investment

BELL ALIANT INC. $27 (Toronto symbol BA, Conservative Growth Portfolio, Utilities sector; Shares outstanding: 229.0 million; Market cap: $6.2 billion; Price-to-sales ratio: 2.3; Dividend yield: 7.0%; TSINetwork Rating: Average; www.bellaliant.ca) sells telephone and Internet services to 2.6 million customers in Atlantic Canada and rural parts of Ontario and Quebec. It also sells wireless services through an alliance with BCE, which owns 44% of Bell Aliant.

The company continues to replace its copper-wire cables with fibre optic lines. That’s letting it sell more high-speed Internet and digital TV services, which are offsetting falling demand for land lines. (Traditional phones still supply 55% of Bell Aliant’s overall revenue.)

The company’s fibre optic systems now reach 574,000 homes. It aims to increase that to 650,000 by the end of 2012.

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INTERNATIONAL BUSINESS MACHINES CORP., $207.45, New York symbol IBM, continues to expand its software business. In the three months ended June 30, 2012, software accounted for 24% of its total revenue and 43% of its pre-tax earnings. This week, the company paid an undisclosed sum for U.K.-based Butterfly Software Ltd. Businesses use this private firm’s software to collect data from older computers and securely transfer it to remote servers. Butterfly’s products nicely complement IBM’s growing analytics software operations, which help companies quickly gather and analyze a wide range of information....

Pat McKeough responds to many personal questions on investing in 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, a question from an Inner Circle member asked about one of the technology stocks that has been on an upward trend. Pat looks at whether this wireless company can keep growing in a competitive market with new smartphone initiatives....

ADOBE SYSTEMS INC. $33 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 491.8 million; Market cap: $16.2 billion; Price-to-sales ratio: 3.7; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) reported that its revenue rose 6.6% in the three months ended August 31, 2012, to $1.08 billion from $1.01 billion a year earlier. The company is doing a good job of selling its Creative Cloud package of photo-editing and desktop-publishing programs as a subscription service instead of a one-time purchase. Subscription revenue jumped 50.9% in the quarter, and now accounts for 16% of its overall revenue, up from 11% a year earlier. Adobe still gets 75% of its revenue from direct software sales. The remaining 9% comes from services and support. Earnings rose 6.7%, to $291.2 million from $272.8 million. Earnings per share rose 5.5%, to $0.58 from $0.55, on more shares outstanding. These figures exclude several unusual items, such as restructuring charges and gains on investment sales....

Investment research has changed a great deal since I first got involved in it in 1964, at age 16, when I got a part-time job as an assistant to an investment writer. Back then, and for many years after, you had to call or write companies to get them to mail annual and quarterly reports. You had to dig through stacks of dusty newspapers to get stock prices and market index history. To compare statistics on companies, you used a clunky adding machine and went through lots of pencils and paper....

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 specific investing advice 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: “Investors who are guided by a fixed idea about the future often make the wrong decisions in the present.”...

Most successful investors know better than to invest any money in the stereotypical “hot stock tip” —the gotta-act-quick buy recommendation that comes from a friend (or a friend of a friend). Stocks like these are supposedly sure to make you a lot of money, but they virtually never succeed. Some of these recommendations start out as honest opinions of investors who know just enough to jump to conclusions about a stock’s outlook. However, some of these naïve investors may have come under the influence of dishonest stock promoters and professional swindlers. Of course, you may feel your work gives you special expertise for investing in your own industry. Lots of tech company workers, for instance, feel that way. They have strong feelings about which tech firms are most likely to thrive and which are apt to fail. But the strength of that feeling can mislead you, for a couple of reasons....

This summer, natural gas prices dropped below $2 U.S.per thousand cubic feet, a 10-year low. That’s mainly because of new shale gas discoveries. Prices are now around $2.84, still well below last year’s high of almost $5. Oil prices have weakened, as well. They are now down 16%, from $109 a barrel in February to $92 today. Oil prices will continue to vary, while gas prices will likely recover. The key for this tech stock that serves the energy industry is that prices remain high enough to generate increased drilling for both oil and gas....

Pat McKeough responds to many personal questions on investing in 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. Recently, an Inner Circle member asked about a company that has created a strong niche for itself in dental products. The company is growing internationally, and Pat assesses whether increased strength in Asia can offset slower growth in Europe. ...

CANADIAN PACIFIC RAILWAY LTD., $80.03, Toronto symbol CP, continues to make progress with its plan to improve its efficiency with new trains and streamlined schedules. This week, the company launched its new transcontinental service for intermodal containers (which can be shipped by rail, ship or truck). This new service uses a more direct route with fewer stops. As a result, CP can now ship containers from Vancouver to Toronto in four days instead of five. Shipping to Chicago also takes four days, down from six. CP is our #1 buy for 2012....