture with Cedar. It now owns 49 malls in the U.S., and 289 in Canada. RioCan paid $39.0 million U.S. for these properties. To put that price in context, it earned $125 million (Canadian) in the three months ended September 30, 2012. That’s down 25.6% from $168 million a year earlier. Earnings per unit fell 33.3%, to $0.42 from $0.63, on more units outstanding.

However, the best way to assess a real estate investment trust’s operating performance is to look at its cash flow. That’s because it excludes nonrecurring items, like gains on the sale of real estate. RioCan’s cash flow rose 18.6% in the quarter, to a record $115 million from $97 million. Cash flow per unit rose 8.1%, to $0.40 from $0.37.

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BCE INC., $42.15, Toronto symbol BCE, recently failed to win regulatory approval for its $3.4-billion deal to buy Astral Media (Toronto symbols ACM.A and ACM.B). Montreal-based Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels, such as the Movie Network, Family Channel and Teletoon. It also owns billboards and sells other outdoor advertising in Quebec, Ontario and B.C. Regulators felt the purchase would give BCE an overwhelming share of Canada’s English-language TV broadcast market, which would hurt competition....

Pat McKeough responds to many personal questions about specific stocks and other investment topics 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 the Inner Circle. This week, we received a question from an Inner Circle member on an Italian eyewear company whose products range from popular brands like LensCrafters to luxury names like Prada. The company, which trades as an ADR, makes the majority of its sales in North America, and Pat looks at its prospects for growth in an uncertain global economy....

SONY CORP. ADRs $10 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $10.0 billion; Price-to-sales ratio: 0.1; Dividend yield: 3.1%; TSINetwork Rating: Average; www.sony.com) has agreed to buy 11% of distressed Japanese camera maker Olympus for $640 million. In addition, the companies will work together on new medical-imaging equipment that includes Sony’s TV technologies. They will also share digital camera technology. Sony feels this investment will help cut its reliance on its struggling TV set business. To pay for this purchase, Sony is selling $1.9 billion of convertible bonds due in 2017. That will increase its long-term debt to $13.1 billion, or a high 1.3 times its market cap. As well, if all bondholders convert, the number of shares outstanding would rise by 15.6%. That would dilute the holdings of current shareholders. Sony is still a hold.

CHEMTRADE LOGISTICS INCOME FUND (Toronto symbol CHE.UN; www.chemtradelogistics.com) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base-metal processors. These companies create sulphur, acid and other by-products as part of their activities. Chemtrade converts these substances into useful chemicals, like sulphuric acid....

Pat McKeough responds to many personal questions about specific stocks and other investment topics 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 the Inner Circle. This week, an Inner Circle member asked about the world’s biggest generic drug maker. This Israeli-based firm, which trades as an ADR, has grown steadily by acquisition. Pat examines the prospects for growth as an aging population demands more drugs, but he also looks at the challenges of increased competition and government regulation....

SONY CORP. ADRs $10 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $10.0 billion; Price-to-sales ratio: 0.1; Dividend yield: 3.1%; TSINetwork Rating: Average; www.sony.com) has agreed to buy 11% of distressed Japanese camera maker Olympus for $640 million. In addition, the companies will work together on new medical-imaging equipment that includes Sony’s TV technologies. They will also share digital camera technology. Sony feels this investment will help cut its reliance on its struggling TV set business.

To pay for this purchase, Sony is selling $1.9 billion of convertible bonds due in 2017. That will increase its long-term debt to $13.1 billion, or a high 1.3 times its market cap. As well, if all bondholders convert, the number of shares outstanding would rise by 15.6%. That would dilute the holdings of current shareholders.

Sony is still a hold.

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LOBLAW COMPANIES LTD., $33.10, Toronto symbol L, has signed a new long-term deal with Towers Watson, a private firm that helps Canadian companies manage their employees’ health benefits. Under the agreement, Loblaw’s in-store pharmacies will offer special discounts to Towers Watson’s clients, which together employ over 30,000 people. These discounts should draw more shoppers to Loblaw’s stores and more than offset the lost revenue. Roughly half of Loblaw’s 1,000 supermarkets now have in-store pharmacies. Meanwhile, the company earned $222 million, or $0.79 a share, in the three months ended October 6, 2012. That’s down 5.9% from $236 million, or $0.84 a share, a year earlier. Even with the decline, the latest earnings beat the consensus estimate of $0.78 a share....